ACCTG 102 Lecture 11: Acctg_102_-_Lecture_11

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ochrehornet578

18 Jun 2020

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Materials variances are added to cost of goods sold if they are unfavourable. Materials variances are substracted from cost of goods sold if favourable. Total labour variance = actual costs budgeted costs. = (ah x ar) (sh x sr) Ah = actual direct labour hours used. Sh = standard direct labour hours used. Sr = standard hourly wage rate (exo. Labour rate variance lrv = (ar sr) x ah. Labour efficiency variance lev = (ah sh) x sr. Compare actual costs with budgeted costs for the budgeted level of activity. Two ways: static budget compare actual costs with budgeted costs for the budgeted level of activity. Flexible budget compare actual costs with the actual level of activity. Budget for one particular level of activity. Performance report compares: - direct materials, direct labor, and overhead costs budgeted for the planned level of activity with actual costs for the actual level of activity.

Related Questions

The following information was compiled by Wildhorse Company:

Expected volume of production	110,000	units
Actual level of production	105,000	units
Budgeted fixed overhead	$220,000
Actual fixed overhead	$228,150
Variable overhead rate per direct-labour hour	$8
Actual variable overhead	$406,000
Standard direct-labour hours allowed per unit produced	0.5	hour
Standard direct-labour rate per hour	$8.05
Actual direct-labour hours of input	52,400	hours
Actual direct-labour rate per hour	$8.10

Compute the following variances:

Direct-labour flexible-budget variance $______(Favourable/Unfavourable/neither)

tanbadger888

Buil Corporation manufactures a single product. The standard cost per unit of product is as follows.

Direct materialsâ2 pounds of plastic at $6 per pound $12

Direct laborâ2 hours at $13 per hour 26

Variable manufacturing overhead 7

Fixed manufacturing overhead 5

Total standard cost per unit $50

The master manufacturing overhead budget for the month based on normal productive capacity of 20,000 direct labor hours (10,000 units) shows total variable costs of $70,000 ($3.50 per labor hour) and total fixed costs of $50,000 ($2.50 per labor hour). Normal productive capacity is 20,000 direct labor hours. Overhead is applied on the basis of direct labor hours. Actual costs for November in producing 9,700 units were as follows.

Direct materials (20,000 pounds) $119,000

Direct labor (19,600 hours) 256,760

Variable overhead 68,800

Fixed overhead 50,000

Total manufacturing costs $494,560

The purchasing department normally buys the quantities of raw materials that are expected to be used in production each month. Raw materials inventories, therefore, can be ignored.

Instructions

(a) Compute all of the materials and labor variances.

(b) Compute the total overhead variance.

(a) Total Materials Variance:

( AQ x AP )	-	( SQ x SP )	=
	-		=
	-		=

Materials Price Variance:

( AQ x AP )	-	( AQ x SP )	=
	-		=
	-		=

Total Materials Variance:

( AQ x AP )	-	( SQ x SP )	=
	-		=
	-		=

Total Labor Variance:

( AH x AR )	-	( SH x SR )	=
	-		=
	-		=

*9,700 x 2

Labor Price Variance:

( AH x AR )	-	( SH x SR )	=
	-		=
	-		=

Labor Quantity Variance:

( AH x SR )	-	( SH x SR )	=
	-		=
	-		=

(b) Total Overhead Variance:

Actual Overhead	-	Overhead Applied	=
	-		=
	-		=

goldzebra102

Kopecky Inc., which produces a single product, has prepared thefollowing standard cost sheet for one unit of the product:

Per unit

Direct materials (6 kg at $2.50 per kg) $15.00

Direct labour (3.1 hrs at $12 per hr) $37.20

During the month of April, the company manufactures 250 unitsand incurs the following actual costs:

Direct materials purchased and used (1,600 kgs) $4,192

Direct labour (760 hours) $8,740

Calculate the price and quantity variances for direct materials,as well as the total variance. Make sure you indicate if thevariances are favourable or unfavourable.

Calculate the rate and efficiency variances for direct labour,as well as the total variance. Make sure you indicate if thevariances are favourable or unfavourable.

ceruleanturtle953

ACCTG 102 Lecture 11: Acctg_102_-_Lecture_11

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