Answer:
A. Price variance = Actual costs of Actual quantity purchased - standard costs of actual quantity purchased
= 110,000 - 111,000 = $1,000 (fav)
B. Materials quantity variance = (actual unit at standard cost - standard unit at standard cost)
If Actual unit at standard cost = $111,000
And Quantity variance is $11,000 (fav)
Standard units at standard costs price = $111,000 + $11,000 = $122,000
C. Rate variance = (actual hour x actual rate) - (actual hour x standard rate)
= $140,000 - $132,000 = $8,000 (unfav)
Efficiency variance = (actual hours - standard hours ) x standard rate
= (actual hours x standard rate) - (standard hours x standard rate)
If efficiency variance is $7,600(fav)
And actual hour and standard labor rate is $132,000
This implies standard hours at standard rate = $132,000 + $7,600 = $139,600
Efficiency variance = 132,000 - 139,600 = $7,600 (fav)
