2 Dresco, Incorporated is analyzing its most current results against the budget.34Here is the standard cost information:5678 Direct Labor9 Variable Overhead1011 Planned production (units)1213 Actual cost information is below:1415 Units ProducedDirect MaterialsחרStandard Costper DirectMaterial/Hour$7.50$19.00$6.5010,0009,50027,500$181,000StandardQuantity/Hours Standard Cost perper UnitUnit18,500$406,000$115,000$325,0002.52216 Materials Purchased and Used17 Cost of Direct Materials18 Direct Labor Hours19 Direct Labor Cost20 Variable Overhead Cost21 Fixed Overhead Cost2223 Required:24Calculate 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.2728 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 Actual x ActualAP$2.50AQ27,500Actual x ActualARAH18,500Actual x Actual68,750AH27,500ARDirect Materials VariancesActual x StandardAQ27,500$25,250AH18,500Direct Labor VariancesActual x Standard$3,500SPAH18,500$7.500,250Variable Overhead VariancesActual x StandardSR$19.00SR$6.50 ✔Standard x StandardSQSP$7.509,500$0,250Standard x StandardSHSR$19.00Standard x StandardSHSR$6.50

Variance analysis is a systematic approach used by organizations to compare actual financial results…

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.

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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