Material, Labor, and Variable Overhead Variances The following summarized manufacturing data relate to Thomas Corporation's April operations, during which 2,000 finished units of product were produced. Normal monthly capacity is 1,100 direct labor hours. Standard Units Costs Total Actual Costs Direct material Standard (2 lb. @ $17.00/lb.) $34 Actual (4,200 lb. @ $17.80/lb.) $74,760 Direct labor Standard (0.5 hr. @ $32/hr.) $16 Actual (950 hrs. @ $31/hr.) 29,450 Variable overhead Standard (0.5 hr. @ $14/hr.) $7 Actual - 14,450 Total $57 $118,660 Determine the following variances: Do not use negative signs with any of your answers. Next to each variance answer, select either "F" for Favorable or "U" for Unfavorable. Materials Variances Actual cost: Answer Split cost: Answer Standard cost: Answer Materials price Answer Answer Materials efficiency Answer Answer Labor Variances Actual cost: Answer Split cost: Answer Standard cost: Answer Labor rate Answer Answer Labor efficiency Answer Answer Variable Overhead Variances Actual cost: Answer Split cost: Answer Standard cost: Answer Variable overhead spending Answer Answer Variable overhead efficiency Answer Answer
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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Material, Labor, and Variable
The following summarized manufacturing data relate to Thomas Corporation's April operations, during which 2,000 finished units of product were produced. Normal monthly capacity is 1,100 direct labor hours.
| Total Actual Costs | ||||||
|---|---|---|---|---|---|---|
| Direct material | ||||||
| Standard (2 lb. @ $17.00/lb.) | $34 | |||||
| Actual (4,200 lb. @ $17.80/lb.) | $74,760 | |||||
| Direct labor | ||||||
| Standard (0.5 hr. @ $32/hr.) | $16 | |||||
| Actual (950 hrs. @ $31/hr.) | 29,450 | |||||
| Variable overhead | ||||||
| Standard (0.5 hr. @ $14/hr.) | $7 | |||||
| Actual | - | 14,450 | ||||
| Total | $57 | $118,660 |
Determine the following variances:
Do not use negative signs with any of your answers. Next to each variance answer, select either "F" for Favorable or "U" for Unfavorable.
| Materials Variances | ||
|---|---|---|
| Actual cost: | Answer | |
| Split cost: | Answer | |
| Standard cost: | Answer | |
| Materials price | Answer | Answer |
| Materials efficiency | Answer | Answer |
| Labor Variances | ||
|---|---|---|
| Actual cost: | Answer | |
| Split cost: | Answer | |
| Standard cost: | Answer | |
| Labor rate | Answer | Answer |
| Labor efficiency | Answer | Answer |
| Variable Overhead Variances | ||
|---|---|---|
| Actual cost: | Answer | |
| Split cost: | Answer | |
| Standard cost: | Answer | |
| Variable overhead spending | Answer | Answer |
| Variable overhead efficiency | Answer | Answer |
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