McEwan Intranet Stud x Assignment 7 (Ch 10) Sta XMy Grades-MGMT-122 x CONot secu
ID: 2546311 • Letter: M
Question
McEwan Intranet Stud x Assignment 7 (Ch 10) Sta XMy Grades-MGMT-122 x CONot secure | ezto.mheducation.com/hm.tpx Apps https://www.macewa Clarissa McWhirter, vice-president of Cyprus Company, was pleased to see a small variance on the income statement after the trouble the company had been having in controlling manufacturing costs. She noted that the $17,385 overall manufacturing variance reported last period was well below the 3% limit that had been set for variances. The company produces and sells a single product The standard cost card for the product follows: Direct materials, 4 metres at $2.50 per metre Direct labour, 1.5 direct labour-hours at $9.5 per direct labour-hour Variable overhead, 1.5 direct labour hours at $2.6 per direct labour-hour 3.90 Foxed overhead, 1.5 direct labour-hours at $5 per direct labour-hour $10.00 1425 7.50 $35.65 Standard cost per unit The following additional information is available for the year just completed a The company manufactured 20,000 units of product during the year b. A total of 79,050 metres of material was purchased during the year at a cost of $2.70 per metre. All of this material was used to manufacture the 20,000 units. There were no beginning or ending inventories for the year. c. The company worked 31,000 direct labour-hours during the year at a cost of $9.40 per hour d Overhead cost is applied to products on the basis of standard direct labour-hours. Data relating to manufacturing overhead costs follow Denominator activity level (direct labour-hours) Budgeted fixed overhead costs (from the flexible budget) Actual fioxed overhead costs Actual variable overhead costs 29,000 $ 145,000 $ 143.300 82.250 Required: 1. Compute the direct materials price and quantity variances for the year (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e.. zero variance).) hpExplanation / Answer
Material price variance AP (a) SP (b) Variance (c=b-a) AQ (d) Total variance (e=c*d) F/U Material price variance = (AP-SP)*AQ AP = Actual price per unit = $2.70 SP = Standard price per unit = $2.5 AQ = Actual quantity consumed= 79050 F= Favourable U = Unfavourable Material price variance AP (a) SP (b) Variance (c=b-a) AQ (d) Total variance (e=c*d) F/U 2.7 2.5 -0.2 79050 -15810 U Material quantity variance AQ (a) SQ (b) Variance (c=b-a) SP (d) Total variance (e=c*d) F/U Material quantity variance = (AQ-SQ)*SP AQ = Actual quantity consumed= 79050 SQ = Standard quantity = 4*20000 =80000 SP = Standard price per unit = $2.5 F= Favourable U = Unfavourable Material quantity variance AQ (a) SQ (b) Variance (c=b-a) SP (d) Total variance (e=c*d) F/U 79050 80000 950 2.5 2375 F