Question
I need help. I know the formula for Quantity variance is (Actual price-Standard Price) x Actual quantity. But I don't know how to calculate actual
I need help. I know the formula for Quantity variance is (Actual price-Standard Price) x Actual quantity. But I don't know how to calculate actual price.
The following information is for the standard and actual costs for Chesapeake Bay Corporation.
Standard Costs:
Budgeted units of production - 16,000 (80% of capacity)
Standard labor hours per unit - 4
Standard labor rate $26 per hour
Standard material per unit - 8 lbs.
Standard material cost - $ 12 per lb.
Budgeted fixed overhead $640,000
Standard variable overhead rate - $15 per labor hour.
Fixed overhead rate is based on budgeted labor hours at 80% capacity.
Actual Cost:
Actual production - 16,500 units
Actual fixed overhead - $640,000
Actual variable overhead - $1,000,000
Actual labor - 65,000 hours, total labor costs $1,700,000
Actual material purchased and used - 130,000 lbs, total material cost $1,600,000
Actual variable overhead - $1,000,000
Determine: (a) the quantity variance
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started