2 Dresco, Incorporated is analyzing its most current results against the budget. 3 4 Here is the standard cost information: 7 Direct Materials 8 Direct Labor 9 Variable Overhead 10 11 Planned production (units) 12 13 Actual cost information is below: 14 15 Units Produced 16 Materials Purchased and Used 17 Cost of Direct Materials 18 Direct Labor Hours 19 Direct Labor Cost 20 Variable Overhead Cost 21 Fixed Overhead Cost 22 Standard Cost per Direct Material/Hour $7.50 $19.00 $6.50 10,000 9,500 27,500 $181,000 18,500 $406,000 $115,000 $325,000 Standard Quantity/Hours Standard Cost per per Unit 2.5 2 2 23 Required: 24 Calculate the Materials Price, Quantity, and Spending Variance. Unit $18.75 $38.00 $13.00 25 Calculate the Direct Labor Rate, Efficiency, and Spending Variance. 26 Calculate the Variable Overhead Rate, Efficiency, and Spending Variance. 27 28 Hint: Use the ABS() function to calculate amounts and use an IF() condition to determine the favorability of the variances.
2 Dresco, Incorporated is analyzing its most current results against the budget. 3 4 Here is the standard cost information: 7 Direct Materials 8 Direct Labor 9 Variable Overhead 10 11 Planned production (units) 12 13 Actual cost information is below: 14 15 Units Produced 16 Materials Purchased and Used 17 Cost of Direct Materials 18 Direct Labor Hours 19 Direct Labor Cost 20 Variable Overhead Cost 21 Fixed Overhead Cost 22 Standard Cost per Direct Material/Hour $7.50 $19.00 $6.50 10,000 9,500 27,500 $181,000 18,500 $406,000 $115,000 $325,000 Standard Quantity/Hours Standard Cost per per Unit 2.5 2 2 23 Required: 24 Calculate the Materials Price, Quantity, and Spending Variance. Unit $18.75 $38.00 $13.00 25 Calculate the Direct Labor Rate, Efficiency, and Spending Variance. 26 Calculate the Variable Overhead Rate, Efficiency, and Spending Variance. 27 28 Hint: Use the ABS() function to calculate amounts and use an IF() condition to determine the favorability of the variances.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Question
Transcribed Image Text:2 Dresco, Incorporated is analyzing its most current results against the budget.
3
4
Here is the standard cost information:
5
6
7
8 Direct Labor
9 Variable Overhead
10
11 Planned production (units)
12
13 Actual cost information is below:
14
15 Units Produced
Direct Materials
חר
Standard Cost
per Direct
Material/Hour
$7.50
$19.00
$6.50
10,000
9,500
27,500
$181,000
Standard
Quantity/Hours Standard Cost per
per Unit
Unit
18,500
$406,000
$115,000
$325,000
2.5
2
2
16 Materials Purchased and Used
17 Cost of Direct Materials
18 Direct Labor Hours
19 Direct Labor Cost
20 Variable Overhead Cost
21 Fixed Overhead Cost
22
23 Required:
24
Calculate the Materials Price, Quantity, and Spending Variance.
25 Calculate the Direct Labor Rate, Efficiency, and Spending Variance.
26 Calculate the Variable Overhead Rate, Efficiency, and Spending Variance.
27
28 Hint: Use the ABS() function to calculate amounts and use an IF() condition to determine the favorability of the variances.
$18.75
$38.00
$13.00
Transcribed Image Text:Actual x Actual
AP
$2.50
AQ
27,500
Actual x Actual
AR
AH
18,500
Actual x Actual
68,750
AH
27,500
AR
Direct Materials Variances
Actual x Standard
AQ
27,500
$25,250
AH
18,500
Direct Labor Variances
Actual x Standard
$3,500
SP
AH
18,500
$7.50
0,250
Variable Overhead Variances
Actual x Standard
SR
$19.00
SR
$6.50 ✔
Standard x Standard
SQ
SP
$7.50
9,500
$0,250
Standard x Standard
SH
SR
$19.00
Standard x Standard
SH
SR
$6.50
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