21 Standard Quantity Allowed for the Actual Output, at Standard Price 22 Actual Quantity of Input, at Standard Price 23 Actual Quantity of Input, at Actual Price 24 Direct materials variances: 25 Materials quantity variance 26 Materials price variance 27 Materials spending variance 28 29 Exhibit 10-6: Standard Cost Variance Analysis-Direct Labor 30 Standard Hours Allowed for the Actual Output, at Standard Rate 31 Actual Hours of Input, at Standard Rate 32 Actual Hours of Input, at Actual Rate 33 Direct labor variances: 34 Labor efficiency variance 35 Labor rate variance 43 Variable overhead efficiency variance 44 Variable overhead rate variance 45 Variable overhead spending variance 46 47 ? pounds 5,855 pounds 5,855 pounds 36 Labor spending variance 37 38 Exhibit 10-8: Standard Cost Variance Analysis-Variable Manufacturing Overhead 39 Standard Hours Allowed for the Actual Output, at Standard Rate 40 Actual Hours of Input, at Standard Rate 41 Actual Hours of Input, at Actual Rate 42 Variable overhead variances: 48 49 F ? U ? F ? hours * 1,125 hours 1,125 hours ? F ? U ? F ? hours x 1,125 hours * 1,125 hours ? F ? U ? $4.00 per pound $4.00 per pound $4.20 per pound $22.00 per hour = $22.00 per hour. $22.10 per hour $6.00 per hour $6.00 per hour ? per hour ? $23,420 $24,591 ? $24,750 $24,863 ? $6,750 ?
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.
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please solve for these questions:
b-1. What is the labor efficiency variance?
b-2. What is the labor rate variance?
c-1. What is the variable
c-2. What is the variable overhead rate variance?