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1.a) Material Variances: Standard quantity allowed for actual output Standard price per pound Actual Quantity purchased Actual Quantity used Actual price per pound 45000 5 60000 49200 $ 4.95 MATERIAL PRICE VARIANCE $ 3,000 Favorable MATERIAL QUANTITY VARIANCE $ -21,000 Unfavorable 1.b) Labor Variances: o Standard Hours allowed for actual output 1 Standard rate per hour 2 Actual Hours worked B Actual rate per hour 4 LABOR RATE VARIANCE 5 LABOR EFFICIENCY VARIANCE 12000 $ 16 11800 17.00 $ -11,800 Unfavorable 3,200 Favorable 1.c) Variable Overhead Variances: 6000 - Standard Hours allowed for actual output B Standard rate per hour e Actual Hours O Actual rate per hour 1 VARIABLE O/H RATE VARIANCE 5900 $ $ 3.10 -590 Unfavorable 300 Favorable 2 VARIABLE O/H EFFICIENCY VARIANCE %24

1.a) Material Variances: Standard quantity allowed for actual output Standard price per pound Actual Quantity purchased Actual Quantity used Actual price per pound 45000 5 60000 49200 $ 4.95 MATERIAL PRICE VARIANCE $ 3,000 Favorable MATERIAL QUANTITY VARIANCE $ -21,000 Unfavorable 1.b) Labor Variances: o Standard Hours allowed for actual output 1 Standard rate per hour 2 Actual Hours worked B Actual rate per hour 4 LABOR RATE VARIANCE 5 LABOR EFFICIENCY VARIANCE 12000 $ 16 11800 17.00 $ -11,800 Unfavorable 3,200 Favorable 1.c) Variable Overhead Variances: 6000 - Standard Hours allowed for actual output B Standard rate per hour e Actual Hours O Actual rate per hour 1 VARIABLE O/H RATE VARIANCE 5900 $ $ 3.10 -590 Unfavorable 300 Favorable 2 VARIABLE O/H EFFICIENCY VARIANCE %24

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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1. Summarize the variances that you computes in (1) above by showing the net overall favorable or unfavorable variances for the month. What impact did this figure have on the company's income statement? Show computations

2.Pick out the two most significant variances that you computed in (1) above. Explain tMs. Dunn possible causes of these variances.

 
A В 1 1.a) Material Variances: 45000 2 Standard quantity allowed for actual output 3 Standard price per pound 4 Actual Quantity purchased 5 Actual Quantity used 6 Actual price per pound 7 MATERIAL PRICE VARIANCE 5 60000 49200 4.95 3,000 Favorable -21,000 Unfavorable 8 MATERIAL QUANTITY VARIANCE 1.b) Labor Variances: 10 Standard Hours allowed for actual output $ 12000 11 Standard rate per hour 16 12 Actual Hours Worked 11800 $ 13 Actual rate per hour 14 LABOR RATE VARIANCE 15 LABOR EFFICIENCY VARIANCE 17.00 $ -11,800 Unfavorable 3,200 Favorable 1.c) Variable Overhead Variances: 6000 16 17 Standard Hours allowed for actual output 18 Standard rate per hour 3 19 Actual Hours 5900 20 Actual rate per hour 21 VARIABLE 0/H RATE VARIANCE 22 VARIABLE 0/H EFFICIENCY VARIANCE 3.10 $ $ -590 Unfavorable 300 Favorable %24
Transcribed Image Text:A В 1 1.a) Material Variances: 45000 2 Standard quantity allowed for actual output 3 Standard price per pound 4 Actual Quantity purchased 5 Actual Quantity used 6 Actual price per pound 7 MATERIAL PRICE VARIANCE 5 60000 49200 4.95 3,000 Favorable -21,000 Unfavorable 8 MATERIAL QUANTITY VARIANCE 1.b) Labor Variances: 10 Standard Hours allowed for actual output $ 12000 11 Standard rate per hour 16 12 Actual Hours Worked 11800 $ 13 Actual rate per hour 14 LABOR RATE VARIANCE 15 LABOR EFFICIENCY VARIANCE 17.00 $ -11,800 Unfavorable 3,200 Favorable 1.c) Variable Overhead Variances: 6000 16 17 Standard Hours allowed for actual output 18 Standard rate per hour 3 19 Actual Hours 5900 20 Actual rate per hour 21 VARIABLE 0/H RATE VARIANCE 22 VARIABLE 0/H EFFICIENCY VARIANCE 3.10 $ $ -590 Unfavorable 300 Favorable %24
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