SOCSCI 2AC3 Lecture Notes - Lecture 7: Direct Labor Cost, Kilogram
4 Apr 2018
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U unfavorable if u need to pay more in expenses. F favorable total variance is price and quantity variance added. Variable costs : price variance : quantity variance. Direct material : mpv = aq (ap-sp) : mqv = sp (aq-sq) Direct labour : lrv = ah (ar-sr) : lev = sr (ah-sh) Manu overhead : vmrv = ah(ar-sr) : vmev = sr(ah-sh) given actual output how much should we have used standard quantity. The standards relating to one of these products are shown below, along with actual cost data for may. The production superintendent was pleased when he saw this report and commented: this sh. 08 excess cost is well within the 2 percent limit management has set for acceptable variances. Actual production for the month was 12,000 units. Variable overhead cost is assigned to products on the basis of direct labor-hours. There were no beginning or ending inventories of materials.
