1.
Concept introduction:
A material price variance is generated due to the difference in the actual and standard price of the material used. A material quantity variance is generated due to the difference in the actual and standard quantity of the material used. A favorable material price variance indicates that the actual price of the material is less than its standard price. And an unfavorable material quantity variance indicates that the actual material used in production is higher than the standard quantity of material allowed.
To calculate: The material price and quantity variance for the month.
2.
A labor cost variance is the sum of two variances; labor rate variance and labor efficiency variance. Labor rate variance is generated due to the difference between the actual rate and standard rate of labor. Labor efficiency variance is generated due to the difference between the actual hours and standard hours of labor used.
To calculate: The labor rate and efficiency variance for the month.
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Chapter 11 Solutions
Managerial Accounting for Managers
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