Actual labor rate Actual materials price Standard labor rate Standard materials price Quantities Actual hours incurred and used Actual quantity of materials purchased and used Standard hours used Standard quantity of materials used $13 per hour $270 per ton $12.50 per hour $272 per ton 3,700 hours 1,100 tons 3,740 hours 1,075 tons
Actual labor rate Actual materials price Standard labor rate Standard materials price Quantities Actual hours incurred and used Actual quantity of materials purchased and used Standard hours used Standard quantity of materials used $13 per hour $270 per ton $12.50 per hour $272 per ton 3,700 hours 1,100 tons 3,740 hours 1,075 tons
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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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Transcribed Image Text:Actual labor rate
Actual materials price
Standard labor rate
Standard materials price
Actual hours incurred and used
Actual quantity of materials purchased and used
Standard hours used
Standard quantity of materials used
Total materials variance
Materials price variance
Materials quantity variance
(a)
Compute the total, price, and quantity variances for materials and labor.
Total labor variance.
Labor price variance
Labor quantity variance
$
$
$
$
Costs
$
Quantities
$
$13 per hour
$270 per ton
$12.50 per hour
$272 per ton
3,700 hours
1,100 tons
3,740 hours
1,075 tons
+
#
+
#
#
#
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