Actual Total Cost of Direct Materials $ 225,000 Standard Total Cost of Direct Materials $ 224,800 Actual Materials Used 30 Standard Materials Used 31 Actual Direct Labor Rate $ 15.50 Standard Labor Rate $ 15.00 Actual Hours Worked 45 Standard Hours Worked 40 Amount Favorable/ Unfavorable Calculate Materials Variances: Materials Price Variance $ ??? ??? Materials Quantity Variance ?? ??? Calculate Labor Variances: Labor Rate Variance $ ?? ?? Labor Efficiency Variance $ ?? ???
Actual Total Cost of Direct Materials $ 225,000 Standard Total Cost of Direct Materials $ 224,800 Actual Materials Used 30 Standard Materials Used 31 Actual Direct Labor Rate $ 15.50 Standard Labor Rate $ 15.00 Actual Hours Worked 45 Standard Hours Worked 40 Amount Favorable/ Unfavorable Calculate Materials Variances: Materials Price Variance $ ??? ??? Materials Quantity Variance ?? ??? Calculate Labor Variances: Labor Rate Variance $ ?? ?? Labor Efficiency Variance $ ?? ???
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
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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| Cookie Business | |||
| Actual Total Cost of Direct Materials | $ 225,000 | ||
| $ 224,800 | |||
| Actual Materials Used | 30 | ||
| Standard Materials Used | 31 | ||
| Actual Direct Labor Rate | $ 15.50 | ||
| Standard Labor Rate | $ 15.00 | ||
| Actual Hours Worked | 45 | ||
| Standard Hours Worked | 40 | ||
| Amount | Favorable/ Unfavorable | ||
| Calculate Materials Variances: | |||
| Materials Price Variance | $ ??? | ??? | |
| Materials Quantity Variance | ?? | ??? | |
| Calculate Labor Variances: | |||
| Labor Rate Variance | $ ?? | ?? | |
| Labor Efficiency Variance | $ ?? | ??? | |
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