Lido Company's standard and actual costs per unit for the most recent period, during which 500 units were actually produced, are given below:??StandardActual?Materials:???Standard: 2 feet × $1.50 per foot$3.00??Actual: 1.9 feet × $1.60 per foot?$3.04?Direct labor:???Standard: 1.5 hours × $6.00 per hour9.00??Actual: 1.7 hours × $6.30 per hour?10.71?Variable manufacturing overhead:???Standard: 1.5 hours × $3.40 per hour5.10??Actual: 1.7 hours × $3.00 per hour_____5.10?Total unit cost$17.10$18.85All of the materials purchased during the period were used in production during the period.Required:From the foregoing information, compute the following variances. Indicate whether the variance is favorable (F) or unfavorable (U):a. Material price
variance.b. Material quantity variance.c. Labor rate variance.d. Labor efficiency variance.e. Variable overhead rate variance.f. Variable overhead efficiency variance.
What will be an ideal response?
a. Actual quantity of materials used = 1.9 feet per unit × 500 units = 950 feet
Materials price variance = AQ × (AP ? SP)
= 950 feet × ($1.60 per foot ? $1.50 per foot)
= 950 feet × ($0.10 per foot)
= $95 U
b. Materials quantity variance = (AQ ? SQ) × SP
= [950 feet ? (2 feet per unit × 500 units)] × $1.50 per foot
= [950 feet ? 1,000 feet] × $1.50 per foot
= ?50 feet × $1.50 per foot
= $75 F
c. Actual direct labor-hours = 1.7 hours per unit × 500 units = 850 hours
Labor rate variance = AH × (AR ? SR)
= 850 hours × ($6.30 per hour ? $6.00 per hour)
= 850 hours × ($0.30 per hour)
= $255 U
d. Labor efficiency variance = (AH ? SH) × SR
= [850 hours ? (1.5 hours per unit × 500 units)] × $6.00 per hour
= [850 hours ? 750 hours] × $6.00 per hour
= [50 hours] × $6.00 per hour
= $600 U
e. Variable overhead rate variance = AH × (AR ? SR)
= 850 hours × ($3.00 per hour ? $3.40 per hour)
= 850 hours × (?$0.40 per hour)
= $340 F
f. Variable overhead efficiency variance = (AH ? SH) × SR
= (850 hours ? 750 hours) × $3.40 per hour
= (100 hours) × $3.40 per hour
= $340 U
You might also like to view...
Which of the following events will cause a company's current ratio to increase?
a. The collection of an account receivable b. Selling land for cash at a loss c. The discharge of an account payable by signing a short-term note payable d. Paying off a long-term loan
Which of the following identity theft actions listed is considered to be part of the first dimensional actions?
a. efforts to gain victim's personal information. b. larger thefts, often involving personal interaction, without much chance of getting caught. c. largest thefts committed after perpetrators have confidence that their schemes are working. d. small thefts to test the stolen information.
When moving through shadow negotiations, appreciative moves alter the negotiation process itself through adjustments to the agenda, sequencing, decision rules, and the like.
Answer the following statement true (T) or false (F)
Customer satisfaction is defined as ________.
A. the number of purchases in a defined period of time B. retaining satisfied and loyal profitable customers and channels C. increasing the likelihood that a customer becomes a buzz marketer D. the degree to which an individual will resist switching from one offering to another E. the level at which the offering meets or exceeds a customer's expectations