(a) Determine the price variance. $fill in the blank 1 (b) Determine the quantity variance. $fill in the blank 3 (c) Determine the cost variance.
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.
Ruby Company produces a chair that requires 3 yards of material per unit. The standard price of one yard of material is $13.90. During the month, 7,400 chairs were manufactured, using 21,800 yards at a cost of $13.21 per yard. Enter favorable variances as negative numbers.
| (a) | Determine the price variance. | $fill in the blank 1 | |
| (b) | Determine the quantity variance. | $fill in the blank 3 | |
| (c) | Determine the cost variance. | $fill in the blank 5 |
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