The following data were drawn from the records of Campbell Corporation. Required
ID: 2516027 • Letter: T
Question
The following data were drawn from the records of Campbell Corporation.
Required
Prepare a materials variance information table showing the standard price, the actual price, the standard quantity, and the actual quantity.
Calculate the materials price and usage variances. Indicate whether the variances are favorable (F) or unfavorable (U).
Prepare a labor variance information table showing the standard price, the actual price, the standard hours, and the actual hours.
Calculate the labor price and usage variances. Indicate whether the variances are favorable (F) or unfavorable (U).
Calculate the predetermined overhead rate, assuming that Campbell uses the number of units as the allocation base.
Calculate the fixed cost spending variance. Indicate whether the variance is favorable (F) or unfavorable (U).
Calculate the fixed cost volume variance. Indicate whether the variance is favorable (F) or unfavorable (U).
Planned volume for year (static budget) 4,100 units Standard direct materials cost per unit 3.20 pounds @ $ 1.20 per pound Standard direct labor cost per unit 3.00 hours @ $ 3.90 per hour Total expected fixed overhead costs $ 17,630 Actual volume for the year (flexible budget) 4,300 units Actual direct materials cost per unit 2.60 pounds @ $ 1.60 per pound Actual direct labor cost per unit 3.20 hours @ $ 3.30 per hour Total actual fixed overhead costs $ 13,130Explanation / Answer
Answer
Actual DATA for
4300
units
Quantity (AQ)
Rate (AR)
Actual Cost
Direct Material
11180
$ 1.60
$ 17,888.00
Direct labor
13760
$ 3.30
$ 45,408.00
Standard DATA for
4300
units
Quantity (SQ)
Rate (SR)
Standard Cost
Direct Material
13760
$ 1.20
$ 16,512.00
Direct labor
12900
$ 3.90
$ 50,310.00
Material Price Variance
(
Standard Rate
-
Actual Rate
)
x
Actual Quatity
(
$ 1.20
-
$ 1.60
)
x
11180
-4472
Variance
4472
Unfavourable-U
Material Quantity Variance
(
Standard Quantity
-
Actual Quantity
)
x
Standard Rate
(
13760
-
11180
)
x
$ 1.20
3096
Variance
3096
Favourable-F
Material Spending Variance
(
Standard Cost
-
Actual Cost
)
(
$ 16,512.00
-
$ 17,888.00
)
-1376
Variance
1376
Unfavourable-U
Labor Rate Variance
(
Standard Rate
-
Actual Rate
)
x
Actual Labor Hours
(
$ 3.90
-
$ 3.30
)
x
13760
8256
Variance
8256
Favourable-F
Labour Efficiency Variance
(
Standard Hours
-
Actual Hours
)
x
Standard Rate
(
12900
-
13760
)
x
$ 3.90
-3354
Variance
3354
Unfavourable-U
Labor Spending Variance
(
Standard Cost
-
Actual Cost
)
(
$ 50,310.00
-
$ 45,408.00
)
4902
Variance
4902
Favourable-F
Total expected = $17630
Expected units = 4100
Predetermined rate = 17630 / 4100 = $4.3 per unit
Spending Variance = Expected Fixed overheads – Actual Fixed Overhead = $17630 - $13130 = $4500 Favourable.
Volume variance = 4300 units x $4.3 = $18,490 - $13130 = $5360 Favourable.
Actual DATA for
4300
units
Quantity (AQ)
Rate (AR)
Actual Cost
Direct Material
11180
$ 1.60
$ 17,888.00
Direct labor
13760
$ 3.30
$ 45,408.00
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