Variance Analysis Project Use the following data to calculate the variances in p

Question

Variance Analysis Project Use the following data to calculate the variances in problems 1-5. Standard Cost Profile Lab Treatment SU #12 Expected Treatments 1,000 Quantity Quantity Unit Variable Average Average Resource Variable Fixed Cost Cost Fixed Cost Total Cost Labor Supplies $ 25.60 0.80 7.00 0.80 $16.00 $ 12.80 12.80 1.10 7.70 Actual Month Cost Lab Treatment SU #12 Actual Treatments- 1,100 Quantity Total Unit UsedCost Cost Resource Labor 1,600 S 17.00 $27,200 1.00 7500 S34.700 Supplies 7,500 Calculate the following variances: 5. Volume Variance

Explanation / Answer

direct materials variance =

(Actual unit quantity consumed - Budgeted unit quantity consumed) x Budgeted cost per unit

(7500-7000)*7.7

=3850

Labor volume variance shall be calculated as follows:

= (1100*1.6 - 1600) * 25.6

= 4096

Where,
   SH are the standard direct labor hours allowed for actual output
   AH are the actual direct labor hours used
   SR is the standard direct labor rate per hour

DL volume Variance = ( SH AH ) × SR

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