Chapter 9: Flex Budgeting and Variance Analysis Part 1 Glaab Inc. has provided the following data concerning one of the products in its standard cost system. Variable manufacturing overhead is applied to products on the basis of direct labor-hours. Inputs Direct materials Direct labor Variable manufacturing overhead Actual output Raw materials purchased and used Actual cost of raw materials purchased The company has reported the following actual results for the product for August: Actual direct labor-hours Actual direct labor cost. Standard Quantity or Hours per Unit of Output Actual variable overhead cost 8.6 kilos 0.40 hours 0.40 hours 8,400 76,900 $469,090 3,320 $35,524 $17,928 Units kilos Hours Required: Compute and interpret the materials price variance for August. Compute and interpret the materials quantity variance for August. Compute and interpret the labor rate variance for August. Compute and interpret the labor efficiency variance for August. Compute and interpret the variable overhead rate variance for August. Compute and interpret the variable overhead efficiency variance for August. Standard Price or Rate $6.00 per kilo $11 per hour. $5 per hour
Chapter 9: Flex Budgeting and Variance Analysis Part 1 Glaab Inc. has provided the following data concerning one of the products in its standard cost system. Variable manufacturing overhead is applied to products on the basis of direct labor-hours. Inputs Direct materials Direct labor Variable manufacturing overhead Actual output Raw materials purchased and used Actual cost of raw materials purchased The company has reported the following actual results for the product for August: Actual direct labor-hours Actual direct labor cost. Standard Quantity or Hours per Unit of Output Actual variable overhead cost 8.6 kilos 0.40 hours 0.40 hours 8,400 76,900 $469,090 3,320 $35,524 $17,928 Units kilos Hours Required: Compute and interpret the materials price variance for August. Compute and interpret the materials quantity variance for August. Compute and interpret the labor rate variance for August. Compute and interpret the labor efficiency variance for August. Compute and interpret the variable overhead rate variance for August. Compute and interpret the variable overhead efficiency variance for August. Standard Price or Rate $6.00 per kilo $11 per hour. $5 per hour
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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Transcribed Image Text:Chapter 9: Flex Budgeting and Variance Analysis Part 1
Glaab Inc. has provided the following data concerning one of the products in its standard cost system. Variable manufacturing.
overhead is applied to products on the basis of direct labor-hours.
Inputs
Direct materials
Direct labor
Variable manufacturing overhead
Actual output
Raw materials purchased and used
Actual cost of raw materials purchased
The company has reported the following actual results for the product for August:
Actual direct labor-hours
Actual direct labor cost
Standard Quantity or Hours per Unit
of Output
Actual variable overhead cost
8.6 kilos
0.40 hours
0.40 hours
8,400
76,900
$469,090
3,320
$35,524
$17,928
Units
kilos
Hours
Required:
Compute and interpret the materials price variance for August.
Compute and interpret the materials quantity variance for August.
Compute and interpret the labor rate variance for August.
Compute and interpret the labor efficiency variance for August.
Compute and interpret the variable overhead rate variance for August.
Compute and interpret the variable overhead efficiency variance for August.
Standard Price
or Rate
$6.00 per kilo
$11 per hour
$5 per hour
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