Please show all work. Germ Free produces hand sanitizer. It uses units of produc

Question

Please show all work.

Germ Free produces hand sanitizer. It uses units of production as the cost driver for overhead and employs a standard costing system. The following information was provided by the company's controller for the month of May Complete the template below to calculate the required variances Actual Budget Units Produced Materials Purchased total kilograms Materials kilograms per unit Material Cost per kilogram Materials used total kilograms Total labor hours used Labor - hours per unit Labor wage per hour Fixed Overhead Total Variable Overhead Total Variable Overhead - per unit Overhead rate per unit 145,000 42,000 52,000 0.350 $7.10 $ 7.00 51,600 7,520 0.050 $14.75 $ 15.00 $ 143,500 $ 142,000 $ 111,250 $ 113,600 $ 0.80 $1.80

Explanation / Answer

Material price variance (based on material purchased) AP (a) SP (b) Variance (c=b-a) AQ (d) Total variance (e=c*d) F/U Material price variance = (AP-SP)*AQ AP = Actual price per unit = $7.1 SP = Standard price per unit = $7 AQ = Actual quantity purchased= 52000 F= Favourable U = Unfavourable Material price variance (based on material purchased) AP (a) SP (b) Variance (c=b-a) AQ (d) Total variance (e=c*d) F/U 7.1 7 -0.1 52000 -5200 U Material quantity variance (based on material purchased) AQ (a) SQ (b) Variance (c=b-a) SP (d) Total variance (e=c*d) F/U Material quantity variance = (AQ-SQ)*SP AQ = Actual quantity purchased= 52000 SQ = Standard quantity = 142000*0.35 = 49700 SP = Standard price per unit = $7 F= Favourable U = Unfavourable Material quantity variance (based on material purchased) AQ (a) SQ (b) Variance (c=b-a) SP (d) Total variance (e=c*d) F/U 52000 49700 -2300 7 -16100 U Material price variance (based on material used) AP (a) SP (b) Variance (c=b-a) AQ (d) Total variance (e=c*d) F/U Material price variance = (AP-SP)*AQ AP = Actual price per unit = $7.1 SP = Standard price per unit = $7 AQ = Actual quantity purchased= 51600 F= Favourable U = Unfavourable Material price variance (based on material used) AP (a) SP (b) Variance (c=b-a) AQ (d) Total variance (e=c*d) F/U 7.1 7 -0.1 51600 -5160 U Material price variance (based on material used) AQ (a) SQ (b) Variance (c=b-a) SP (d) Total variance (e=c*d) F/U Material quantity variance = (AQ-SQ)*SP AQ = Actual quantity purchased= 51600 SQ = Standard quantity = 142000*0.35 = 49700 SP = Standard price per unit = $7 F= Favourable U = Unfavourable Material quantity variance AQ (a) SQ (b) Variance (c=b-a) SP (d) Total variance (e=c*d) F/U 51600 49700 -1900 7 -13300 U Labor Rate variance AR (a) SR (b) Variance (c=b-a) AH (d) Total variance (e=c*d) F/U Labor Rate variance = (AR-SR)*AH AR = Actual Rate per hour = $14.75 SR = Standard Rate per hour = $15 AH = Actual hours = 7520 F= Favourable U = Unfavourable Labor Rate variance AR (a) SR (b) Variance (c=b-a) AH (d) Total variance (e=c*d) F/U 14.75 15 0.25 7520 1880 F Labor Efficiency variance AH (a) SH (b) Variance (c=b-a) AR (d) Total variance (e=c*d) F/U Labor Efficiency variance = (AH-SH)*AR AH = Actual hours = 7520 SH = Standard Hours = 142000*.05 = 7100 SR = Standard Rate per hour = $15 F= Favourable U = Unfavourable Labor Efficiency variance AH (a) SH (b) Variance (c=b-a) SR (d) Total variance (e=c*d) F/U 7520 7100 -420 15 -6300 U VOH controllable variance AR (a) SR (b) Variance (c=b-a) AH (d) Total variance (e=c*d) F/U VOH spending variance = (AR-SR)*AH AR = Actual Rate per unit = $111250/145000 = $0.767 0.767241379 SR = Standard Rate per hour = $0.8 AH = Actual units = 145000 F= Favourable U = Unfavourable VOH controllable variance AR (a) SR (b) Variance (c=b-a) AH (d) Total variance (e=c*d) F/U                  0.767 0.8                        0.03 145000 4750 U VOH volume variance AH (a) SH (b) Variance (c=b-a) SR (d) Total variance (e=c*d) F/U VOH efficiency variance = (AH-SH)*SR AH = Actual hours = 7520 SH = Standard Hours = 142000*.05 = 7100 SR = Standard Rate per hour = $0.8/0.05 = 16 16 F= Favourable U = Unfavourable VOH volume variance AH (a) SH (b) Variance (c=b-a) Price (d) Total variance (e=c*d) F/U 7520 7100 -420 16 -6720 U FOH budget variance Actual FOH Budgeted FOH Total variance F/U FOH budget variance = Actual FOH - Budgeted FOH FOH = Fixed overhead F= Favourable U = Unfavourable FOH budget variance Actual FOH Budgeted FOH Total variance F/U 143500 142000 -1500 U FOH volume variance Budgeted FOH Applied FOH Total variance F/U FOH volume variance = Budgeted FOH - Applied FOH Pre-determined fixed overhead rate = $1.8-0.8 = $1 Actual units produced = 145000 Applied FOH = $1*145000 = $145000 FOH = Fixed overhead F= Favourable U = Unfavourable FOH volume variance Budgeted FOH Applied FOH Total variance F/U 142000 145000 3000 U

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