Variance Analysis Project Use the following data to calculate the variances in p
ID: 2790941 • Letter: V
Question
Variance Analysis Project Use the following data to calculate the variances in problems 1-5. Standard Cost Profile Lab Treatment SU #12 Expected Treatments 1,000 Quantity Quantity Unit Variable Average Average Resource Variable Fixed Cost Cost Fixed CostTotal Cost Labor 0.80 7.00 0.80 16.00 S 12.80 $12.80 0 $ 25.60 70 Supplies 1.10 S20.50 S 12.8033.30 Actual Month Cost Lab Treatment SU #12 Actual Treatments-1,100 Quantity Unit Total Resource Used Cost Cost Labor Supplies 1,600 S 17.00 $ 27,200 7,500 1.00 7500 $34,700 Calculate the following variances: 1. Efficiency Variance - Labor 2. Efficiency Variance- Supplies 3. Price Variance-Labor 4. Price Variance -Supplies 5. Volume VarianceExplanation / Answer
Question 1). Solution :-
Labor efficiency variance = Standard unit cost of labor * (Standard labor quantity for actual treatments - Actual labor quantity)
= 16 * (0.80 * 1100 - 1600)
= 16 * (880 - 1600)
= $ 11520 (Unfavourable).
Question 2). Solution :-
Supplies efficiency variance = Standard price of supplies per unit * (Standard quantity of supplies for actual treatments - Actual quantity of supplies used.)
= 1.10 * (7 * 1100 - 7500)
= 1.10 * (7700 - 7500)
= $ 220 (Favourable).
Question 3). Solution :-
Labor price variance = Actual labor quantity * (Standard unit cost of labor - Actual unit cost of labor)
= 1600 * (16 - 17)
= $ 1600 (Unfavourable).
Question 4). Solution :-
Supplies price variance = Actual quantity of supplies used * (Standard price of supplies per unit - Actual price of supplies per unit)
= 7500 * (1.10 - 1.00)
= $ 750 (Favourable)
Conclusion :-
1). Labor efficiency variance $ 11520 (Unfavourable). 2).Supplies efficiency variance $ 220 (Favourable). 3). Labor price variance $ 1600 (Unfavourable). 4). Supplies price variance $ 750 (Favourable).Related Questions
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