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E25-7 Compute materials and labor variances Levine Inc. which produces a single product, has prepared the following standard cost sheet for one unit of the
| E25-7 Compute materials and labor variances | |||||||||||||||||||
| Levine Inc. which produces a single product, has prepared the following standard cost sheet | |||||||||||||||||||
| for one unit of the product. | |||||||||||||||||||
| Quantity | Unit Cost | Total Cost | |||||||||||||||||
| Direct Materials (pounds) | 8 | $2.50 | $20.00 | ||||||||||||||||
| Direct Labor (hours) | 3 | $12.00 | $36.00 | ||||||||||||||||
| During the month of April, the company manufactures 230 units and incurs the following | |||||||||||||||||||
| actual costs. | |||||||||||||||||||
| Units Produced | Quantity Used | Total Cost | |||||||||||||||||
| Direct Materials (pounds) | 230 | 1,900 | $5,035 | ||||||||||||||||
| Direct Labor (hours) | 230 | 700 | $8,120 | ||||||||||||||||
| Instructions | |||||||||||||||||||
| Compute the total, price, and quantity variances for materials and labor. | |||||||||||||||||||
| As with the Ch 24 problem, you can use conditiion formatting or favorable/unfavorable, or determine manually. | |||||||||||||||||||
| (a) | Total Materials Variance: | ||||||||||||||||||
| ( | AQ | X | AP | ) | minus | ( | SQ | X | SP) | ) | Variance $ | Fav/Unf | |||||||
| ( | Value | X | Value | ) | minus | ( | Value | X | Value | ) | = | ? | minus | ? | = | ? | ? | ||
| Materials price variance: | |||||||||||||||||||
| ( | AQ | X | AP | ) | minus | ( | AQ | X | SP | ) | |||||||||
| ( | Value | X | Value | ) | minus | ( | Value | X | Value | ) | = | ? | minus | ? | = | ? | ? | ||
| Materials quantity variance: | |||||||||||||||||||
| ( | AQ | X | SP | ) | minus | ( | SQ | X | SP | ) | |||||||||
| ( | Value | X | Value | ) | minus | ( | Value | X | Value | ) | = | ? | minus | ? | = | ? | ? | ||
| (b) | Total Labor Variance: | [Note: Labor variances use Hours instead of Quantity and Rates instead of Prices | |||||||||||||||||
| but the process is the same.] | |||||||||||||||||||
| ( | AH | X | AR | ) | minus | ( | SH | X | SR | ) | |||||||||
| ( | Value | X | Value | ) | minus | ( | Value | X | Value | ) | = | ? | minus | ? | = | ? | ? | ||
| Labor Price variance: | |||||||||||||||||||
| ( | AH | X | AR | ) | minus | ( | AH | X | SR | ) | |||||||||
| ( | Value | X | Value | ) | minus | ( | Value | X | Value | ) | = | ? | minus | ? | = | ? | ? | ||
| Labor quantity variance: | |||||||||||||||||||
| ( | AH | X | SR | ) | minus | ( | SH | X | SR | ) | |||||||||
| ( | Value | X | Value | ) | minus | ( | Value | X | Value | ) | = | ? | minus | ? | = | ? | ? | ||
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Internal Control Audit And Compliance Documentation And Testing Under The New COSO Framework
Authors: Graham
1st Edition
1118996216, 978-1118996218
