Exercise 23-9 Variances Costs Total Standard Cost Price Quantity LINK TO TEXT LI
ID: 2477411 • Letter: E
Question
Exercise 23-9
Variances
Costs
Total Standard Cost
Price
Quantity
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Exercise 23-9
You have been given the following information about the production of Horatio Co., and are asked to provide the plant manager with information for a meeting with the vice president of operations.Standard Cost Card Direct materials (5 pounds at $3 per pound) $15.00 Direct labor (0.8 hours at $7) 5.60 Variable overhead (0.8 hours at $4 per hour) 3.20 Fixed overhead (0.8 hours at $8 per hour) 6.40 $30.20
The following is a variance report for the most recent period of operations.
Variances
Costs
Total Standard Cost
Price
Quantity
Direct materials $407,200 $7,985 F $9,420 U Direct labor 183,900 5,550 U 7,460 UExplanation / Answer
Price Variance (Standard price-Actual Price )*Actual Quantity 1 Standard Price of Raw material per Unit (A) 15 Total Standard Raw material Cost (B) 407,200 Units Manufactured (B/A) 27,147 Formula Used (Standard Quantity for Actual Output- Actual Qty)*SP 2 Standard Qty requird (27147*5) 135735 Standard Price 15 Standard Cost (A) 2,036,025 Qunatity Variance (B) 9,420 U Actual Cost used and Purchase C (A+B) 2,045,445 Actual Quantity Prucahse (C/Stanadard Price) 136,363 Formula Used (Standard Price- Actual Price)*Actual Quantity 3 Standard Cost should used and purchase (D) 407,200 Price variance (E 7,985 Actual Cost shuold ( F) (D-E) 399,215 Actual Prcie (F/33500) 2.9 4 Formula Used (Standard Hours for Actual Output- Actual Hours)*SR Standard Hours requird (27147*.8) 21717.6 Standard Price 7 Standard Cost (A) 152,023 Qunatity Variance (B) 7,460 U Actual Cost used and Purchase C (A+B) 159,483 Actual Hours (C/Stanadard Price) 22,783 Formula Used (Standard Price- Actual Price)*Actual Hours 5 Standard Cost should Paid (D) 159,483 Price variance (E 5,550 U Actual Cost shuold ( F) (D+E) 165,033 Actual Prcie (F/22783) 7.2
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