Maple Leaf Production manufactures truck tires. The following information is ava
ID: 2586443 • Letter: M
Question
Maple Leaf Production manufactures truck tires. The following information is available for the last operating period.
Monthly budget $1,380,000
Required:
a. Prepare a cost variance analysis for each of the variable costs for Maple Leaf Productions. (Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option.)
b. Prepare a fixed overhead cost variance analysis. (Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option.)
Direct materials: 4 pounds at $3.00 $ 12.00 Direct labor: 0.55 hours at $19.00 10.45 Variable production overhead: 0.23 machine-hours at $15 per hour 3.45 Total variable costs $ 25.90Explanation / Answer
a. Direct material:
Direct labor:
Variable overhead:
b. Fixed overhead:
c. Jouranl:
Actual output a 90000 Standard units per unit of output b 4 Standard units of material required for actual output c=a*b 360000 Standard quantity Standard rate Standard cost Actual quantity Actual rate Actual cost SQ SP SC AQ AP AC 3,60,000.00 3.00 10,80,000.00 3,85,000.00 1.8 6,93,000.00 Total material cost/spending variance SQ*SP - AQ*AP 1080000-693000 387000 387000 F Material price variance AQ*(SP-AP) 385000*(3-1.8) 462000 462000 F Material usage/quantity variance SP*(SQ-AQ) 3*(360000-385000) -75000 75000 U