Setting Standards, Material and Labor Variances Granite, per square foot $50.00

Question

Setting Standards, Material and Labor Variances

Granite, per square foot

$50.00

Glue (10 oz. @ $0.15)

1.50

Direct labor hours:

Cutting labor (0.10 hr. @ $15)

1.50

Installation labor (0.25 hr. @ $25)

6.25

These standards assumed that one seamless counter requires one sink cut (the space into which the sink will fit) as well as cutting the counter to fit the space available.

Charlene tracked the actual costs incurred by Tom and Tony for granite installation for the next six months. She found that they completed 50 jobs with an average of 32 square feet of granite installed in each one. The following information on actual amounts used and cost was gathered:

Granite purchased and used (1,640 sq. ft.)

$80,248

Glue purchased and used (16,000 oz.)

$2,560

Actual hours cutting labor

180

Actual hours installation labor

430

The actual wage rate for cutting and installation labor remained unchanged from the standard rate.

Required:

If an amount is zero, enter "0" and select neither from the dropdown. If required, enter favorable values as negative numbers.

1. Calculate the materials price variances and materials usage variances for granite and for glue for the past six months.

Granite

Materials price variance ????

$

Favorable

Materials usage variance 2,000

$

Unfavorable

Glue

Materials price variance 160

$

Unfavorable

Materials usage variance 0

$

Neither

Granite, per square foot

$50.00

Glue (10 oz. @ $0.15)

1.50

Direct labor hours:

Cutting labor (0.10 hr. @ $15)

1.50

Installation labor (0.25 hr. @ $25)

6.25

Explanation / Answer

Step 1 - Preparing Flexible budget with actual Data for variance calculation

(A) Granite Material

1600 square feet

(50 jobs * 32 square feet)

Granite Material Variance

Formula = [Standard rate - Actual rate] * Actual quantity

Values : Standard rate = $50

Actual Rate = $48.93

Actual quantity = 1640 square feet

Values : Standard price = $50

Standard quantity = 1600 square feet

Actual quantity = 1640 square feet

(B) Glue material

Glue material variance

[(Standard rate - Actual rate)] * Actual oz

Values : Standard rate = $0.15

Actau rate = $0.16

Actual oz = 16000 oz

[Standard quantity - Actual quantity] * Standard rate

Value

Actual quantity = 16000 oz

Standard quantity = 16000 oz

Standard rate = $0.15

Particulars Flexible Data (revised standard data with respect to actual data) Actual budget Granite purchased and used

1600 square feet

(50 jobs * 32 square feet)

1640 sqaure feet Total cost of granite purchase $80000 $80248 Cost per square feet of granite $50 $48.93

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.