### Variance Analysis for April#### Standard Information- **Standard variable-overhead rate:** $6.00 per direct-labor hour- **Standard quantity of direct labor:** 2 hours per unit of output- **Budgeted fixed overhead:** $100,000- **Budgeted output:** 25,000 units#### Actual Results for April- **Actual output:** 20,000 units- **Actual variable overhead:** $320,000- **Actual fixed overhead:** $95,000- **Actual direct labor:** 48,000 hours#### Required AnalysisUse the variance formulas to compute the following variances. Indicate the effect of each variance by selecting "Favorable" or "Unfavorable". Select "None" and enter "0" for no effect (i.e., zero variance).1. Variable-overhead spending variance2. Variable-overhead efficiency variance3. Fixed-overhead budget variance4. Fixed-overhead volume variance### Understanding Variance Analysis**Variance analysis** involves the investigation of the difference between actual and budgeted or standard costs. This process helps in understanding and controlling costs.- **Spending Variance:** Shows how an actual cost differs from the budgeted expectation.- **Efficiency Variance:** This refers to the difference caused by using a different amount of resources than anticipated.- **Budget Variance:** The difference between budgeted and actual fixed overhead.- **Volume Variance:** Arises when there is a difference in the expected and actual volume of production.By performing this analysis, companies can make informed decisions to control costs and improve efficiency.

Variances are computed to show the variations in the planned overheads and the actual overheads…

Answered: $6.00 per direct-labor hour 2 hours per…

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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Tippi Company produces lamps that require 2.25 standard hours per unit at a standard hourly rate of $15.00 per hour. Production of 7,700 units required 17,550 hours at an hourly rate of $15.20 per hour. What is the direct labor (a) rate variance, (b) time variance, and (c) total cost variance? Enter favorable variances as negative numbers. Favorable or unfavorable a. Direct labor rate variance $fill in the blank 1 b. Direct labor time variance $fill in the blank 3 c. Total direct labor cost variance $fill in the blank 5
$6.00 per hour. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Variance Amount Favorable/Unfavorable Controllable variance Volume variance Total factory overhead cost variance %24 %24 %24
Direct Labor Variances The following data relate to labor cost for production of 4,800 cellular telephones: Actual: 3,230 hrs. at $16.30 Standard: 3,180 hrs. at $16.60 a. 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. Rate variance Time variance $1 Total direct labor cost variance $ b. The employees may have been less-experienced or poorly trained, thereby resulting in a labor rate than planned. The lower level of experience or training may have resulted in efficient performance. Thus, the actual time required was than standard.
Venneman Company produces a product that requires 2 standard hours per unit at a standard hourly rate of $15.00 per hour. If 4,300 units required 8,900 hours at an hourly rate of $14.70 per hour, what is the direct labor (a) rate variance, (b) time variance, and (c) 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. a. Direct labor rate variance $fill in the blank 1 b. Direct labor time variance $fill in the blank 3 c. Total direct labor cost variance $fill in the blank 5
A company has budgeted variable costs of $1,500,000 and actual variable costs are $1,425,000. This results in a(n) A favorable variance of $75,000 B unfavorable variance of $75,000 no variance
Please compute controllable variance and volume variance.
Susan Corporation started the year expecting to produce and sell 117,000 units of its super-insulating coffee mugs, but it ended the year having produced and sold even more than that-129,000 units. Needless to say, owners Eli and his sister Anna were thrilled to have exceeded sales goals for the year. By the end of the third quarter, results looked promising. They were even more excited to see the final year-end financial statements and share the great news with their crew. The actual results, along with the original master budget for the year, are as follows. Sales Variable costs: DM DL Variable-MOH Variable SG&A Contribution margin Fixed costs: Fixed-MOH Fixed SG&A Operating income Actual Income $2,560,650 389,064 621.264 268,320 122,550 1,159,452 442,728 436,500 $280,224 Flexible Budget Master Budget $2,357,550 351,000 561,600 210,600 111,150 1,123,200 421,200 409,000 $293,000 In addition to seeing total actual results, the owners would like a more thorough analysis of many of these…
Direct Labor Variances The following data relate to labor cost for production of 6,800 cellular telephones: Actual: 4,610 hrs. at $13.6 Standard: 4,540 hrs. at $13.9 a. 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. Rate variance $fill in the blank 1 Time variance $fill in the blank 3 Total direct labor cost variance $fill in the blank 5 b. The employees may have been less-experienced or poorly trained, thereby resulting in a labor rate than planned. The lower level of experience or training may have resulted in efficient performance. Thus, the actual time required was than standard.
The management of Cleancut Lawnmowers has calculated the following variances: Direct materials cost variance Direct materials efficiency variance Direct labor cost variance Direct labor efficiency variance Variable overhead cost variance Variable overhead efficiency variance Fixed overhead cost variance $10,000 U 37,000 F 15,000 F 14,000 U 3,000 F 6,500 F 3,000 F When determining the total product cost flexible budget variance, what is the total manufacturing overhead variance of the company? OA. $3,000 F OB. $12,500 F OC. $6,500 F OD. $9,500 F
Alvarado Company produces a product that requires 2 standard direct labor hours per unit at a standard hourly rate of $18.00 per hour. If 5,300 units used 10,900 hours at an hourly rate of $17.28 per hour, what is the direct labor (a) rate variance, (b) time variance, and (c) cost variance? Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Line Item Description Amount Variance a. Direct labor rate variance $fill in the blank 1 b. Direct labor time variance $fill in the blank 3 c. Direct labor cost variance $fill in the blank 5
The management of Earth Barber Lawnmowers has calculated the following variances: Direct materials cost variance $10,000 U Direct materials efficiency variance 35,000 F Direct labor cost variance 16,000 F Direct labor efficiency variance 12,000 U Variable overhead cost variance 3000 F Variable overhead efficiency variance 6500 F Fixed overhead cost variance 4000 F Fixed overhead volume variance 2,500 F When determining the total product cost flexible budget variance, what is the total fixed overhead variance of the company? Group of answer choices $10,500 F $6500 F $5500 F $4000 F
Oriole Company's actual results reveal that it was profitable in the sale of its star product: a high-end spot-cleaning vacuum for upholstery. But it was not nearly as profitable as management had hoped. Oriole's actual income statement and master budget income statement are as follows. In order to keep the focus on product costs, SG&A costs were omitted. Units sold Revenues Variable costs DM DL Variable-MOH Contribution margin Fixed-MOH Operating income DM DL Input Variable-MOH Actual Results Fixed-MOH 10,000 $1,670,000 560,500 216,000 Here are the company's standard cost cards for each product cost. 130,500 763,000 306,000 $457,000 Quantity Standards 3.0 yards 1.6 hours 1.6 hours. Flexible Budget 1.6 hours Price Standards $18.00 per yard $11.00 per hour $7.50 per hour $15.50 per hour Master Budget 12,000 $2,076,000 648,000 211,200 144,000 1,072,800 297,600 $775,200 Standard Cost per Unit $54.00 $17.60 $12.00 $24.80

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