Refer to Exhibit 14.8 and the accompanying discussion in the text. Calculate the materials usage (quantity) variance for PVC during October 2019.

1

Direct materials usage (quantity) variance

2 Direct materials usage (quantity) variance

3 Purchase price variance

4 Calculate the flexible-budget variance for PVC during October 2019

EXHIBIT 14.8 A Detailed Comparison of Actual Variable Costs and Flexible-Budget Variable Costs: Product XV-1 (October 2019) SCHMIDT MACHINERY COMPANY October 2019 Product XV-1 Units Manufactured: 780 Actual Variable Costs Incurred Direct materials: Aluminum 3,630 pounds* at $26 per pound $94,380 PVC 720 pounds at $41 per pound 29,520 $123,900 Direct labor 3,510 hours at $42 per hour 147,420 Variable factory overhead 40,630 Total variable cost of goods manufactured $311,950 Variable selling and administrative expenses 39,000 Total variable costs incurred $350,950 Flexible Budget for Variable Costs Direct materials: Aluminum 780 units X 4 pounds x $25 = $78,000 PVC 780 units x 1 pound x $40 = 31,200 $109,200 Direct labor 780 units x 5 hours x $40 = 156,000 Variable factory overhead 780 units x 5 hours x $12 = 46,800 Total standard variable cost of goods manufactured $312,000 Variable selling and administrative expenses 39,000 Total flexible-budget variable costs $351,000 Variable Cost Flexible-Budget Variances Direct materials: Aluminum $94,380 $78,000 = $16,380U PVC 29,520 31,200 = 1,680F# $14,700U Direct labor 147,420 156,000 = 8,580F Variable factory overhead 40,630 46,800 = 6,170F Variable manufacturing cost flexible-budget variance $ 50F Variable selling and administrative expense variance Variable cost flexible-budget variance (see Exhibit 14.6 m) $ 50F - *Assume that pounds purchased = pounds used. U denotes an unfavorable variance. F denotes a favorable variance