nt Paragraph As Usual: Complete your answers using Excel Attach your excel file
ID: 2592143 • Letter: N
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nt Paragraph As Usual: Complete your answers using Excel Attach your excel file to your opened Blackboard Quiz Area Problem #1 --Variances: Sa yanaro makes Happy Coats. Cy budgets 1 hour of labor for his workers to make 4 happy Coats. Plus it takes 2 yards of material for each coat. Budgeted labor costs average $10 per hour; the cloth is budgeted at $14 per yard. Cy made 100,000 happy Coats during March. Cy bought 200,000 yards of cloth for $2,160,000 in March; he used 180,000 yards in production of the 100,000 coats. Payroll records show that 30,000 hours of direct labor wages were paid at a cost of $285,000. Re 1. Calculate the four cost variances for March. (2 for material and 2 for labor.) 2. What is the standard cost for the 100,000 coats?Explanation / Answer
1 Material price variance=Actual material consumed*(Standard price-Actual price) Actual price=Actual material cost/yards of cloth bought=2160000/200000=$10.8 per yard Material price variance=180000*(14-10.8)=576000 F Material quantity variance=(Standard material required-Actual material consumed)*Standard price Standard material required=Actual production*Standard material per coat=100000*2=200000 yards Material quantity variance=(200000-180000)*14=280000 F 2 Labor rate variance=Actual hours*(Standard rate-Actual rate) Actual rate=Actual labr cost/Actual hours=285000/30000=$9.5 per hour Labor rate variance=30000*(10-9.5)=15000 F Labor efficiency variance=(Standard hours required-Actual hours)*Standard rate Standard hours required=Actual production*Standard hours per coat Standard hours per coat=1/4=0.25 hour Standard hours required=100000*0.25=25000 hours Labor efficiency variance=(25000-30000)*10=50000 U 3 Standard cost : Material (100000*2*14) 2800000 Labor (100000*0.25*10) 250000 3050000
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