Upon your review of HxH Company's standard cost card. You found the following information: Standards: Material 5.0 feet per unit @ P4.00 per foot Labor 3.0 hours per unit @ 35.00 per hour Actual: Production 2,800 units produced during the month Material 14,500 feet used; 15,100 feet purchased @ P3.70 per foot Labor 8,150 direct labor hours @ P36.00 per hour. (only need solu) What is the material quantity variance? 750 UF What is the material price variance? 4,530 F
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.
- Upon your review of HxH Company's
standard cost card. You found the following information:
Standards:
Material 5.0 feet per unit @ P4.00 per foot
Labor 3.0 hours per unit @ 35.00 per hour
Actual: Production 2,800 units produced during the month
Material 14,500 feet used; 15,100 feet purchased @ P3.70 per foot
Labor 8,150 direct labor hours @ P36.00 per hour.
(only need solu)
What is the material quantity variance? 750 UF
What is the material price variance? 4,530 F
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