Finals start next week, can someone help show me how to solve the problem below?

Question

Finals start next week, can someone help show me how to solve the problem below?

THANKS!

Questions 2 and 3 apply to George who reported a $500 variable material costs variance for the quarter.

                            AVC               Volume            Total Cost

      Budget                        $ 9.75              2,000               $19,500

      Actual             $10.00             1,900               $19,000

      Variance        $   .25 U          100 U                        $     500 F       

Remember to indicate (U) for unfavorable and (F) for favorable ...watch your signs (+ -)

2) How much of the total variance is a Cost per unit? $__________

3) How much of the total variance is a Volume Variance? $__________

Explanation / Answer

2) Total cost variance is the difference between budgeted cost and actual cost.

Cost variance = $19,500 - $19,000 = $500

Cost per unit = $500 / 2000 = $0.25 which is unfavourable (U)

3) Total volume variance is the difference between budgeted volume and actual volume.

Volume variance = 2000 - 1000 = 100 which is unfavourable (U)

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