Variances Costs Total Standard Cost Price Quantity You have been given the follo
ID: 2554810 • Letter: V
Question
Variances
Costs
Total Standard Cost
Price
Quantity
You have been given the following information about the production of Usher Co., and are asked to provide the plant manager with information for a meeting with the vice president of operations.Standard Cost Card Direct materials (8 pounds at $4 per pound) $32.00 Direct labor (0.70 hours at $9) 6.30 Variable overhead (0.70 hours at $3 per hour) 2.10 Fixed overhead (0.70 hours at $7 per hour) 4.90 $45.30
The following is a variance report for the most recent period of operations.
Variances
Costs
Total Standard Cost
Price
Quantity
Direct materials $410,000 $6,370 F $9,300 U Direct labor 80,722 5,200 U 6,000 UExplanation / Answer
a) Number of units produced total standard cost / number of units 410,000/32 12813 ansnwer b) How many pounds of raw materials purchased (Aq used - standard qty allowed)*standard rate = materials Quantity variance ((4AQ - 410,000)=9,300 4AQ = 9300+410,000 AQ = (9300+410000)/4 AQ = 104825 answer c) Actual cost per pound of raw materials (actual price - standard price)*AQ = materials price variance (AP - 4)*104,825 = 6,370 F 104,825Ap - 419,300 = 6,370 AP = (419300-6370)104,825 3.94 per pound answer d) Actual direct labor hours = (Actual hr - standard hrs)*standard rate = labor qty variance (9AH - 80,722) = 6000 9 AH = (6000+80,722) AH = (6000+80722)/9 AH = (6000+80722)/9 9636 Hrs answer e) (Actual price - standard price)*Actual hours = labor price variance (AP -9)*9636 = 5,200 9636AP - 86,724 =5200 AP = (5200+86724)/9636 AP = 9.54 answer
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