During March 2022, Vaughn Tool & Die Company worked on four jobs. A review of direct labor costs reveals the following summary data. Actual Standard Job Number Hours Costs Hours Costs Total Variance A257 220 $5,500 226 $5,650 $150 F A258 470 13,160 450 11,250 1,910 U A259 320 8,320 318 7,950 370 U A260 100 2,400 92 2,300 100 U Total variance $2,230 U Analysis reveals that Job A257 was a repeat job. Job A258 was a rush order that required overtime work at premium rates of pay. Job A259 required a more experienced replacement worker on one shift. Work on Job A260 was done for one day by a new trainee when a regular worker was absent. Prepare a report for the factory supervisor on direct labor cost variances for March.
During March 2022, Vaughn Tool & Die Company worked on four jobs. A review of direct labor costs reveals the following summary data. Actual Standard Job Number Hours Costs Hours Costs Total Variance A257 220 $5,500 226 $5,650 $150 F A258 470 13,160 450 11,250 1,910 U A259 320 8,320 318 7,950 370 U A260 100 2,400 92 2,300 100 U Total variance $2,230 U Analysis reveals that Job A257 was a repeat job. Job A258 was a rush order that required overtime work at premium rates of pay. Job A259 required a more experienced replacement worker on one shift. Work on Job A260 was done for one day by a new trainee when a regular worker was absent. Prepare a report for the factory supervisor on direct labor cost variances for March.
Chapter1: Financial Statements And Business Decisions
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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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During March 2022, Vaughn Tool & Die Company worked on four jobs. A review of direct labor costs reveals the following summary data.
Analysis reveals that Job A257 was a repeat job. Job A258 was a rush order that required overtime work at premium rates of pay. Job A259 required a more experienced replacement worker on one shift. Work on Job A260 was done for one day by a new trainee when a regular worker was absent.
Prepare a report for the factory supervisor on direct labor cost variances for March.
|
Actual
|
Standard
|
||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
|
Job Number
|
Hours
|
Costs
|
Hours
|
Costs
|
Total Variance
|
||||||
|
A257
|
220 | $5,500 | 226 | $5,650 | $150 | F | |||||
|
A258
|
470 | 13,160 | 450 | 11,250 | 1,910 | U | |||||
|
A259
|
320 | 8,320 | 318 | 7,950 | 370 | U | |||||
|
A260
|
100 | 2,400 | 92 | 2,300 | 100 | U | |||||
|
Total variance
|
$2,230 | U |
Analysis reveals that Job A257 was a repeat job. Job A258 was a rush order that required overtime work at premium rates of pay. Job A259 required a more experienced replacement worker on one shift. Work on Job A260 was done for one day by a new trainee when a regular worker was absent.
Prepare a report for the factory supervisor on direct labor cost variances for March.
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