Actual labor rate Costs Actual materials price Standard labor rate Standard materials price $14 per hour $280 $13.50 $283 Quantities Actual hours incurred and used per ton per hour per ton Actual quantity of materials purchased and used 4,900 hours 1.900 tons
Actual labor rate Costs Actual materials price Standard labor rate Standard materials price $14 per hour $280 $13.50 $283 Quantities Actual hours incurred and used per ton per hour per ton Actual quantity of materials purchased and used 4,900 hours 1.900 tons
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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:(a)
Compute the total, price, and quantity variances for materials and labor.
Total materials variance
Materials price variance
Materials quantity
variance
Total labor variance
Labor price variance
Labor quantity variance
$
LA
$
LA
$
$
$
$
Transcribed Image Text:The following direct materials and direct labor data pertain to the operations of Wildhorse Company for
the month of August.
Actual labor rate
Costs
Actual materials price
Standard labor rate
Standard materials price
Standard hours used
$14
$280
$13.50
$283
Quantities
Actual hours incurred and used
Actual quantity of materials purchased and used
per hour
per ton
per hour
per ton
Standard quantity of materials used
4,900 hours
1,900 tons
4,950 hours
1,885 tons
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