BE 23-1 Direct materials variances. Alvarado Company produces a product that requires 3.0 standard pounds per unit. The standard price is $6.00 per pound. If 8,000 units used 23,900 pounds, which were purchased at $6.20 per pound, what is the direct materials. (a) price variance (b) quantity variance (c) cost variance BE 23-2 Direct labor variances. Alvarado Company produces a product that requires 7.5 standard direct labor hours per unit at a standard hourly rate of $22.50 per hour. If 8,000 units used 60,200 hours at an hourly rate of $21.95 per hour, what is the direct labor. (a) rate variance (b) time variance (c) cost variance BE 23-3 Factory overhead controllable variance. Alvarado Company produced 8,000 units of product that required 7.5 standard direct labor hours per unit. The standard variable overhead cost per unit is $1.45 per direct labor hour. The actual variable factory overhead was $85,900. Determine the variable factory overhead controllable variance. BE 23-4 Factory overhead volume variance. Alvarado Company produced 8,000 units of product that required 7.5 standard direct labor hours per unit. The standard fixed overhead cost per unit is $2.00 per direct labor hour at 55,000 hours, which is 100% of normal capacity. Determine the fixed factory overhead volume variance. BE 23-1 Direct materials variances. Alvarado Company produces a product that requires 3.0 standard pounds per unit. The standard price is $6.00 per pound. If 8,000 units used 23,900 pounds, which were purchased at $6.20 per pound, what is the direct materials. (a) price variance Standar price per pound = $ 6.00 Actual price per pound = $ 6.20 Standar quantity purchased = 8,000 units x 3.0 pounds/unit = 24,000 punds (Actual price - Standard price) x Actually price variance = ($6.20-$6.00) x 23,900 (b) quantity variance $0.20 x 23.900 $4.780 (Unfavorable) (Standard quantity - Actual quantity) x Standard price quantity variance 3.00 x 8,000 = 24,000 pounds (c) cost variance (24,000 - 23,900) x $6.00 $600 (Favorable) Actual cost - Standard cost actual cost = Actual quantity x Actual price actual cost = 23.900 x $6.20 = $148.580 24,000 x $ 6.00 = $144,000 BE 23-2 Direct labor variances. 148,580 144,000 $4.580 (Unfavorable) Alvarado Company produces a product that requires 7.5 standard direct labor hours per unit at a standard hourly rate of $22.50 per hour. If 8,000 units used 60,200 hours at an hourly rate of $21.95 per hour, what is the direct labor. (a) rate variance Standard rate per hour = $22.50 Actual rate per hour = $ 21.95 Standard hours = 8,000 units x 7.5 = 60,000 (21.95 22.50) x 60,200 -$0.55 x 60.200 -$33,110 (Unfavorable) (b) time variance (Actual hours - Standard hours) x Standard rate time variance (60,200 - 60,000) x $22.50 (c) cost variance 200 x $22.50 $4,500 (Unfavorable) Actual hours x Actual rate actual cost = 60,200 x $ 21.95 $1,323,790 Standard hours x standard rate standard cost = Cost Variance = 60,000 x $22.50 = 1,350,000 - $ 1,323,790 $1,350,000 -$26.210 (Unfavorable) BE 23-3 Factory overhead controllable variance. Alvarado Company produced 8,000 units of product that required 7.5 standard direct labor hours per unit. The standard variable overhead cost per unit is $1.45 per direct labor hour. The actual variable factory overhead was $85,900. Determine the variable factory overhead controllable variance. Actual variable overhead $ 85.900 Standard variable overhead 8,000 x 7.5 x $1.45 $ 87,000 Actual variable overhead - Standard variable overhead controllable variance = $ 85,900,- $87,000 -$1,100 (Unfavorable) BE 23-4 Factory overhead volume variance. Alvarado Company produced 8,000 units of product that required 7.5 standard direct labor hours per unit. The standard fixed overhead cost per unit is $2.00 per direct labor hour at 55,000 hours, which is 100% of normal capacity. Determine the fixed factory overhead volume variance. Standard fixed overhead 8,000 x 7.5 x 2.00 $ 120,000 Standard fixed overhead - Budgeted fixed overhead 120,000 $110,000 $10.000 (Favorable)