Lido Company’s standard and actual costs per unit for the most recent period, du

Question

Lido Company’s standard and actual costs per unit for the most recent period, during which 400 units were actually produced, are given below:

Standard Actual
Materials:
Standard: 2 foot at $1.50 per foot $ 3.00
Actual: 2.1 foot at $1.60 per foot $ 3.36
Direct labor:
Standard: 1.5 hours at $6.00 per hour 9.00
Actual: 1.4 hours at $6.50 per hour 9.10
Variable overhead:
Standard: 1.5 hours at $3.40 per hour 5.10


Actual: 1.4 hours at $3.10 per hour 4.34

Total unit cost $ 17.10 $ 16.80



Required:
a.
Compute the materials price variance. (Input the amount as positive value. Indicate the effect of variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Leave no cell blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.)

Materials price variance $

b.
Compute the materials quantity variance. (Input the amount as positive value. Indicate the effect of variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Leave no cell blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.)

Materials quantity variance $

c.
Compute the direct labor rate variance. (Input the amount as positive value. Indicate the effect of variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Leave no cell blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.)

Direct labor rate variance $

d.
Compute the direct labor efficiency variance. (Input the amount as positive value. Indicate the effect of variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Leave no cell blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.)

Direct labor efficiency variance $

e.
Compute the variable overhead rate variance. (Input the amount as positive value. Indicate the effect of variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Leave no cell blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.)

Variable overhead rate variance $

f.
Compute the variable overhead efficiency variance. (Input the amount as positive value. Indicate the effect of variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Leave no cell blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.)

Variable overhead efficiency variance $
check my workreferences


©2011 The McGraw-Hill Companies. All rights reserved.

Explanation / Answer

a. Material Price Variance= Actual Quantity x Actual Price - Actual Quantity x Standard Price = AQ x AP - AQ x SP = AQ(AP -SP) =400(3.36 -3.00) =400(0.36) =144 (Favourable) b.Material Quantity Variance=Actual Quantity xStandard Price - Standard Quantity xStandard Price =SP(AQ-SQ) =3.00(2.1-2) =3.00(0.1) =0.3(Favourable) c.Direct Labor rate variance= Actual Hours x Actual Rate-Actual HoursxStandard Rate =1.4x6.50 -1.4x6.00 =1.4(6.50 - 6.00) =1.4(0.50) =0.7(F) d.Direct Labor efficiency variance=Actual HoursxStandard Rate -Standard Hours xStandard Rate =1.4x6.00-1.5x6.00 =6.00(1.4-1.5) =6.00(-0.1) =0.6(Unfavourable) e.Variable overhead rate variance= (AHxAR)-(AHxSR) =AH(AR-SR) =1.4(3.10-3.40) =1.4(-0.30) =0.42(U) f.Variable overhead efficiency variance=(AHxSR)-(SHxSR) =SR(AH-SH) =3.40(1.4-1.5) =3.40(-0.1) =0.34(U)

Related Questions

Navigate

• Browse (All)
• Browse L
• Subjects

---

---

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