Please help.thanks ter at factors would vional labor price and efficiency varian
ID: 2403071 • Letter: P
Question
Please help.thanks
ter at factors would vional labor price and efficiency variances of professio ter of 2017 essiofl you consider in evaluating gLab sider in evaluating the effectiveness ofp Problems 7-34 manufactures bust statues of famous historical figures. omthe static the follownstt manufacturing labor variances. Emerald Statuary Expected production and sales Expected selling price per unit Total fixed costs Flexible budget, direct materials, and dir budget, direct materials, and direct manufac owing information is from the static budge informations. All statues are the same size. Each unit requires the 7,000 units S 680 $1,400,000 Standard quantities, standard prices, and facturing labor: unit standard unit costs follow for direct materials and direct manu- Cost Standard Price Standard Unit S 8 per pound S50 per hour 4.800, at an average selli Direct materials Direct manufacturing labor During 2017, actual number of units produced and sold was Standard Quantity 10 pounds 3.7 hours S 80 $185 manufacturinirect materials usepouced and sold was 4,800, at an average selling price of $720. Ac- labor-hours 2,100, based on 66,000 pounds purchased at $5.95 per pound. Direct were 18,300, at the rate of $48 per hour. As a result, actual direct ng price of S720. Ac- manufacturing labor costs were $878,400. Actual fixed costs were ending inventories. $1,170,000. There were no beginning orExplanation / Answer
FOR DIRECT MATERIAL VARIANCE-
DIRECT MATERIAL VARIANCE= STANDARD COST - ACTUAL COST=560000-392700=167300 (F)
DIRECT MATERIAL PRICE VARIANCE=(STD PRICE -ACTUAL PRICE)*ACTUAL QTY
=(8-5.95)66000=135300(F)
DIRECT MATERIAL USAGE VARIANCE=(STD QTY-ACT QTY)*STD PRICE
=(70000-66000)8=32000(F)
DIRECT LABOUR
LABOUR VARIANCE=$1295000-$878400=$416600 (F)
RATE VARIANCE= (50-48)*18300=$36600 (F)
EFFICIENCY VARIANCE=(25900-18300)*50=$380000(F)
SALES VOLUME VARIANCE= (ACTUAL SALE QTY-BUDGETED SALE QTY)BUDSELLEING PRICE
=(4800-7000)*680=$1496000(A)
F STANDS FOR FAV
A STADS FOR ADVERSE
STANDARD QTY STD PRICE STD COST ACTUAL QTY ACTUAL PRICE ACTUAL COST 70000 POUNDS $ 8 PER POUND 560000 66000 $5.95 392700 STANDARD COST $560000 ACTUAL COST $392700