Help Save & Exit Subm Check my work Problem 10-9 Comprehensive Variance Analysis
ID: 2436673 • Letter: H
Question
Help Save & Exit Subm Check my work Problem 10-9 Comprehensive Variance Analysis /L010-1, L010-2, LO10-3) Parts, Inc., manufactures auto accessories. One of the company's products is a set of seat covers that can be adjusted Marvel to fit nearly any small car. The company has a standard cost system in use for all of its products. According to the standards that have been set for the seat covers, the factory should work 1,055 hours each month to produce 2,110 sets of covers. The standard costs associated with this level of production are: Total Covers Direct materials Direct labor Variable manufacturing overhead $51,273 $24.38 $18,55 5.00 (based on direct labor-hours) 4,853 2.3e 31.68 During August, the factory worked only 1,000 direct labor-hours and produced 2,100 sets of covers were recorded during the month Direct materials (6,800 yards) Direct labor Total of $49,980 $23.88 10,92 5.28 PrevofNext 6 WE TY?UExplanation / Answer
1) a. Material Price Variance :-
= Actual Quantity * (Actual Cost Per unit - Standerd Cost per unit)
= 2100 * ($23.80 - $24.30)
= 2100 * $0.5
= $1050 F
b. Material Quantity Variance :-
= Standerd Cost Per Unit * (Actual Quantity - Standerd Quantity)
= $24.30 * (2100-2110)
= $243 U
2) a. Labor Rate Variance :-
= Actual Hours * (Actual Rate - Standerd Rate)
= 1000 * ($5.2 - $5.0)
= $200 U
b. Labor Efficiency Variance :-
= Standerd Rate * (Actual Hours - Standerd Hours)
= $5.00 * (1000 H - 1055 H)
= $275 F
3) a. Variable Overhead Rate Variance :-
= Actual Hours * (Standard Rate - Actual Rate)
= 1000 H * ($4.6 - $5.46)
= 860 U
Standard Rate = $4853 / 1055 H
= $4.6
Actual Rate = $5460 / 1000 H
= $5.46
b. Variable Overhead Efficiency Variance :-
= Standard Rate * (Standard Hours on Actual Quantity - Actual Hours)
= $4.6 * (((1055 H / 2110 set)*2100 set) - 1000 H
= $4.6 * (1050 H - 1000 H)
= 230 F
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