Prepare the material variances and labor variances as indicated below. 1. A comp
ID: 2591277 • Letter: P
Question
Prepare the material variances and labor variances as indicated below. 1. A company manufactures lariats and requires 2 raw materials. Standard costs are: Materials Quantity Price per Stand/lariat Raw Hide 60 ft 1.25/ft 75.00 Horse Hair 30 lbs 1.25 per lb 37.50 Total 112.50 Actual costs are: Materials Quantity Price per Actual/lariat Raw Hide 70 ft 1.30/ft 91.00 Horse Hair 25 lbs 1.25 per lb 31.25 Total 122.25 Number of lariats produced 30 1. What is the total materials variance? 2. Draw a grid to show variances. 3. Show work for materials price variance for each material. 4. Show work for materials quantity variance for each material. 2. In making the above lariats, the following labor data is available: Hrs/unit Rate/hour Budgeted (standard) 3 $9.00 Actual 2 $10.50 1. What is the total labor variance? 2. Draw a grid to show variances. 3. What is the labor rate variance? 4. What is the labor efficiency variance? Prepare the material variances and labor variances as indicated below. 1. A company manufactures lariats and requires 2 raw materials. Standard costs are: Materials Quantity Price per Stand/lariat Raw Hide 60 ft 1.25/ft 75.00 Horse Hair 30 lbs 1.25 per lb 37.50 Total 112.50 Actual costs are: Materials Quantity Price per Actual/lariat Raw Hide 70 ft 1.30/ft 91.00 Horse Hair 25 lbs 1.25 per lb 31.25 Total 122.25 Number of lariats produced 30 1. What is the total materials variance? 2. Draw a grid to show variances. 3. Show work for materials price variance for each material. 4. Show work for materials quantity variance for each material. 2. In making the above lariats, the following labor data is available: Hrs/unit Rate/hour Budgeted (standard) 3 $9.00 Actual 2 $10.50 1. What is the total labor variance? 2. Draw a grid to show variances. 3. What is the labor rate variance? 4. What is the labor efficiency variance?Explanation / Answer
Total material variance = 480 U +187.50 F = 292.50 U material variance (raw hide) AQ AP AQ SP SQ SP 2100 1.3 2100 1.25 1800 1.25 2730 2625 2250 material price variance 105 U material quantity variance 375 U total material variance 480 U material variance (horse hair) AQ AP AQ SP SQ SP 750 1.25 750 1.25 900 1.25 937.5 937.5 1125 material price variance 0 material quantity variance 187.5 F total material variance 187.5 F mateiral price variance = AQ*(SP-AP) raw hide = (30*70)*(1.30-1.25) = 105 U hore hair = (25*30)*(1.25-1.25) = 0 material quantity variance = SP*(AQ-SQ) raw hide = 1.25*((30*70)-(30*60)) = 375 U horse hair = 1.25*((30*25)-(30*30)) = 187.50 F Total labor variance = 180 F laborl variance AH AR AH SR SH SR 60 10.5 60 9 90 9 630 540 810 labor rate variance 90 U labor efficiency variance 270 F total labor variance 180 F labor rate variance = AQ*(AP-SP) = (2*30)*(10.50-9) = 90 U labor efficiency variance = SP*(AQ-SQ) = 9*((30*2)-(30*3)) = 270 F