The standard cost card for a single unit of Robinson, Incorporated's products is shown below.Direct materials:Direct labor:Variable overhead (based on labor hours):Budgeted production for the monthActual production for the monthStandard Quantity Standard Price/Rate2.5 yards @$ 8.00 per yard0.5 hours @$18.00 per hour0.5 hours @$ 10.00 per hour14,000 units13,500 unitsActual Costs Incurred to Produce 13,500 units:Direct Materials Purchased and UsedDirect Labor PaidVariable Overhead IncurredStandard Quantity35,100 yards @7,425 hours @7,425 hours @1. Compute the direct material, direct labor and variable overhead variances.StandardUnit Cost$20.009.005.00Standard Price/Rate$7.00 per yard$17.50 per hour$12.00 per hourTotal ActualCost$2,45,700$1,29,938$ 89,100

Name: The standard cost card for a single unit of Robinson, Incorporated's
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Description: The standard cost card for a single unit of Robinson, Incorporated's products is shown below.Direct materials:Direct labor:Variable overhead (based on labor hours):Budgeted production for the monthActual production for the monthStandard Quantity Sta

Direct materials variance refers to the difference between the actual cost incurred for materials and the standard cost of materials. Direct materials variance is composed of two variances which are direct materials quantity variance and price variance. Direct materials price variance occurs due to the difference between the actual price of materials and the standard price of materials. Direct materials quantity variance occurs due to the difference between the actual materials used and the standard quantity allowed. Calculate the direct material price and quantity variances as shown below:The direct materials variance is $35,100 favorable as the value is positive, the direct materials quantity variance is -10,800 as the value is negative, and the direct material variance is $24,300 which is favorable. Determine the direct labor rate and efficiency variances in the below manner: The direct labor rate variance is $3,712 favorable as the value comes positive, the direct labor efficiency variance is -$12,150 unfavorable as the value is negative, and the direct labor variance is -$8,438 which is unfavorable. Calculate the variable overhead spending and efficiency variances in the below manner: All the above variances are unfavorable as the values are negative. Direct material price variance is $35,100 favorable, direct material quantity variance is -$10,800 unfavorable, and direct material variance is $24,300 favorable.Direct labor rate variance is $3,712 favorable, direct labor efficiency variance is -$12,150 unfavorable, and direct labor variance is -$8,438 unfavorable.Variable overhead spending variance is -$14,850 unfavorable, variable overhead efficiency variance is -$6,750 unfavorable, and variable overhead variance is -$21,600 unfavorable.

Answered: 1. Compute the direct material, direct…

Business

Accounting

1. Compute the direct material, direct labor and variable overhead variances.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

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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Question

The standard cost card for a single unit of Robinson, Incorporated's products is shown below.
Direct materials:
Direct labor:
Variable overhead (based on labor hours):
Budgeted production for the month
Actual production for the month
Standard Quantity Standard Price/Rate
2.5 yards @
$ 8.00 per yard
0.5 hours @
$18.00 per hour
0.5 hours @
$ 10.00 per hour
14,000 units
13,500 units
Actual Costs Incurred to Produce 13,500 units:
Direct Materials Purchased and Used
Direct Labor Paid
Variable Overhead Incurred
Standard Quantity
35,100 yards @
7,425 hours @
7,425 hours @
1. Compute the direct material, direct labor and variable overhead variances.
Standard
Unit Cost
$20.00
9.00
5.00
Standard Price/Rate
$7.00 per yard
$17.50 per hour
$12.00 per hour
Total Actual
Cost
$2,45,700
$1,29,938
$ 89,100

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