Question
Can someone help me through this question? I started doing the direct materials price variance but I think I may have the wrong numbers from
Can someone help me through this question? I started doing the direct materials price variance but I think I may have the wrong numbers from the information. I mix up which ones to use, or if there is another step. Any help is appreciated!
Atlantic Hot Tub Company actually produced 300 units of product during June of 2000, which are 20 units higher than the anticipated static budget of 280 units.The Company gathered the following information:
DirectDirect
MaterialsLabor
Standard price/unit of input$40/lb.$8.00/hr.
Actual price/unit of input$37/lb.$8.50/hr.
Standard input allowed/unit of output4 lbs.3 hrs.
Actual units of input1,100 lbs.890 hrs.
Other information gathered was:
Predetermined variable overhead rate was $2.00 per direct labor hour (actual variable overhead is $2,000).
Predetermined fixed overhead rate was $4.00 per direct labor hour (actual fixed overhead is $3,500).
Required:Compute the following.
a.Directmaterials price variance
DM price variance = (Standard unit - Actual unit) x Actual quantity
DMPV= (40.00 - 37.00) x 1,100
Direct Materials Price Variance = 3,300
b.Directmaterials quantity variance
DM quantity variance = (standard quantity - actual quantity) x standard price per unit
c.Directlabor rate variance
d.Directlabor efficiency variance
e.Variableoverhead spending variance
f.Variableoverhead efficiency variance
g.Fixedoverhead spending variance
h.Fixedoverhead volume variance
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