Question
Please help me solve the analysis chart and answer the last question You are excited about your future prospects. You created budgets three months ago
Please help me solve the analysis chart and answer the last question
You are excited about your future prospects. You created budgets three months ago and now it is time to measure your actual costs and volume against your budgets. You decide to evaluate direct materials and direct labor variances to measure actuals against 1st Quarter budgets. The tables below depict the actuals for January, February, and March. Perform direct materials and direct labor evaluations and discuss what may be causing any variances.
| Analysis | Standard Formula | Answer | Favorable / Unfavorable | What does this tell us? |
| Sample | Actual Price X Actual Quantity | $XXX.00 | ||
| Direct Materials Price Variances | ||||
| Direct Materials Quantity Variances | ||||
| Direct Labor Rate Variance | ||||
| Mixers | ||||
| Bakers | ||||
| Packers | ||||
| Direct Labor Time Variance | ||||
| Mixers | ||||
| Bakers | ||||
| Packers | ||||
| 1. The Direct Labor Rate Variance and the Direct Labor Time Variance are a summation of the mixers, bakers, and packers. | ||||
| Sales Actuals | |||
| Q1 | |||
| Actual sales | 37,000 | ||
| Actual, average selling price per dozen | $ 15.64 | ||
| Actual direct material cost | $ 203,354.80 | ||
| Actual direct labor cost | $ 65,057.93 | ||
| Total Sales revenue | $ 578,680.00 |
|
| Production Actuals | |||
| Q1 | |||
| Budgeted Sales | 37,000 | ||
| Desired Ending Inventory | 411 | ||
| Total Units Needed | 37,411 | ||
| Less: Beginning Inventory | (380) | ||
| Required Production | 37,031 |
| Materials Actuals | |||||
| Q1 | |||||
| Required production | 37,031 | ||||
| Raw materials needed | |||||
| Material | Amt per dz | ||||
| Flour | 0.75 | 27,773 | |||
| Butter | 0.25 | 9,258 | |||
| Sugar | 0.57 | 21,108 | |||
| Eggs | 0.17 | 6,172 | |||
| Milk | 0.09 | 3,333 | |||
| Cocoa Powder | 0.25 | 9,258 | |||
| Chocolate icing | 0.75 | 27,773 | |||
| Bakery box | 1.00 | 37,031 | |||
| Material | Cost per unit | ||||
| Flour | $ 1.55 | $ 43,124.69 | |||
| Butter | $ 0.84 | $ 7,742.71 | |||
| Sugar | $ 1.13 | $ 23,892.78 | |||
| Eggs | $ 0.82 | $ 5,078.22 | |||
| Milk | $ 1.66 | $ 5,543.43 | |||
| Cocoa Powder | $ 2.95 | $ 27,336.74 | |||
| Chocolate icing | $ 1.88 | $ 52,190.72 | |||
| Bakery box | $ 1.04 | $ 38,445.49 | |||
| Total | $ 203,354.80 | $ 5.50 | |||
| Labor Actuals | |||||
| Q1 | |||||
| Dz/Hr | Actual Time | Hrly Rate | 37,031 | ||
| Mixers | 32 | 1157.22 | $ 15.00 | $ 17,358.33 | |
| Bakers | 18 | 2057.28 | $ 16.50 | $ 33,945.19 | |
| Packers | 35 | 1058.03 | $ 13.00 | $ 13,754.41 | |
| Total | $ 65,057.93 | ||||
| *Actual time based on 1st quarter Required Production listed on this tab | |||||
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Intermediate Accounting
Authors: Earl K. Stice, James D. Stice
19th edition
1133957919, 978-1285632988, 1285632982, 978-0357691229, 978-1133957911
