Units Costs Direct materials Direct labora Variable factory overhead Fixed factory overhead Total costs mo Actual Budget Variance 7,400 6,600 $42,000 $35,000 $7,000 U 162.500 145,000 17,500 U 185,000 150,000 35.000 U 107,000 115,000 8,000 F $496,500 $445,000 $51.500 U Standard cost per unit of product 2.0 direct labor hours @ $25 per labor hour Actual use of direct labor is 13,500 hours $28 per hour
Units Costs Direct materials Direct labora Variable factory overhead Fixed factory overhead Total costs mo Actual Budget Variance 7,400 6,600 $42,000 $35,000 $7,000 U 162.500 145,000 17,500 U 185,000 150,000 35.000 U 107,000 115,000 8,000 F $496,500 $445,000 $51.500 U Standard cost per unit of product 2.0 direct labor hours @ $25 per labor hour Actual use of direct labor is 13,500 hours $28 per hour
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:Presented is an abbreviated performance report for the month of November.
Units
Costs:
$42.000 $35,000 $7,000 U
162.500 145,000 17,500 U
FEE
Variable factory overhead 185,000 150,000 35,000 U
Fixed factory overhead
107.000 115,000 8,000 F
$496,500 $445,000 $51,500 U
Total costs
Actual Budget Variance
6,600
7,400
Direct materials
Direct labor
.
Standard cost per unit of product 2.0 direct labor hours @ $25 per labor hour
Actual use of direct labor is 13,500 hours @ $28 per hour
The labor rate and the labor efficiency variances are:
Select one:
A $40.500 U labor rate variance and $32.500 F labor efficiency variance
O
B. $44,400 U labor rate variance and $36,400 F labor efficiency variance
C. $32,500 Flabor rate variance and $40,500 U labor efficiency variance
D. None of the answers are correct
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