I\'m Really Cold Coat Company makes women\'s and men\'s coats. Both products req
ID: 2481832 • Letter: I
Question
I'm Really Cold Coat Company makes women's and men's coats. Both products require filler and lining material. The following planning information has been made available: I'm Really Cold Coat Company does not expect there to be any beginning or ending inventories of filler and lining material. At the end of the budget year, I'm Really Cold Coat Company experienced the following actual results: The expected beginning inventory and desired ending inventory were realized. Direct materials price, quantity, and total variance. Direct labor rate, time, and total variance.Explanation / Answer
1. Direct material variance:
before calculating variances we need to collect the given information form the question, they are,
Direct Material Price Variance:
= Actual Quantity x Actual Price - Actual Quantity x Standard Price
Filler = 48,000 * 1.9 - 48,000 * 2 = 48,000(1.9-2) = 48,000 * 0.1 = 4,800 Favorable.
Liner = 85,100 *8.2 - 85,100 * 8 = 85,100(8.2 - 8) = 85,100 * 0.2 = 17,020 Unfavorable
Total price variance = 4,800F - 17,020 U = 12,220 Unfavorable
Direct Material Usage Variance:
= Actual Quantity x Standard Price - Standard Quantity x Standard Price
Filler = 48,000 * 2 - 52,240 * 2 = 2 (48,000-52,240) = 4,240 * 2 =8,480 Favorable.
Liner = 85,100 * 8 - 93,280*8 = 8(85,100 - 93,280) = 8,180 * 8 = 65,440 Favorable
Total usage variance = 8,480F + 64,440F = 73,920 Favorable.
Total material variance = Actual cost - standard cost
Filler = 48,000 * 1.9 - 52,240 * 2 = 91,200 -104,480 =13,280 Favorable.
Liner = 85,100 * 8.2 - 93,280*8 = 697,820 - 746,240 = 48,420 Favorable
Total material variance =13,280F + 48,420F = 61,700 Favorable.
2. Direct Labour variance:
before calculating variances we need to collect the given information form the question, they are,
Direct Labor Rate Variance:
= Actual hours x Actual Rate - Actual hours x Standard Rate
women = 1,825 * 14.10 - 1,825 * 14 = 1,825(14.1 - 14) = 1,825 *0.1 = 182.5 Unfavorable
men = 2,800 * 13.3 - 2,800 * 13 = 2,800(13.3 - 13) = 2,800 * 0.3 = 840 Unfavorable
Total labour rate variance =182.5 U + 840 U = 1,022.5 Unfavorable
Direct Labor Effciency Variance:
= Actual Hours x Standard Rate - Standard Hours x Standard Rate
women = 1,825 * 14 - 2,000 * 14 = 14 (1,825 - 2,000) = 14*175 = 2,450 Favorable
men = 2,800 * 13 - 3,100 * 13 = 13(2,800 - 3,100) = 13 * 300 = 3,900 Favorable
Total labour rate variance =2,450F + 3,900F = 6,350 Favorable
Total labour variance = Actual cost - standard cost
women = 1,825 * 14.1 - 2,000 * 14 = 25,732.5 - 28,000 = 2,267.5 Favorable
men = 2,800 * 13.3 - 3,100 * 13 = 37,240 - 40,300 = 3,060 Favorable
Total labour rate variance =2,267.5 F + 3,,060 F = 5,327.5 Favorable
Details standard quantity standard price actual quantity Actual price women men Total given directly Filler 5,000*4 = 20,000 6,200 *5.2 = 32,240 52,240 2 48,000 1.9 Liner 5,000 * 7 = 35,000 6,200*9.4 = 58,280 93,280 8 85,100 8.2Related Questions
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