Answer:
1. Material cost variance $
Standard material cost ($6 x 4,300) 25,800
Less: Actual ,aterial cost 27,900
Material cost variance 2,100(A)
2. Material price variance
= (Standard price - Actual price) x Actual quantity purchased
= ($6 - $6.20) x 4,500 pounds
= $900( A)
Actual price
= Actual material cost/Actual quantity purchased
Actual price
= $27,900/4,500 pounds = $6.20
3. Material usage variance
= (Standard quantity - Actual quantity used) x Standard price
= (1 x 4,300 - 4,500) x $6
= $1,200(A)
4. Labour cost variance: $
Standard labour cost ($18.30 x 4,300) 78,690
Less: Actual labour cost 77,500
Labour cost variance 1,190
5. Labour rate variance
=(Standard rate - Actual rate) x Actual hours worked
= ($12.20 - $12.40) x 6,250 hours
= $1,250(A)
6. Labour efficiency variance
= (Standard hours - actual hours worked) x Standard rate
= (1.50 hours x 4,300 - 6,250) x $12.20
= $2,440(F)
Actual rate = Actual labour cost/Actual hours worked
Actual rate = $77,500/6,250 hours
Actual rate = $12.40
= (SR - AR) x Actual hour worked
7. Total overhead variance $
Standard overhead cost ($24 x 4,300) 103,200
Less: Actual overhead cost(78,430+ 26,670) 105,100
Total overhead variance 1,900
Less: Actual overhead cost
Explanation:
Material cost variance is the difference between standard material cost and actual material cost.
Material price variance is the difference between standard price and actual price multiplied by actual quantity purchased.
Material usage variance is the difference between standard quantity and actual quantity used multiplied by standard price.
Labour cost variance is the difference between standard labour cost and actual labour cost.
Labour rate variance is the difference between standard rate and actual rate multiplied by actual hours worked.
Labour efficiency variance is the difference between standard hours and actual hours worked multiplied by standard rate.
Total overhead variance is the difference between standard total overhead cost and actual total overhead cost.
