1a. Material price variance 1a. Material quantity variance 1b. Labor rate variance 1b. Labor efficiency variance $ 1,540 F U F
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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.
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- Colonels uses a traditional cost system and estimates next years overhead will be $480,000, with the estimated cost driver of 240,000 direct labor hours. It manufactures three products and estimates these costs: If the labor rate is $25 per hour, what is the per-unit cost of each product?Gent Designs requires three units of part A for every unit of Al that it produces. Currently, part A is made by Gent, with these per-unit costs in a month when 4.000 units were produced: Variable manufacturing overhead is applied at $1.00 per unit. The other $0.30 of overhead consists of allocated fixed costs. Gent will need 6,000 units of part A for the next years production. Cory Corporation has offered to supply 6,000 units of part A at a price of $7.00 per unit. It Gent accepts the offer, all of the variable costs and $1,200 of the fixed costs will be avoided. Should Gent Designs accept the offer from Cory Corporation?Bobcat uses a traditional cost system and estimates next years overhead will be $800.000, as driven by the estimated 25,000 direct labor hours. It manufactures three products and estimates the following costs: If the labor rate is $30 per hour, what is the per-unit cost of each product?
- Cozy, Inc., manufactures small and large blankets. It estimates $350,000 in overhead during the manufacturing of 75,000 small blankets and 25,000 large blankets. What is the predetermined overhead rate if a small blanket takes 1 machine hour and a large blanket takes 2 machine hours?Dawson Toys, Limited, produces a toy called the Maze with the following standards: Direct materials: 7 microns per toy at $0.30 per micron Direct labor: 1.3 hours per toy at $7.00 per hour During July, the company produced 4,800 Maze toys. The toy's production data for the month are as follows: Direct materials: 77,000 microns were purchased at a cost of $0.29 per micron. 35,000 of these microns were still in inventory at the end of the month. Direct labor. 6,540 direct labor-hours were worked at a cost of $49,704. Required: 1. Compute the following variances for July: Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all mounts as positive values. Do round intermediate calculations. Round final answer the earest whole dollar amount. a. The materials price and quantity variances. b. The labor rate and efficiency variances. 1a. Material price variance 1a. Material quantity variance 1b.…Dawson Toys, Limited, produces a toy called the Maze with the following standards: Direct materials: 7 microns per toy at $0.33 per micron Direct labor: 1.3 hours per toy at $7.10 per hour During July, the company produced 5,300 Maze toys. The toy's production data for the month are as follows: Direct materials. 73,000 microns were purchased at a cost of $0.30 per micron. 26,625 of these microns were still in inventory at the end of the month. Direct labor. 7,290 direct labor-hours were worked at a cost of $56,133. Required: 1. Compute the following variances for July. Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Do not round intermediate calculations. Round final answer to the nearest whole dollar amount. a. The materials price and quantity variances. b. The labor rate and efficiency variances. 1a. Material price variance 1a. Material quantity…
- Dawson Toys, Limited, produces a toy called the Maze with the following standards: Direct materials: 7 microns per toy at $0.35 per micron Direct labor: 1.5 hours per toy at $6.80 per hour During July, the company produced 5,100 Maze toys. The toy's production data for the month are as follows: Direct materials: 76,000 microns were purchased at a cost of $0.32 per micron. 31,375 of these microns were still in inventory at the end of the month. Direct labor. 8,050 direct labor-hours were worked at a cost of $58,765. Required: 1. Compute the following variances for July: Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Do not round intermediate calculations. Round final answer to the nearest whole dollar amount. a. The materials price and quantity variances. b. The labor rate and efficiency variances.Dawson Toys, Limited, produces a toy called the Maze with the following standards: Direct materials: 6 microns per toy at $0.34 per micron Direct labor. 12 hours per toy at $7.40 per hour During July, the company produced 5,400 Maze toys. The toy's production data for the month are as follows: Direct materials. 77,000 microns were purchased at a cost of $0.31 per micron. 36,500 of these microns were still in inventory at the end of the month. Direct labor 7,080 direct labor-hours were worked at a cost of $56,640. Required: 1. Compute the following variances for July. Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Do not round intermediate calculations. Round final answer to the nearest whole dollar amount. a. The materials price and quantity variances. b. The labor rate and efficiency variances. 1a. Material price variance 1a. Material quantity variance…Dawson Toys, Ltd., produces a toy called the Maze. The company has recently created a standard cost system to help control costs and has established the following standards for the Maze toy: Direct materials: 8 microns per toy at $0.35 per micron Direct labor: 1.5 hours per toy at $6.60 per hour During July, the company produced 5,000 Maze toys. The toy's production data for the month are as follows: Direct materials: 73,000 microns were purchased at a cost of $0.34 per micron. 23,000 of these microns were still in inventory at the end of the month. Direct labor. 7,900 direct labor-hours were worked at a cost of $56,090. Required: 1. Compute the following variances for July: (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Do not round intermediate calculations. Round final answer to the nearest whole dollar amount.) a. The materials price and quantity…
- Dawson Toys, Ltd., produces a toy called the Maze. The company has recently created a standard cost system to help control costs and has established the following standards for the Maze toy: Direct materials: 6 microns per toy at $1.50 per micron Direct labor: 1.3 hours per toy at $21 per hour During July, the company produced 3,000 Maze toys. The toy's production data for the month are as follows: Direct materials: 25,000 microns were purchased at a cost of $1.48 per micron. 5,000 of these microns were still in inventory at the end of the month. Direct labor. 4,000 direct labor-hours were worked at a cost of $88,000. Required: 1. Compute the following variances for July: (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.) a. The materials price and quantity variances. b. The labor rate and efficiency variances. 1а. Material price variance Material quantity…Dawson Toys, Ltd., produces a toy called the Maze. The company has recently established a standard cost system to help control costs and has established the following standards for the Maze toy: Direct materials: 8 microns per toy at $0.32 per micron Direct labor: 1.5 hours per toy at $7.50 per hour During July, the company produced 5,300 Maze toys. The toy's production data for the month are as follows: Direct materials: 70,000 microns were purchased at a cost of $0.29 per micron. 17,000 of these microns were still in inventory at the end of the month. Direct labor. 8,250 direct labor-hours were worked at a cost of $66,00o. Required: 1. Compute the following variances for July: (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Do not round intermediate calculations. Round final answer to the nearest whole dollar amount.) a. The materials price and quantity…Dawson Toys, Ltd., produces a toy called the Maze. The company has recently established a standard cost system to help control costs and has established the following standards for the Maze toy: Direct materials: 6 microns per toy at $0.32 per micron Direct labor: 1.2 hours per toy at $6.60 per hour During July, the company produced 5,000 Maze toys. The toy's production data for the month are as follows: Direct materials: 79,000 microns were purchased at a cost of $0.30 per micron. 41,500 of these microns were still in inventory at the end of the month. Direct labor. 6,400 direct labor-hours were worked at a cost of $44,800. Required: 1. Compute the following variances for July: (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Do not round intermediate calculations. Round final answers to the nearest whole dollar amount.) a. The materials price and quantity…