13-1 Character of Variances

Required: Compute variances for the items shown in the following list and indicate whether each variance is favorable (F) or unfavorable (UF).

Item	Budget	Actual	Variance	F or UF
Selling and Administrative Expenses	$ 29,000	$ 27,000
Sales Revenue	$310,000	$325,000
Materials Price	$2.00 per lb.	$2.10 per lb.
Cost of Goods Sold	$125,000	$100,000
Materials Purchases	$250,000	$265,000
Materials Usage	6,000 lbs.	5,800 lbs.
Sales Price	$550 each	$500 each
Labor Rate	$8.10 per hour	$7.95 per hour
Production Volume	950 units	900 units
Labor Usage	$96,000	$97,000
Research and Development Expense	$22,000	$25,000