Jeremy has been asked by his manager to begin drafting a report on last year’s sales figures. When he’s midway through the repor
1 answer:
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Answer:
a) 500F and 3,000U
the company use a cheaper material thus, favorable price variance.
But this material had lower quality thus, negative quantity variance
b) 4,000U 2,100U
There was overtime thus, making labor rate higher and productivity as the shift are longer, decrease.
It could also be a combination between wrong directives from the supervisor or defective equipment
Explanation:
DIRECT MATERIALS VARIANCES
std cost $ 1.50
actual cost $ 1.48
quantity 25,000 (amount purchased)
difference $0.02
price variance $500.00
std quantity 18000 (3,000 toys produced x 6 per toy)
actual quantity 20000 (25,000 - 5,000 ending inventory)
std cost $1.50
difference -2000.00
quantity variance $(3,000.00)
DIRECT LABOR VARIANCES
std rate $21.00
actual rate $22.00 (88,000 labor cost / 4,000 direct labor hours)
actual hours 4,000
difference $(1.00)
rate variance $(4,000.00)
std hours 3900.00 (3,000 toys x 1.3 hours per toy)
actual hours 4000.00
std rate $21.00
difference -100.00
efficiency variance $(2,100.00)