Problem 8-23A Computing materials, labor, and cost variances The following data
ID: 2574397 • Letter: P
Question
Problem 8-23A Computing materials, labor, and cost variances The following data were drawn from the records of Quentin Corporation LO 8-5, 8-6 CHECK FIGURES d. Labor price variance: $11,592 F q. Fixed cost volume variance: 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 6,000 units 3.1 pounds @ $3.00 per pound 2 hours@ $8.00 per hour $56,400 6,300 units 2.7 pounds $4.00 per pound 2.3 hours @ $7.20 per hour $45,000 $2,820 F Required a. Prepare a materials variance information table showing the standard price, the actual price, the b. Calculate the materials price and usage variances. Indicate whether the variances are favorable (F) c. Prepare a labor variance information table showing the standard price, the actual price, the stan d. Calculate the labor price and usage variances. Indicate whether the variances are favorable (F) or e. Calculate the predetermined overhead rate, assuming that Quentin uses the number of units as the f. Calculate the fixed cost spending variance. Indicate whether the variance is favorable (F) or unfa- g. Calculate the fixed cost volume variance. Indicate whether the variance is favorable (F) or unfa- standard quantity, and the actual quantity or unfavorable (U) dard hours, and the actual hours unfavorable (U) allocation base vorable (U) vorable (U)Explanation / Answer
a &b.
c&d.
e.
f& g.
Actual output 6300 Standard units per unit of output 3.1 Standard fertilisers for total clients 19530 Type 1 Standard quantity Standard rate Standard cost Actual quantity Actual rate Actual cost SQ SP SC AQ AP AC 19,530.00 3.00 58,590.00 17,010.00 4 68,040.00 [2.7*6300] Total material cost/spending variance AQ*AP - SQ*SP 58590-68040 -9450 9450 U Material price variance AQ*(SP-AP) 17010*(3-4) -17010 17010 U Material quantity variance SP*(SQ-AQ) 3*(19530-17010) 7560 7560 F