Answer:
a. The materials price variance for September is $17,390 Unfav
b. The materials quantity variance for September is 81 Unfav
c. The labor rate variance for September is 6,102 Unfav
d. The labor efficiency variance for September is 107,954 Fav
e. The variable overhead rate variance for September is $6,586 Fav
f. The variable overhead efficiency variance for September is 2,940 Fav
Explanation:
a. According to the given data we have the following:
Std material qty for actual output= (10700*8.50)= 90,950
Std material price per liter= $8.1
Actualq ty purchased= 93,100
Actual qty used =90,960
Actual price= (771,500/93,100)=$8.286788
Therefore, Material price variance= Actual qty prucased (Std price - Actual price)
Material price variance= 931,00 ($8.10 -$8.29) = $ 17,390 Unfav
b. To calculate the materials quantity variance for September we would have to use the following formula:
Material qty variance= Std price (Std quantity-Actual quantity)
Material qty variance= $8.10(90950-90960)= 81 Unfav
c. To calculate the labor rate variance for September we would have to use the following formula:
Labour rate variance= Actual hours (Std rate-Actual rate)
Std labour hours allowed= (10700*0.60)= 6420 hours
Std rate per hour= $ 25.70 per hour
Actual labour hours= 6000 hour
Actual rate per hour=(160302/6000)=26.717
Therefore, Labour rate variance= 6000 (25.70 -26.717) = 6,102 Unfav
d. To calculate the lthe labor efficiency variance for September we would have to use the following formula:
Labour Efficiency variance= Std rate (Std hourrs-Actual hours)
Labour Efficiency variance=25.70 (6420 -6000) = 107,954 Fav
e. To calculate the variable overhead rate variance for September we would have to use the following formula:
Variable Oh rate variance= Actual hours (Std OH rate-Actual OH rate)
Std variable OH rate per hour: 7 pr hor
Actuall variable OH rate per hour (35414/6000): 5.902 Per hour
Therefore, Variable Oh rate variance= 6000 ( 7.00 -5.902) = $ 6,586 Fav
f. To calculate the variable overhead efficiency variance for September we would have to use the following formula:
Variable OH efficiency variance= Std OH rate (Std hours-Actual hours)
Variable OH efficiency variance= 7.00 (6420 - 6000) = 2,940 Fav
