Wisner Fabrication prepares its budgets on the basis of standard costs. Variances are analyzed and reported monthly. There are no materials inventories. The following information relates to the current period: Standard costs (per unit of output) Direct materials, 5 pounds @ $12.00 per pound Direct labor, 1.5 hours @ $30 per hour Factory overhead Variable (30% of material cost) Total standard cost per unit Actual costs and activities for the month follow: Materials used Output Actual labor costs Actual variable overhead $ 60 45 $ 95,790 18 $123 26,300 pounds at $ 12.40 per pound 5,500 units 8,940 hours at $ 32 per hour Required: Prepare a cost variance analysis for the variable costs. 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.

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Wisner Fabrication prepares its budgets on the basis of standard costs. Variances are analyzed and reported monthly. There are no
materials inventories.
The following information relates to the current period:
Standard costs (per unit of output)
Direct materials, 5 pounds @ $12.00 per pound
Direct labor, 1.5 hours @ $30 per hour
Factory overhead
Variable (30% of material cost)
Total standard cost per unit
Actual costs and activities for the month follow:
Materials used
Output
Actual labor costs
Actual variable overhead
$ 60
45
18
$ 123
26,300 pounds at $ 12.40 per pound
5,500 units
$ 95,790
8,940 hours at $ 32 per hour
Required:
Prepare a cost variance analysis for the variable costs.
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.
Transcribed Image Text:Wisner Fabrication prepares its budgets on the basis of standard costs. Variances are analyzed and reported monthly. There are no materials inventories. The following information relates to the current period: Standard costs (per unit of output) Direct materials, 5 pounds @ $12.00 per pound Direct labor, 1.5 hours @ $30 per hour Factory overhead Variable (30% of material cost) Total standard cost per unit Actual costs and activities for the month follow: Materials used Output Actual labor costs Actual variable overhead $ 60 45 18 $ 123 26,300 pounds at $ 12.40 per pound 5,500 units $ 95,790 8,940 hours at $ 32 per hour Required: Prepare a cost variance analysis for the variable costs. 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.
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