Materials Variance Information Table Standard price per pound Actual price per p
ID: 2534632 • Letter: M
Question
Materials Variance Information Table Standard price per pound Actual price per pound Standard quantity for flexible budget pounds Actual quantity used pounds Problem 8-23A Computing materials, labor, and cost variances LO 8-5, 8-6 The following data were drawn from the records of Munoz 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 4,400 units 4.00 pounds $1.90 per pound 3.50 hours 8 $3.90 per hour $23,320 4,700 units 3.70 pounds $2.40 per pound 3.90 hours 8 $3.50 per hour $19,020 Required a. Prepare a materials variance information table showing the standard price, the actual price, the standard quantity, and the actual quantity b. Calculate the materials price and usage variances. Indicate whether the variances are favorable (F) or unfavorable (U) c. Prepare a labor variance information 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 Munoz uses the number of units as the allocation base f. Calculate the fixed cost spending variance. Indicate whether the variance is favorable (F) or unfavorable (U) g. Calculate the fixed cost volume variance. Indicate whether the variance is favorable (F) or unfavorable (U)Explanation / Answer
(a)
Materials Variance Information Table
Standard price
1.90
per pound
Actual price
2.40
per pound
Standard quantity for flexible budget
(4700*4) =18800
pounds
Actual quantity used
(4700*3.70) = 17390
pounds
(b) Material Price Variance :-
(Std price – Actual Price) * Actual Qty
(1.9-2.4) * 17390 = 8695(U)
Material Usage Variance :-
(Std Qty – Actual Qty ) * Std price
(18800-17390) * 1.9 = 2679 (F)
(c)
Labor Variance Information Table
Standard price
3.90
per hour
Actual price
3.50
per hour
Standard hours for flexible budget
(4700*3.5) = 16450
Actual hours used
(4700*3.90) = 18330
(d) Labour Price Variance :-
(Std price – Actual Price) * Actual Hrs
(3.9-3.5) * 18330 = 7332 (F)
Labour Usage Variance :-
(Std Hrs – Actual Hrs) * Std price
(16450-18330) * 3.90 = 7332 (U)
(e) Predetermined O/H Rate :-
Total expected fixed OH cost / Planned units
= 23320/4400 = 5.30
(f) Fixed cost spending variance :-
Actual Fixed O/H – Budgeted F. O/H
Actual F. O/H = 19020
Budgeted F. O/h= 23320
= (19020-23320) = 4300(F)
(g) Fixed O/h Volume Variance:-
Bdt F. O/H – Std F. O/H
Std f. O/H = 4700*5.3 = 24910
= (23320-24810) = 1590(F)
Materials Variance Information Table
Standard price
1.90
per pound
Actual price
2.40
per pound
Standard quantity for flexible budget
(4700*4) =18800
pounds
Actual quantity used
(4700*3.70) = 17390
pounds