Help Saeve & Exlt Subm 2 Problem 10-15 Comprehensive v 15 shown by Its June form

Question

Help Saeve & Exlt Subm 2 Problem 10-15 Comprehensive v 15 shown by Its June format Income statement below Jalea (15,000 pools) $675,000 $675, 000 435,000 461, 890 20,000 20,000 455, 000 481, 890 rotal variable expenaes720.00 Contribution margi 130,000 130, 000 84,000 84, 000 Selling and adminiatratire Total fixed expenses Net (losa) 6,000 $ (20, 890) overhead Janet Dunn, who has Just been appointed general manager of the Westwood Plant, has been given instructions to "get things under control Upon reviewing the plant's income statement, Ms. Dunn has concluded that the major problem lies in the vaniable cost of

Explanation / Answer

To compute the direct materials price variance, take the difference between the standard price (SP) and the actual price (AP), and then multiply that result by the actual quantity (AQ):

To get the direct materials quantity variance, multiply the standard price by the difference between the standard quantity (SQ) and the actual quantity:

Direct materials quantity variance = -21,000 (Unfavourable)

Direct labor rate variance is the product of actual direct labor hours and the difference between the standard direct labor rate and actual direct labor rate.

DL Rate Variance = -11800 (Unfavourable)

To get the direct labor efficiency variance, multiply the standard rate (SR) by the difference between total standard hours (SH) and the actual hours worked (AH):

Direct labor efficiency variance = 3,200 Favourable

Variable Overhead Rate Variance is the product of actual units of the allocation base of variable overhead and the difference between standard variable overhead rate and actual variable overhead rate.

VOH Rate Variance =-590 Unfavourable

The variable overhead efficiency variance=Standard overhead rate x (Standard hours-Actual)

The variable overhead efficiency variance=300 Favourable

Net Variance=Direct materials price variance+Direct materials quantity variance +Direct labour rate variance+Direct labour efficiency variance+VOH Rate Variance+VOH Efficiency Variance

Direct materials price variance = (SP – AP) x AQ Direct materials price variance = (5-4.95)*49200 Direct materials price variance = 2460 (favourable)

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