The following summarized manufacturing data relate to Steffan Corporation's April operations, during which 2,000 finished units of product were produced. Normal monthly capacity is 1,100 direct labor hours. Direct material Standard (2 lb. @ $9.50/lb.) Actual (4,200 lb. @ $10.20/lb.) Direct labor Standard (0.5 hr. @ $24/hr.) Actual (970 hrs. @ $23.40/hr.) Variable overhead Standard (0.5 hr. @ $6/hr.) Actual Total Actual cost: Standard Units Costs $ $19 $12 $3 $34 Total Actual Costs $42,840 22,698 Assume that the 4,200 lb. of materials purchased were all used in producing the 2,000 completed units. Determine the materials price and efficiency variances, abor rate and efficiency variances, and variable Overhead spending and efficiency variances. Materials Variances 6,200 $71,738

The following summarized manufacturing data relate to Steffan Corporation's April operations, during which 2,000 finished units of product were produced. Normal monthly capacity is 1,100 direct labor hours. Direct material Standard (2 lb. @ $9.50/lb.) Actual (4,200 lb. @ $10.20/lb.) Direct labor Standard (0.5 hr. @ $24/hr.) Actual (970 hrs. @ $23.40/hr.) Variable overhead Standard (0.5 hr. @ $6/hr.) Actual Total Actual cost: Standard Units Costs $ $19 $12 $3 $34 Total Actual Costs $42,840 22,698 Assume that the 4,200 lb. of materials purchased were all used in producing the 2,000 completed units. Determine the materials price and efficiency variances, abor rate and efficiency variances, and variable Overhead spending and efficiency variances. Materials Variances 6,200 $71,738

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Description: Material, Labor, and Variable Overhead VariancesThe following summarized manufacturing data relate toSteffan Corporation's April operations, during which2,000 finished units of product were produced. Normalmonthly capacity is 1,100 direct labor hour

FINANCIAL ACCOUNTING

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ISBN:9781259964947

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Concept explainers

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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Question

Material, Labor, and Variable Overhead Variances
The following summarized manufacturing data relate to
Steffan Corporation's April operations, during which
2,000 finished units of product were produced. Normal
monthly capacity is 1,100 direct labor hours.
Direct material
Standard (2 lb. @ $9.50/lb.)
Actual (4,200 lb. @ $10.20/lb.)
Direct labor
Standard (0.5 hr. @ $24/hr.)
Actual (970 hrs. @ $23.40/hr.)
Variable overhead
Standard (0.5 hr. @ $6/hr.)
Actual
Total
Actual cost:
Split cost:
Standard
Units Costs
$
$
$19
$12
$3
$34
Total
Actual
Costs
$42,840
22,698
Assume that the 4,200 lb. of materials purchased were
all used in producing the 2,000 completed units.
Determine the materials price and efficiency variances,
labor rate and efficiency variances, and variable
overhead spending and efficiency variances.
Materials Variances
6,200
$71,738

Determine the materials price and efficiency variances,
labor rate and efficiency variances, and variable
overhead spending and efficiency variances.
Materials Variances
Actual cost:
$
Split cost:
$
Standard cost:
$
Materials price
$
Materials efficiency $
Labor Variances
Actual cost:
$
Split cost:
$
Standard cost: $
Labor rate
Labor efficiency $
(▶
Actual cost:
$
Split cost:
$
Standard cost:
$
Variable overhead spending $
Variable overhead efficiency $
◄►
♦
Variable Overhead Variances
◄►
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