Question
a. Determine the price variance, quantity variance, and total direct materials cost variance. Use the minus sign to enter favorable variances as negative numbers. Price
a. Determine the price variance, quantity variance, and total direct materials cost variance. Use the minus sign to enter favorable variances as negative numbers. Price variance: $__488________________ Unfavorable 2,440 X ($8.30 - $8.10) = $488 Unfavorable Quantity variance: $_____-$486______________ Favorable (2,440 - 2,500) X $8.10 = -$486 Favorable Total direct materials cost variance: $____2____________ unfavorable $488 - $486 = $2 Also (2440 X $8.3) - (2500 X $8.1) = $2 b. Determine the rate variance, time variance, and total direct labor cost variance. Use the minus sign to enter favorable variances as negative numbers. Rate variance: $____675__________ Unfavorable 3750 X ($17.68 - $17.50) = $675 Time variance: $____-875__________ Favorable (3750 - 3,800) X $17.50 = -$875 Total direct labor cost variance: $_____-$200________ Favorable $675 - $875 = -$200 Favorable Also (3750 X $17.68) - (3800 X $17.50) = -$200 Favorable c. Determine variable factory overhead Controllable Variance, the fixed factory overhead volume variance, and total factory overhead cost variance. Use the minus sign to enter favorable variances as negative numbers. Variable factory overhead controllable variance: $________-260___________ Favorable $8,100 - (3,800 X $2.20) = -$260 Fixed factory overhead volume variance: $_______350_________ Unfavorable $13,650 - (3,800 X $3.50) = $350 Total factory overhead cost variance: $_______90__________ Unfavorable $350 - $260 = $90 Also ($13,650 + $8,100) - (3800 X ($3.50+ $2.20) = 90 Unfavorable
Alternative Computation of Overhead Variances: | ||||||||||||||||||||
Factory Overhead | ||||||||||||||||||||
Bitmap Bitmap | Actual costs | * | * | Applied costs | Bitmap Bitmap | |||||||||||||||
Balance | * | * | ||||||||||||||||||
Underapplied | ||||||||||||||||||||
Actual Factory | Budgeted Factory Overhead | Applied Factory | ||||||||||||||||||
Overhead | for Amount Produced | Overhead | ||||||||||||||||||
Variable cost | $8,360 | |||||||||||||||||||
* | Fixed cost | 13,650 | $90 | * | ||||||||||||||||
Bitmap Bitmap Bitmap Bitmap | Total | Bitmap Bitmap Bitmap Bitmap Bitmap Bitmap Bitmap Bitmap Bitmap | $22,010 | |||||||||||||||||
($260) | F | $350 | U | |||||||||||||||||
Controllable | Volume | |||||||||||||||||||
Variance | Variance | |||||||||||||||||||
$90 | U | |||||||||||||||||||
Total Factory Overhead Cost Variance | ||||||||||||||||||||
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