Last year. Voewall company budgeted for production and sale of 2170 neebles. Act
ID: 2471423 • Letter: L
Question
Last year. Voewall company budgeted for production and sale of 2170 neebles. Actual production and sales was 2500 neebles for $400 each. Each item was budgeted to use 4 direct labor hour(s) and 3 piece(s) of material Voewall expected to pay $4.00 per piece and $17.00 per hour. Actual production required the following: 6750 pieces at $4.80 per piece 9000 hours at $13.60 per hour How much should it cost for materais for one neeble? How much should it cost for labor for one neeble? How many hours should it take to build 2500 neebles? How much should it have cost for materials to build the 2500 neebles? Will the materials price variance be Favorable or Unfavorable (type U or F)? Will the labor efficiency variance (usage variance) be Favorable or Unfavorable (type U or F)?Explanation / Answer
Standcost:
Cot for materials for one neeeble=3*$4=$12
Cost for Labour for one needle=4*$17=$68
No of hours should take to build 2500 neebles=2,500*4=10,000 hours
cost of Materials to build the 2500 Neebles=2,500*$12=$30,000
Material Price Variance=AQ(SP-AP)6,750($4-$4.8)=-$5,400-U
Labour Effiency variance=(SH-AH)*SR=(10,000-9,000)*$17=$17,000
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