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(a) Complete a variance analysis for DM (both wood and wheels) and DL, determining the price and efficiency variances for each; be sure to specify the amount and sign of each variance. DM- Wood DM- Wheels DL $ $ $ Price Variance $ +A $ $ Efficiency Variance

(a) Complete a variance analysis for DM (both wood and wheels) and DL, determining the price and efficiency variances for each; be sure to specify the amount and sign of each variance. DM- Wood DM- Wheels DL $ $ $ Price Variance $ +A $ $ Efficiency Variance

FINANCIAL ACCOUNTING
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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The company where Michael works produces skateboards locally but sells them globally for $60 each. Michael is one of the production managers in a meeting to discuss preliminary results from the year just ended. Here is the information they had in front of them: Wood Wheels Direct labor Actual results: ● ● (a) DM- Wood DM- Wheels DL $ Standard Quantity per Unit $ 2.00 feet Quantity of wood purchased, 135,500 feet; quantity of wood used, 130,500 feet. Quantity of wheels purchased, 308,160 wheels; quantity of wheels used, 291,160 wheels. Actual cost of the wood, $3.20 per foot. Actual cost of the wheels, $0.55 per wheel. Quantity of DL hours used, 18,560 hours; actual cost of DL hours, $15.80 per hour. Actual units produced, 58,000 skateboards. Complete a variance analysis for DM (both wood and wheels) and DL, determining the price and efficiency variances for each; be sure to specify the amount and sign of each variance. $ 5.00 wheels 0.30 hours Standard Price $3.00 per foot $0.50 per wheel $14.00 per hour Price Variance $ tA $ $ Efficiency Variance
Transcribed Image Text:The company where Michael works produces skateboards locally but sells them globally for $60 each. Michael is one of the production managers in a meeting to discuss preliminary results from the year just ended. Here is the information they had in front of them: Wood Wheels Direct labor Actual results: ● ● (a) DM- Wood DM- Wheels DL $ Standard Quantity per Unit $ 2.00 feet Quantity of wood purchased, 135,500 feet; quantity of wood used, 130,500 feet. Quantity of wheels purchased, 308,160 wheels; quantity of wheels used, 291,160 wheels. Actual cost of the wood, $3.20 per foot. Actual cost of the wheels, $0.55 per wheel. Quantity of DL hours used, 18,560 hours; actual cost of DL hours, $15.80 per hour. Actual units produced, 58,000 skateboards. Complete a variance analysis for DM (both wood and wheels) and DL, determining the price and efficiency variances for each; be sure to specify the amount and sign of each variance. $ 5.00 wheels 0.30 hours Standard Price $3.00 per foot $0.50 per wheel $14.00 per hour Price Variance $ tA $ $ Efficiency Variance
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