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Delta Products prepares its budgets on the basis of standard costs. A responsibility report is prepared monthly showing the differences between master budget and actual results. Variances are analyzed and reported separately. There are no materials inventories. The following information relates to the current period: Standard costs (per unit of output) Direct materials, 7 gallons @ $4.00 per gallon $ 28 Direct labor, 5.00 hours @ $39.00 per hour 195 Factory overhead Variable (20% of direct labor cost) 39 Total standard cost per unit $ 262 Actual costs and activities for the month follow: Materials used 16,070 gallons at $1.99 per gallon Output 2,050 units Actual labor costs 5,800 hours at $41.90 per hour Actual variable overhead $ 49,340 Required: Prepare a cost variance analysis for the variable costs. Direct materials:

Delta Products prepares its budgets on the basis of standard costs. A responsibility report is prepared monthly showing the differences between master budget and actual results. Variances are analyzed and reported separately. There are no materials inventories. The following information relates to the current period: Standard costs (per unit of output) Direct materials, 7 gallons @ $4.00 per gallon $ 28 Direct labor, 5.00 hours @ $39.00 per hour 195 Factory overhead Variable (20% of direct labor cost) 39 Total standard cost per unit $ 262 Actual costs and activities for the month follow: Materials used 16,070 gallons at $1.99 per gallon Output 2,050 units Actual labor costs 5,800 hours at $41.90 per hour Actual variable overhead $ 49,340 Required: Prepare a cost variance analysis for the variable costs. Direct materials:

FINANCIAL ACCOUNTING
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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Delta Products prepares its budgets on the basis of standard costs. A responsibility report is prepared monthly showing the differences between master budget and actual results. Variances are analyzed and reported separately. There are no materials inventories. The following information relates to the current period: Standard costs (per unit of output) Direct materials, 7 gallons @ $4.00 per gallon $ 28 Direct labor, 5.00 hours @ $39.00 per hour 195 Factory overhead Variable (20% of direct labor cost) 39 Total standard cost per unit $ 262 Actual costs and activities for the month follow: Materials used 16,070 gallons at $1.99 per gallon Output 2,050 units Actual labor costs 5,800 hours at $41.90 per hour Actual variable overhead $ 49,340 Required: Prepare a cost variance analysis for the variable costs. Direct materials: Price variance Efficiency variance Direct materials cost variance Direct labor: Price variance Efficiency variance Direct labor cost variance Variable overhead: Price variance Efficiency variance. Variable overhead cost variance
Transcribed Image Text:Delta Products prepares its budgets on the basis of standard costs. A responsibility report is prepared monthly showing the differences between master budget and actual results. Variances are analyzed and reported separately. There are no materials inventories. The following information relates to the current period: Standard costs (per unit of output) Direct materials, 7 gallons @ $4.00 per gallon $ 28 Direct labor, 5.00 hours @ $39.00 per hour 195 Factory overhead Variable (20% of direct labor cost) 39 Total standard cost per unit $ 262 Actual costs and activities for the month follow: Materials used 16,070 gallons at $1.99 per gallon Output 2,050 units Actual labor costs 5,800 hours at $41.90 per hour Actual variable overhead $ 49,340 Required: Prepare a cost variance analysis for the variable costs. Direct materials: Price variance Efficiency variance Direct materials cost variance Direct labor: Price variance Efficiency variance Direct labor cost variance Variable overhead: Price variance Efficiency variance. Variable overhead cost variance
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