Standard Price per Unit

Filler 4.0 lb 5.2lb $2.00 per lb

Liner 7.0 yds 9.4 yds 8.00 per yd

Planned Production 5,000units 6,200units

Standard labor rate 14.00 per hr 13 per hr

Company does not expect there to be any beginning or ending inventories of filler and lining material. At the end of budget year, Company experienced the follow accrual results :

Womens Coat Men's Coat

Actual production 5,000units 5,800units

Actual Price per Unit Actual Quantity Purchased and Used

Filler $1.90 per lb 48,000

Liner $8.20 per yd 85,100

Actual Labor Rate Actual Labor Hours Used

Womens Coats $14.10 per hr 1,825

Mens coats $13.30 per hr 2,800

The expected beginning inventory and desired ending inventory were realized.

Instructions

1. Prepare the following variance analyses for both coats and the total, based in the actual results and production levels at the end of the budget year:

a. Direct materials price, quantity, and total variance

b. Direct labor rate, time, and total variance

1. Why are the standard amounts in part (1) based on the actual production at the end of the year instead of the planned production at the beginning of the year?

Filler