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sineoko [7]
3 years ago
14

Please answer my question Picture aboveWhy nobody is answering????​

Mathematics
2 answers:
tia_tia [17]3 years ago
7 0

Answer:

  1. $1502
  2. 300 pounds
  3. labor rate variance: $1.50 per hour (unfavorable); efficiency variance: 0.25 units/hour (favorable)

Step-by-step explanation:

1. The material cost is the cost per pound multiplied by the number of pounds used.

  Planned material cost: (18,500 lb)($2.50 /lb) = $46,250

  Actual material cost: (18,800 lb)($2.54 /lb) = $47,752

  Material cost variance: $47,752 -46,250 = $1,502 . . . (unfavorable)

__

2. The material quantity is ...

  Planned: 18,500 lb

  Actual: 18,800 lb

  Material quantity variance: 18,800 -18,500 = 300 . . . pounds (unfavorable)

__

3. The direct labor rate is the labor cost divided by the labor hours.

  Planned labor rate: $16.50 per hour

  Actual labor rate: $360,000/(20,000 h) = $18.00 per hour

  Labor rate variance: $18.00 -16.50 = $1.50 . . . per hour (unfavorable)

The efficiency is assumed to be measured in units per hour of labor.

  Planned efficiency: (1 unit)/(0.5 h) = 2 units/h

  Actual efficiency: (45,000 units)/(20,000 h) = 2.25 units/h

  Efficiency variance: 2.25 -2.00 = 0.25 . . . units/h (favorable)

_____

<em>Additional comment</em>

Question 1 asks for the price variance, not the cost variance. The price is given in terms of dollars per pound. The variance in price per pound would be $2.54 -2.50 = $0.04 (unfavorable). We assumed the more interesting number is the cost variance, which takes into account the material quantity used.

Efficiency is usually measured in terms of useful output for a given input. For example, auto efficiency is measured in the US in terms of miles per gallon. Hence units per hour would be an appropriate efficiency measure. (Higher is better.)

In some instances, efficiency is measured in terms of the input required to obtain a given output. For example, auto efficiency is measured in metric countries in terms of liters per 100 kilometers. In that sense, the efficiency measure would be hours per unit. (Lower is better.)

dybincka [34]3 years ago
4 0

Answer:

Step-by-step explanation:

1. & 2. & 3.  Direct Material Quantity Variance = (Planned Quantity - ActualQuantity) * Planned Price

Planned Quantity = 18,500 pounds

Actual Quantity = 18,800 pounds

Planned Price = $2.50

Direct Material Quantity Variance = (18,500-18,800)*$2.50

= - $750

Thus, the Direct Material Quantity Variance is $750 Unfavorable(As the actual quantity used is more than planned)

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