Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting Chapters 14-26

Authors: Carl Warren

27th Edition

1337272116, 978-1337272117

More Books

Students also viewed these Accounting questions

Question

4. What means will you use to achieve these values?

Answered: 1 week ago

Question

3. What values would you say are your core values?

Answered: 1 week ago