1. The James Company has reported the following information regarding its produc
ID: 2586442 • Letter: 1
Question
1. The James Company has reported the following information regarding its production costs for boots:
Actual Quantity: 600 boots
Actual Price (cost): $5 per boot
Standard Quantity 700 boots
Standard Price (cost) $4 per boot
Given this information,
What is the price variance (in dollars) and is it favorable or unfavorable $________________________.
What is the efficiency variance (in dollars) and is it favorable or unfavorable $_____________________.
2. The Highlander Company reported the following cost volume profit information:
Revenue $8,000
Variable Cost $6,000
Fixed Cost $1,000
Given this information,
What is the contribution margin percentage? ____________________.
What is the breakeven amount in revenues (in dollars)? ___________________.
3. The Cicso company reported the following cost information:
Sales (2,00 units @ $20/unit)
Direct Materials: $4/unit
Direct Labor: $2/unit
Variable Manufacturing Overhead: $1/unit
Fixed Manufacturing Overhead: $1/unit
Variable general and administrative Expenses: $3/unit
Given this information, what is the:
Contribution Margin (in dollars) $ ______________________.
Gross Margin (in dollars) $ _____________________________.
Explanation / Answer
Dear student, only one question is allowed at a time. I am answering the first question
1)
Price variance
= Actual quantity x Actual price – Actual quantity x Standard price
= 600 x $5 – 600 x $4
= $3,000 - $2,400
= $600 Unfavorable
The variance is unfavorable as the actual price is more than the standard price
Efficiency variance
= Actual quantity x Standard price – Standard quantity x Standard price
= 600 x $4 – 700 x $4
= $2,400 - $2,800
= $400 Favorable
The variance is favorable as the actual quantity consumed is less than the standard quantity
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.