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The budgeted and actual data for direct materials and labor are as follows: Budgeted Actual DM price $3 per pound $2.75 per pound DM quantity per unit 7 pounds per unit 8 pounds per unit DL price $10 per hour $13 per hour DL quantity per unit 0.4 hours per unit 0.5 hours per unit Actual sales volume is 100 units. Budgeted sales volume is 80 units. a) Without computations, characterize the following variances as favorable or unfavorable: input price variance for DM OF OU input efficiency variance for DM OF OU input price variance for DL OF OU input efficienccy variance for DL OF OU b) Compute the input price and input efficiency variances for DM and DL. As a preliminary step, compute actual input quantity (total pounds or hours we actually used) and flexible budget input quantity (total pounds or hours we should have used for actual output actual input quantity for DM = 800 flexible budget input quantity for DM = [700 actual input quantity for DL = 50 flexible budget input quantity for DL = 40 V pounds v pounds v hours v hours Next, compute the variances. Enter favorable variances as a positive number and unfavorable variances as a negative number. Do NOT enter F or U. input price variance for DM = $ 200 input efficiency variance for DM = $ -100 input price variance for DL = $ 120 input efficiency variance for DL = $ 120

The budgeted and actual data for direct materials and labor are as follows: Budgeted Actual DM price $3 per pound $2.75 per pound DM quantity per unit 7 pounds per unit 8 pounds per unit DL price $10 per hour $13 per hour DL quantity per unit 0.4 hours per unit 0.5 hours per unit Actual sales volume is 100 units. Budgeted sales volume is 80 units. a) Without computations, characterize the following variances as favorable or unfavorable: input price variance for DM OF OU input efficiency variance for DM OF OU input price variance for DL OF OU input efficienccy variance for DL OF OU b) Compute the input price and input efficiency variances for DM and DL. As a preliminary step, compute actual input quantity (total pounds or hours we actually used) and flexible budget input quantity (total pounds or hours we should have used for actual output actual input quantity for DM = 800 flexible budget input quantity for DM = [700 actual input quantity for DL = 50 flexible budget input quantity for DL = 40 V pounds v pounds v hours v hours Next, compute the variances. Enter favorable variances as a positive number and unfavorable variances as a negative number. Do NOT enter F or U. input price variance for DM = $ 200 input efficiency variance for DM = $ -100 input price variance for DL = $ 120 input efficiency variance for DL = $ 120

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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Question 2: Input price and input efficiency variances The budgeted and actual data for direct materials and labor are as follows: Budgeted Actual DM price $3 per pound $2.75 per pound DM quantity per unit 7 pounds per unit 8 pounds per unit DL price $10 per hour $13 per hour DL quantity per unit 0.4 hours per unit 0.5 hours per unit Actual sales volume is 100 units. Budgeted sales volume is 80 units. a) Without computations, characterize the following variances as favorable or unfavorable: input price variance for DM OF OU input efficiency variance for DM OF OU input price variance for DL OF OU input efficiency variance for DL OF OU b) Compute the input price and input efficiency variances for DM and DL. As a preliminary step, compute actual input quantity (total pounds or hours we actually used) and flexible budget input quantity (total pounds or hours we should have used for actual output): actual input quantity for DM = |800 flexible budget input quantity for DM = 700 actual input quantity for DL = 50 flexible budget input quantity for DL = 40 pounds pounds hours hours Next, compute the variances. Enter favorable variances as a positive number and unfavorable variances as a negative number. Do NOT enter F or U. input price variance for DM = $ 200 input efficiency variance for DM = $ $ 120 $ 120 -100 input price variance for DL = input efficiency variance for DL =
Transcribed Image Text:Question 2: Input price and input efficiency variances The budgeted and actual data for direct materials and labor are as follows: Budgeted Actual DM price $3 per pound $2.75 per pound DM quantity per unit 7 pounds per unit 8 pounds per unit DL price $10 per hour $13 per hour DL quantity per unit 0.4 hours per unit 0.5 hours per unit Actual sales volume is 100 units. Budgeted sales volume is 80 units. a) Without computations, characterize the following variances as favorable or unfavorable: input price variance for DM OF OU input efficiency variance for DM OF OU input price variance for DL OF OU input efficiency variance for DL OF OU b) Compute the input price and input efficiency variances for DM and DL. As a preliminary step, compute actual input quantity (total pounds or hours we actually used) and flexible budget input quantity (total pounds or hours we should have used for actual output): actual input quantity for DM = |800 flexible budget input quantity for DM = 700 actual input quantity for DL = 50 flexible budget input quantity for DL = 40 pounds pounds hours hours Next, compute the variances. Enter favorable variances as a positive number and unfavorable variances as a negative number. Do NOT enter F or U. input price variance for DM = $ 200 input efficiency variance for DM = $ $ 120 $ 120 -100 input price variance for DL = input efficiency variance for DL =
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