**Exercise: Variance Analysis****b.** Determine the direct materials price variance, direct materials quantity variance, and total direct materials cost variance. Round your answers to two decimal places, if necessary. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.- Direct materials price variance: - Value: $ ___ - Variance: Unfavorable ✓- Direct materials quantity variance: - Value: $ ___ - Variance: Favorable ✓- Total direct materials cost variance: - Value: $ ___ - Variance: Unfavorable ✓**c.** Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.- Direct labor rate variance: - Value: $ ___ - Variance: Favorable ✓- Direct labor time variance: - Value: $ ___ - Variance: Unfavorable ✓- Total direct labor cost variance: - Value: $ ___ - Variance: Favorable ✓**Instructions:**The task involves calculating and recording variances for direct materials and direct labor using specified criteria. Each variance type can be favorable or unfavorable, influencing the interpretation of the overall cost performance in a business setting. Favorable variances are marked by negative numbers, indicating cost efficiencies or savings, while unfavorable variances are denoted as positive numbers, representing cost overruns or inefficiencies. **Direct Materials and Direct Labor Variance Analysis****Abbeville Company Overview:**Abbeville Company manufactures faucets in a small manufacturing facility. The faucets are made from brass. Manufacturing has 90 employees, with each employee providing 36 hours of labor per week. The following information pertains to a week of production:- **Standard wage per hour:** $15.00- **Standard labor time per faucet:** 40 minutes- **Standard number of pounds of brass per faucet:** 3 lbs.- **Standard price per pound of brass:** $2.40- **Actual price per pound of brass:** $2.50- **Actual pounds of brass used during the week:** 14,350 lbs.- **Number of faucets produced during the week:** 4,800- **Actual wage per hour:** $14.40- **Actual hours worked for the week:** 3,240 hours**Required:**Determine the **standard cost per unit** for direct materials and direct labor. Costs should be rounded to two decimal places.- **Direct materials standard cost per unit:** $[ ]- **Direct labor standard cost per unit:** $[ ]- **Total standard cost per unit:** $[ ]

b. Determine the direct materials price variance, direct materials quantity variance, and total direct materials cost variance. Round your answers to two decimal places, if necessary. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Direct materials price variance Unfavorable Direct materials quantity variance Favorable Total direct materials cost variance Unfavorable c. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Direct labor rate variance Favorable Direct labor time variance Unfavorable Total direct labor cost variance Favorable

b. Determine the direct materials price variance, direct materials quantity variance, and total direct materials cost variance. Round your answers to two decimal places, if necessary. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Direct materials price variance Unfavorable Direct materials quantity variance Favorable Total direct materials cost variance Unfavorable c. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Direct labor rate variance Favorable Direct labor time variance Unfavorable Total direct labor cost variance Favorable

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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а. Standard Cost per Unit for Direct Materials and Direct Labor b. Direct Materials Price Variance Wrong Direct Materials Quantity Variance Wrong Total Direct Materials Cost Variance Wrong с. Direct Labor Rate Variance Wrong Direct Labor (Time) Efficiency Variance Wrong Total Direct Labor Cost Variance Wrong
Subject: acounting
nee In which department would an investigation of the materials price variance most likely begin?
b. Calculate the profit variance c. Calculate the total revenue variance. d) Calculate the revenue volume variance. e) Calculate the revenue price variance. f) Calculate the total cost variance.
f
The following direct materials and direct labor data pertain to the operations of Sunland Company for the month of August. Costs Actual labor rate Actual materials price Standard labor rate Standard materials price $13 $290 $12.50 per hour per ton per hour $292 per ton Quantities. Actual hours incurred and used Actual quantity of materials purchased and used Standard hours used Standard quantity of materials used. 4,200 hours 1,000 tons 4,290 hours 990 tons
Which of the following is the correct formula for the direct materials quantity variance? O a. (Actual Quantity - Actual Price) - (Standard Quantity Standard Price) O b. (Actual Quantity- Standard Quantity) * Actual Price O c. (Actual Price - Standard Price) × Actual Quantity O d. (Actual Quantity - Standard Quantity) x Standard Price
Should both favorable and unfavorable variances be investigated, or only the unfavorable ones? Explain your response. What if a company found that they had a favorable price variance and an unfavorable quantity variance for direct materials. What might be the cause(s) of this pattern of variances?
List the fixed overhead variances, and briefly describe each.
What is a materials quantity variance? Describe this in your own words. Writing a formula is not a sufficient answer. Provide a real world example that would result in an unfavorable materials quantity variance