Variance ProblemStandard QuantityStandard CostStandard price$1.75 per hr$11.50 per hr$5.00 per hrper unit$7.00$13.80$6.00per unitDirect MaterialsDirect LaborVariable Overhead41.21.2Manufacturing overhead is applied using direct labor hours as the base. During the month of July, XYZcompany had the following information available about production:a. 9,000 units were producedb. 37,000 lbs of raw materials were purchased at a cost of $62,900c. There was no beginning inventory and no ending iInventory of raw materialsd. 10,500 hours of direct labor were used during the month at a cost of $119,175e. Variable overhead cost in July totaled $57,750Compute the following and verify the total variance for each component of product cost:1. Material price variance, Material quantity variance, and Total material variance2. Labor rate variance, Labor efficiency variance, and Total labor variance3. Variable Overhead spending variance, Variable Overhead efficiency variance, and Total VariableOverhead variance

Name: Variance ProblemStandard QuantityStandard CostStandard price$1.75 per
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Description: Variance ProblemStandard QuantityStandard CostStandard price$1.75 per hr$11.50 per hr$5.00 per hrper unit$7.00$13.80$6.00per unitDirect MaterialsDirect LaborVariable Overhead41.21.2Manufacturing overhead is applied using direct labor hours as the ba

working notes AQ means actual quantity AP means actual price SP means standard price SQ means…

Business

Accounting

1. Material price variance, Material quantity variance, and Total material variance 2. Labor rate variance, Labor efficiency variance, and Total labor variance 3. Variable Overhead spending variance, Variable Overhead efficiency variance, and Total Variab. Overhead variance

1. Material price variance, Material quantity variance, and Total material variance 2. Labor rate variance, Labor efficiency variance, and Total labor variance 3. Variable Overhead spending variance, Variable Overhead efficiency variance, and Total Variab. Overhead variance

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Variance Analysis

In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.

Standard Costing

The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.

Topic Video

Question

Variance Problem
Standard Quantity
Standard Cost
Standard price
$1.75 per hr
$11.50 per hr
$5.00 per hr
per unit
$7.00
$13.80
$6.00
per unit
Direct Materials
Direct Labor
Variable Overhead
4
1.2
1.2
Manufacturing overhead is applied using direct labor hours as the base. During the month of July, XYZ
company had the following information available about production:
a. 9,000 units were produced
b. 37,000 lbs of raw materials were purchased at a cost of $62,900
c. There was no beginning inventory and no ending iInventory of raw materials
d. 10,500 hours of direct labor were used during the month at a cost of $119,175
e. Variable overhead cost in July totaled $57,750
Compute the following and verify the total variance for each component of product cost:
1. Material price variance, Material quantity variance, and Total material variance
2. Labor rate variance, Labor efficiency variance, and Total labor variance
3. Variable Overhead spending variance, Variable Overhead efficiency variance, and Total Variable
Overhead variance

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Subject: acounting
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