Assume the following information (the quantity of materials purchased = the quantity used): Actual total cost of direct materials $ 65,560 Direct materials price variance $ 5,960 U Standard quantity of materials allowed per unit 3 pounds Standard price per pound of material $ 4.00 Standard rate per direct labor hour $ 5.00 Actual total direct labor hours 6,500 Direct labor efficiency variance $ 3,500 F Standard number of direct labor hours allowed per unit 2 hours Direct labor spending variance $ 400 U What is the actual number of units produced during the period?
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.
Assume the following information (the quantity of materials purchased = the quantity used):
| Actual total cost of direct materials | $ 65,560 | |
|---|---|---|
| Direct materials price variance | $ 5,960 | U |
| Standard quantity of materials allowed per unit | 3 | pounds |
| Standard price per pound of material | $ 4.00 | |
| Standard rate per direct labor hour | $ 5.00 | |
| Actual total direct labor hours | 6,500 | |
| Direct labor efficiency variance | $ 3,500 | F |
| Standard number of direct labor hours allowed per unit | 2 | hours |
| Direct labor spending variance | $ 400 | U |
What is the actual number of units produced during the period?
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