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Prepare the material usage variance Explain why (sometimes) a favorable usage variance may cause issues with the product. 2A 2B

Prepare the material usage variance Explain why (sometimes) a favorable usage variance may cause issues with the product. 2A 2B

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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The Outdoor Vest company has provided the following information about their product Budget or standard information Male Female Standard material used for each vest Liner 9.4 7.0 yards Filler 5.2 4.0 pounds Standard direct labor hours for each vest 0.5 0.4 hours Estimated planned production 6,200 5,000 Units Standard labor rate $14.00 per hour Standard material cost Liner $8.00 per yard Filler $2.00 per pound Actual information Male Female Actual units produced 5,800 4,400 Actual labor hours worked 2,800 1,825 Actual labor rate $14.50 $14.70 Actual material purchased and used Liner 85,100 yards Filler 48,000 pounds Actual material cost per item Liner $8.20 Per yard Filler $1.90 Per pound 2A Prepare the material usage variance 2B Explain why (sometimes) a favorable usage variance may cause issues with the product.
Transcribed Image Text:The Outdoor Vest company has provided the following information about their product Budget or standard information Male Female Standard material used for each vest Liner 9.4 7.0 yards Filler 5.2 4.0 pounds Standard direct labor hours for each vest 0.5 0.4 hours Estimated planned production 6,200 5,000 Units Standard labor rate $14.00 per hour Standard material cost Liner $8.00 per yard Filler $2.00 per pound Actual information Male Female Actual units produced 5,800 4,400 Actual labor hours worked 2,800 1,825 Actual labor rate $14.50 $14.70 Actual material purchased and used Liner 85,100 yards Filler 48,000 pounds Actual material cost per item Liner $8.20 Per yard Filler $1.90 Per pound 2A Prepare the material usage variance 2B Explain why (sometimes) a favorable usage variance may cause issues with the product.
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