Answers
Correct Answer:
Part a | Material Price Variance | $ 910.00 | Favourable-F |
Material quantity variance | $ 3,094.00 | Unfavourable-U |
Part b | Labour rate variance | $ 4,296.00 | Unfavourable-U |
Labour Efficiency variance | $ 3,000.00 | Unfavourable-U |
Working:
Standard DATA for | 5200 | Units | |
Quantity (SQ) | Rate (SR) | Standard Cost | |
Direct Material | 36400 | $ 0.34 | $ 12,376.00 |
Direct labour | 6760 | $ 7.50 | $ 50,700.00 |
Actual DATA for | 5200 | Units | |
Quantity (AQ) | Rate (AR) | Actual Cost | |
Direct Material | 45500 | $ 0.32 | $ 14,560.00 |
Direct labour | 7160 | $ 8.10 | $ 57,996.00 |
Material Price Variance | ||||||
( | Standard Rate | - | Actual Rate | ) | x | Actual Quantity |
( | $ 0.34 | - | $ 0.32 | ) | x | 45500 |
910 | ||||||
Variance | $ 910.00 | Favourable-F | ||||
Material Quantity Variance | ||||||
( | Standard Quantity | - | Actual Quantity | ) | x | Standard Rate |
( | 36400 | - | 45500 | ) | x | $ 0.34 |
-3094 | ||||||
Variance | $ 3,094.00 | Unfavourable-U |
Labour Rate Variance | ||||||
( | Standard Rate | - | Actual Rate | ) | x | Actual Labour Hours |
( | $ 7.50 | - | $ 8.10 | ) | x | 7160 |
-4296 | ||||||
Variance | $ 4,296.00 | Unfavourable-U |
Labour Efficiency Variance | ||||||
( | Standard Hours | - | Actual Hours | ) | x | Standard Rate |
( | 6760 | - | 7160 | ) | x | $ 7.50 |
-3000 | ||||||
Variance | $ 3,000.00 | Unfavourable-U | ||||
End of answer.
Please give a thumbs-up, it will be highly appreciated.
Thanks.
.