Section C:- -Variance Analysis The following Corporation standard costs were dev
ID: 2584380 • Letter: S
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Section C:- -Variance Analysis The following Corporation standard costs were developed for product ACCT #4101 ofthe Golden Rams Standard Cost Card Per Unit Direct Materials: Direct Labor: 4 feet @ $14 per foot 8 hours @ S10 per hour 8 hours @ $8 per hour 8 hours@$12 per hour Variable Overhead: Fixed Overhead: The following actual information is available for the period: 11,000 units 45,000 feet @ $13.70 per foot 45,000 feet @ $13.70 per foot 84,000 hours @ $10 per hour Units Produced Material Used Direct Labor. Actual overhead incurred for the period: Variable Fixed $ 756,000 $1,000,000 Budgeted fixed manufacturing overhead for the period is $960,000, and the standard fixed overhead rate is based on expected capacity of 80,000 direct labor hours. Note: Indicate if a variance is favorable (F) or unfavorable (U). 1. Compute the direct materials price variance and direct materials efficiency variance 2. Compute the direct labor price variance and direct labor efficiency varianceExplanation / Answer
Direct Material Price Variance = (Standard Rate - Actual Rate) x Actual Quantity = ( 14.00 - 13.70) x 45000 = 13500 Fav Direct Material Quantity Variance = (Standard Quantity - Actual Quantity) x Standard Rate = ( 11000 x 4.00 - 45000) x 14.00 = 14000 Unfav Direct Labor Rate Variance = (Standard Rate - Actual Rate) x Actual Hours = [10 - 10] x 84000 = NIL Direct Labor Efficiency Variance = (Standard Hours- Actual Hours) x Standard Rate = [8.00 x 11000 - 84000] x 10 = 40000 Fav
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