# Standard Cost and Variance Analysis## Smith Industries Cost System OverviewSmith Industries uses a cost system that carries direct materials inventory at a standard cost. The controller has established the following standards for the cost of one basket (unit):| | Standard Quantity | × | Standard Price | = | Standard Cost ||---|-------------------|---|----------------|---|-----------------|| **Direct materials** | 5 pounds | | $2.60 per pound | | $18.00 || **Direct labor** | 1.25 hours | | $12.00 per hour | | $15.00 || **Total prime cost** | | | | | **$33.00** |> **NOTE:** All dollar amounts are rounded to whole dollars and shown with "$" and commas as needed (i.e., $12,345). For the variance conditions, your answer is either "F" (for Favorable) or "U" (for Unfavorable) - capital letter and no quotes.## Production and Material UsageSmith Industries made 3,000 baskets in July and used 15,500 pounds of material to make these units. Smith Industries paid $39,370 for the 15,500 pounds of material.## Variance AnalysisComplete the following table of variances and their conditions:| Variance | Variance Amount | Favorable (F) or Unfavorable (U) ||---------------------|-----------------|-----------------------------------|| **Material Price** | | || **Material Quantity**| | || **Total DM Cost Variance** | | |### Explanation of Variances- **Material Price Variance**: Measures the difference between the actual cost of materials and the standard cost, based on the actual quantity of materials used.- **Material Quantity Variance**: Measures the difference between the actual quantity of materials used and the standard quantity expected to be used, based on the standard price.- **Total Direct Material (DM) Cost Variance**: The combined effect of material price variance and material quantity variance.**Note**: Favorable (F) variance indicates the cost was less than expected, while an Unfavorable (U) variance indicates the cost was higher than expected.

For the growth of an organization or a company variance analysis plays an important role through the…

Smith Industries uses a cost system that carries direct materials inventory at a standard cost. The controller has established these standards for the cost of one basket (unit): Direct materials Direct labor Total prime cost Standard Quantity 5 pounds 1.25 hours ● Variance Material Price x Material Quantity Standard Price NOTE: All dollar amounts are rounded to whole dollars and shown with "$" and commas as needed (i.e. $12,345). For the variance conditions, your answer is either "F" (for Favorable) or "U" (for Unfavorable) - capital letter and no quotes. Total DM Cost Variance $2.60 per pound $12.00 per hour Smith Industries made 3,000 baskets in July and used 15,500 pounds of material to make these units. Smith Industries paid $39,370 for the 15,500 pounds of material. Complete the following table of variances and their conditions: = Standard Cost $18.00 $15.00 $33.00 Variance Amount Favorable (F) or Unfavorable (U) 10

Smith Industries uses a cost system that carries direct materials inventory at a standard cost. The controller has established these standards for the cost of one basket (unit): Direct materials Direct labor Total prime cost Standard Quantity 5 pounds 1.25 hours ● Variance Material Price x Material Quantity Standard Price NOTE: All dollar amounts are rounded to whole dollars and shown with "$" and commas as needed (i.e. $12,345). For the variance conditions, your answer is either "F" (for Favorable) or "U" (for Unfavorable) - capital letter and no quotes. Total DM Cost Variance $2.60 per pound $12.00 per hour Smith Industries made 3,000 baskets in July and used 15,500 pounds of material to make these units. Smith Industries paid $39,370 for the 15,500 pounds of material. Complete the following table of variances and their conditions: = Standard Cost $18.00 $15.00 $33.00 Variance Amount Favorable (F) or Unfavorable (U) 10

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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2. Acme Inc. has the following information available: Actual price paid for material Standard price for material Actual quantity purchased and used in production Standard quantity for units produced Actual labor rate per hour Standard labor rate per hour Actual hours Standard hours for units produced A. Compute the material price and quantity, and the labor rate and B. C. D. E. unfavorable variances. $1.00 $0.90 100 90 15 $ $ 16 200 220 efficiency variances. Describe the possible causes for this combination of favorable and
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1) What is the materials price variance for March? 2) What is the material quantity variance for March? 3) What is the labor rate variance for March?
Information on Grixdale Partner's fixed overhead costs follows: Overhead applied $ 1,227,800 Actual overhead 1,153,200 Budgeted overhead 1,207,000 Required: What are the fixed overhead price and production volume variances? Note: Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option.
3. Compute the direct labor variance, including its rate and efficiency variances. (Indicate the effect of each variance by selecting favorable, unfavorable, or no variance. Round "Rate per hour" answers to two decimal places.) The drop down options under "actual cost" "standard cost" and the middle box for the first row are: actual rate, standard rate The drop down options for the left bottom 3 rows are: total variable overhead cost variance, variable overhead efficiency variance, variable overhead spending variance, volume variance, direct material variance, Direct labor efficiency variance, direct labor rate variance, direct materials price variance, direct materials quantity variance. the drop down options for the right yellow 3 columns are: favorable, unfavorable, no variance please use the exact format as shown in photos. Thank you !
Best, Inc. uses a standard cost system and provides the following information. (Click the icon to view the information.) variable overhead, $3,800; actual fixed overhead, $3, 500; actual direct labor hours, 1,400. Read the requirements. Data table Requirement 1. Compute the variable overhead cost and efficiency variances and fixed overhead cost and volume variances. Begin with the variable overhead cost and efficiency variances. Select the required formulas, compute the variable overhead cost and favorable (F) or unfavorable (U). (Abbreviations used: AC = actual cost; AQ = actual quantity; FOH = fixed overhead; SC = standardco \table [[,, Formula,Variance], [VOH cost variance, = , 1 = , ], [VOH efficiency variance, =,1 =, 0
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