Piedmont Manufacturing produces metal products with the following standard quant
ID: 2448428 • Letter: P
Question
Piedmont Manufacturing produces metal products with the following standard quantity and cost information:
Overhead rates were based on normal monthly capacity of 6,000 machine hours.
During November, the company produced only 850 units because of a labor strike, which occurred during union contract negotiations. After the dispute was settled, the company scheduled overtime to try to meet regular production levels. The following costs were incurred in November:
Calculate:
a. Total material price variance
b. Total material usage (quantity) variance
c. Labor rate variance
d. Labor efficiency variance
e. Variable overhead spending variance
f. Variable overhead efficiency variance
g. Fixed overhead spending variance
h. Volume variance
i. Budgetvariance
Explanation / Answer
Answer to the 1st 4 parts:
i)
ii)
iii)
iv)
Aluminum Copper Total Standard material per unit 4 3 Actual units produced 850 850 A Standard material for actual unit 3400 2550 B Standard price per unit (in$) 4 8 C Actual price per unit (in$) 3.8 8.4 D Price variance {A(B-C)} 680 -1020 -340(U)