s3lite.msu.edu White Noise Pearson My ab Jackson Shencom, GN Oro alle Apha X?Dei

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s3lite.msu.edu White Noise Pearson My ab Jackson Shencom, GN Oro alle Apha X?Deita Fa Course Contents GRADED LON-CAPA Homework ss1s 11-1 nc. manufactures huge MSU flags for tailgating. The company uses a standard costing system and applies overhead on the basis of direct labor hours about this product Victory provides the following informatien material 18.0 yards of material per Rag t $12.80 per yard labor 3.0 hours per flag at $10.60 per hour Variable manufacturing overhead (MOH) standard rate $4.00 per direct labor hour Predetermined fixed MOH standard rate $11.00 per direct labor hour Total budgeted floxed MOH cost $81,600 Actual cost data from the most recent month: 43,400 yards of material at a total cost of $647,300 sed 38,900 yards of material in producing 2,000 flags ctual direct labor cost of $81,280 for a total of 8,920 hours variable ??? cost $44,629 fixed MOH cost $79,300 There are a total of eight questions below, each worth 0.5 points. Carry your answers to four decimal places 1. Calculate direct material variances. Enter as a positive if fevorable and negative if unfavorable a. Direct material price variance: b. Direct material quantity variance: Tries 0/10 2. Calculate direct labor variances. Enter as a positive i favorable and a negative if unfaverable a. Direct labor rate variance: b. Direct labor efficilency variance: An ww Tries 0/10 3. Calculate variable manufacturing overhead (MOH) variances. Enter as a positive if favorable and negative if unfavorable a. Variable MOH rate variance: b. Variable MOH efficiency variance: Tries 0/10 Calculate fixed manufacturing overhead (MOH) variances. Enter as a positive # favorable and negative if unfavorable ?, Fixed overhead budget variance: b. Fixed overhead volume variance: " Tries 0/ 10 Send Feedback This discussion is closed.

Explanation / Answer

Part 1(a) – Material Price Variance

Material Price Variance is the variance arises in the material cost due to difference in actual material purchase price from standard material price. Mathematically, it is calculated as below:

Material Price Variance = Actual Quantity (Standard Price – Actual Price)

Note --- Here actual quantity means actual quantity of material PURCHASED. If the question does not provide the information about material purchase, it is taken as equal to material consumed.

Direct Material Price Variance

Actual Price (AP) ($647,300 / 43400)

$14.9147

per yard

Standard Price (SP)

$12.800

per yard

Variance or Difference in Price

$2.115

per yard

x Actual Quantity PURCHASED

43400

ounce

Material Price Variance

$91,778

Unfavorable

Unfavorable because actual cost paid for material purchase is higher than anticipated.

Part 1(b) --- Material Quantity/Efficiency/Usage Variance

Material Efficiency (Usage) Variance measures variance in material cost due to usage/consumption of materials. It is calculated as below:

Material Quantity Variance = Standard Price (Standard Quantity for Actual Production – Actual Quantity USED)

Note --- Here actual quantity means actual quantity of material CONSUMED/USED

Direct Material Quantity Variance

Standard Quantity Allowed for actual production:

Actual Production/Activity

2000

Bags

x Allowed Standard Quantity Per Unit

18

Yards

Total Standard Quantity Allowed for actual production (SQAP)

36000

Yards

Actual Quantity USED (AQU)

38900

Yards

Variance or Difference in Quantity

2900

ounce

x Standard Price (SP)

$12.80

per yard

Material Quantity Variance

$37,120

Unfavorable

Unfavorable because actual quantity used is higher than standard quantity at standard cost

Part 2(a) – Labor Rate Variance

Labor Price Variance – It arises due to difference in actual rate paid from standard rate. It is calculated as below:

Labor Price Variance = Actual Time (Standard Rate per hour – Actual Rate per hour)

Here, actual time means time for which wage has been paid.

Labor Rate Variance

Actual Hourly Rate (AHR) (81,280 / 8920)

$9.1121

Per Hour

Standard Hourly Rate (SHR)

$10.60

Per Hour

Variance or Difference in Rate

$1.4879

Per Hour

x Actual Labor Hours worked

8920

Hours

Labor Rate Variance

$13,272

Favorable

Favorable Labor Rate Variance because actual hourly rate paid is less than standard hourly rate.

Part 2(b) -- Labor Quantity Variance

Labor Efficiency Variance – It arises due to variation in the working hours from the set standard.

Labor Quantity / Efficiency Variance

Standard Hours Allowed for actual production:

Actual Production

2000

Bags

x Allowed Standard Hours Per Unit

3

hours

Total Standard Hours Allowed for actual production (SHAP)

6000

hours

Actual Labor Hours Worked (AH)

8920

hours

Variance or Difference in Hours (AH - SHAP)

2920

hours

x Standard Hourly Rate (SHR)

$10.60

per hour

Labor Efficiency Variance

$30,952

Unfavorable

Unfavorable Labor Efficiency Variance because the Actual Hours Worked is higher than the allowed standard hours at standard rate

Hope the above calculations, working and explanations are clear to you and help you in understanding the concept of question.... please rate my answer...in case any doubt, post a comment and I will try to resolve the doubt ASAP…thank you

Pls ask separate question for remaining parts.

Direct Material Price Variance

Actual Price (AP) ($647,300 / 43400)

$14.9147

per yard

Standard Price (SP)

$12.800

per yard

Variance or Difference in Price

$2.115

per yard

x Actual Quantity PURCHASED

43400

ounce

Material Price Variance

$91,778

Unfavorable

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