Need help understanding how to answer all this. Would like to learn, not just ge

Question

Need help understanding how to answer all this. Would like to learn, not just get the answers. Thank you. Problem 8-23A Computing materials, labor, and cost veriances LO 8-5, 8-6 The following data were drawn from the records of Adams Corporation. Planned volume for year (static budget) Standard direct materials cost per unit Standard direct labor cost per unit Total expected fixed overhead costs Actual volume for the year (flexible budget) Actual direct materials cost per unit Actual direct labor cost per unit Total actual fixed overhead costs 3,100 units 3.48 pounds $1.40 per pound 2.28 hours e s3.18 per hour $17,368 3,500 units 2.98 pounds $1.80 per pound 2.68 hours $2.70 per hour $13,068 Required a. Prepare a materials variance information table showing the standard price, the actual price, the standard quantity and the ectual quantity Caiculate the materials price end usage variances. Indicate whether the variances are favorable (Fi or unfavorable (U c. Prepere o labor variänce informetion table showing the standard price, the actual price. the standard hours. and the actual hours. d. Calculate the labor price and usage variances. Indicate whether the variances are favorable (F) or unfavorable (U e. Calculate the predetermined overhead rate. assuming that Adams uses the number of unts as the allocation bese f. Calculate the fixed cost spending variance Indicate whether the variance is favorable (F) or unfavorable (U g Calculate the fixed cost volume verience. Indicote whether the vaience is favorable (F) or unfevorable (u) Complete this question by entering your answers in the tabs below. search

Explanation / Answer

Solution a:

Solution b:

Material price variance = (SP - AP) * AQ = ($1.40 - $1.80) * 10150 = $4,060 U

Material quantity variance = (SQ - AQ) * SP = (11900 - 10150) * $1.40 = $2,450 F

Solution c:

Solution d:

Direct labor rate variance = (SR- AR) * AH = ($3.10 - $2.70) * 9100 = $3,640 F

Direct labor efficiency variance = (SH - AH) * SR = (7700 - 9100) * $3.10 =$4,340 U

Solution e:

Predeteremined overhead rate = Budgeted fixed overhead / Budgeted nos of units = $17,360 / 3100 = $5.60 per unit

Solution f:

Fixed cost spending variance = Budgeted fixed overhead - Actual fixed overhead

= $17,360 - $13,060 = $4,300 F

Solution g:

Fixed cost volume variance = Fixed cost applied - Budgeted fixed cost = (3500 * $5.60) - $17,360

= $2,240 F

Material Variance information table Particulars Standard price of material per pound $1.40 Actual price of material per pound $1.80 Standard quantity of material for actual production (In Pounds) (3500*3.40) 11900 Actual quantity of material for actual production (In Pounds) (3500*2.90) 10150

Related Questions

Navigate

• Browse (All)
• Browse N
• Subjects

---