The following information is provided to assist you in evaluating the performanc
ID: 2498147 • Letter: T
Question
The following information is provided to assist you in evaluating the performance of the production operations of Studio Company:
Calculate all variable production cost price and efficiency variances and fixed production cost price and production volume variances. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Do not round intermediate calculations. Round your answer to the nearest dollar amount. )
Price Variance Efficiency Variance Production Volume Variance
Direct Materials ______________ ______________ ____________
Direct labor _____________ _____________ ____________
Variable overhead ___________ _____________ ____________
Fixed overhead _____________ ____________ _____________
The following information is provided to assist you in evaluating the performance of the production operations of Studio Company:
Explanation / Answer
Actual Material Rate = 1.75 per gallon
Actual Labour Rate = 13.65 per Hour
Standard Production = 128040 / 3.3 = 38800
Std Fixed OH = 171200 - 38800*0.2*13 = 70320
Std Variable OH = 171200 - 70320 = 100880
Actual Fixed OH = 175200*39% = 68328
Actual Variable OH RATE = (175200 - 68328) / 9780 = 10.93
Material Cost Variance = Standard Cost - Actual Cost
= 128040 - 141050 = -13010 U
Material Price Variance = Standard Cost of Actual Qty. - Actual Cost = Actual Qty. (Standard Price - Actual Price) = 80600*1.65 - 141050 = 8060 U
Material Usage Variance = Standard Cost - Standard Cost of Actual Qty. = Standard Price (Standard Qty. - Actual Qty.) = 128040 - 80600*1.65 = 4950 U
Labour Cost Variance = Standard Cost - Actual Cost
= 108640 - 133497 = 24857 U
Labour Rate Variance = Standard Cost of Actual Time - Actual Cost = Actual Hrs. (Standard Rate - Actual Rate)
= 9780*14 - 133497 = 3423F
Labour Efficiency Variance = Standard Cost - Standard Cost of Actual Time = Standard Rate (Standard Hrs. - Actual Hrs.) = 108640 - 9780*14 = 28280 U
Variable Overhead Variance = Standard Variable Overheads - Actual Variable O/hs
= 100880 - 106872 = 5992 U
Variable Overhead Budget/ Expenditure Variance = Budgeted Variable Overheads - Actual Variable O/hs for actual hrs. = Actual Hrs. (Std. Rate - Actual Rate)
= 9780 ( 13 - 10.93) = 20244.6 F
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