Chapter 9, Problem 1AE

The Excel worksheet form that appears below is to be used to recreate the main example in the text related to the Colonial Pewter Company. Download the workbook containing this form from Connect, where you will also receive instructions about how to use this worksheet form.

You should proceed to the requirements below only after completing your worksheet.

Check your worksheet by changing the direct materials standard quantity in cell B6 to 2.9 pounds, the direct labor quantity standard quantity in cell B7 to 0.6 hours. and the variable manufacturing overhead in cell B8 to 0.6 hours. The materials spending variance should now be $1.500 U. the labor spending variance should now be $3.720 F, and the variable overhead spending variance should now be $60 F. If you do not get these answers, find the errors in your worksheet and correct them.
a. What is the materials quantity variance? Explain this variance.
b. What is the labor rate variance? Explain this variance.