Product A Cost Component Direct materials Direct labor Manufacturing overhead . . BRAMBLECOMPANY Standard Cost Card . Standard Quantity x 4 pounds 3 hours 3 hours Standard Price $3 8 Standard Cost $12 24 The company expected to produce 30,300 units of Product A in 2022 using 90,900 direct labor hours. Actual results for 2022 are as follows: 12 $48 31.200 units of Product A were produced. Actual direct labor costs were $753,580 for 91,900 direct labor hours worked. Actual direct materials purchased and used during the year cost $350,625 for 127,500 pounds. Actual variable overhead incurred was $158,000 and actual fixed overhead incurred was $206,000. Compute the following variances showing all computations to support your answers. Indicate whether the variances are favorable or unfavorable.
Product A Cost Component Direct materials Direct labor Manufacturing overhead . . BRAMBLECOMPANY Standard Cost Card . Standard Quantity x 4 pounds 3 hours 3 hours Standard Price $3 8 Standard Cost $12 24 The company expected to produce 30,300 units of Product A in 2022 using 90,900 direct labor hours. Actual results for 2022 are as follows: 12 $48 31.200 units of Product A were produced. Actual direct labor costs were $753,580 for 91,900 direct labor hours worked. Actual direct materials purchased and used during the year cost $350,625 for 127,500 pounds. Actual variable overhead incurred was $158,000 and actual fixed overhead incurred was $206,000. Compute the following variances showing all computations to support your answers. Indicate whether the variances are favorable or unfavorable.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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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Transcribed Image Text:The company expected to produce 30,300 units of Product A in 2022 using 90,900 direct labor hours.
Actual results for 2022 are as follows:
.
.
.
.
31,200 units of Product A were produced.
Actual direct labor costs were $753,580 for 91,900 direct labor hours worked.
Actual direct materials purchased and used during the year cost $350,625 for 127,500 pounds.
Actual variable overhead incurred was $158,000 and actual fixed overhead incurred was $206,000.
Compute the following variances showing all computations to support your answers. Indicate whether the variances are favorable or
unfavorable.
Materials Quantity Variance
Total Direct Labor Variance
Direct Labor Quantity Variance
Direct Materials Price Variance
Total Overhead Variance
$
Unfavorable
Not Applicable
Favorable
Transcribed Image Text:Product A
Cost Component
Direct materials
Direct labor
Manufacturing
overhead
•
Actual results for 2022 are as follows:
.
BRAMBLECOMPANY
Standard Cost Card
Standard Quantity X
4 pounds
3 hours
.
3 hours.
Standard Price
$3
8
Standard Cost
The company expected to produce 30,300 units of Product A in 2022 using 90,900 direct labor hours.
$12
24
12
$48
31,200 units of Product A were produced.
Actual direct labor costs were $753,580 for 91,900 direct labor hours worked.
Actual direct materials purchased and used during the year cost $350,625 for 127,500 pounds.
Actual variable overhead incurred was $158,000 and actual fixed overhead incurred was $206,000.
Compute the following variances showing all computations to support your answers. Indicate whether the variances are favorable or
unfavorable.
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