**Acme Inc. Variance Analysis**Acme Inc. has provided the following information for variance analysis:- **Actual price paid for material:** $1.00- **Standard price for material:** $0.90- **Actual quantity purchased and used in production:** 100 units- **Standard quantity for units produced:** 90 units- **Actual labor rate per hour:** $15- **Standard labor rate per hour:** $16- **Actual hours:** 200 hours- **Standard hours for units produced:** 220 hours**Tasks:**A. Compute the material price and quantity variances.B. Compute the labor rate and labor efficiency variances.C. Describe the possible causes for this combination of favorable and unfavorable variances.**Analysis Guidelines:**- For material price variance, assess the difference between the actual and standard prices per unit and multiply by the actual quantity.- For material quantity variance, analyze the difference between actual and standard quantities used, multiplied by the standard price.- For labor rate variance, compare the actual and standard labor rates per hour, multiplied by actual hours worked.- For labor efficiency variance, compare the actual and standard hours worked, multiplied by the standard labor rate.- Consider possible factors affecting these variances, like changes in supplier prices or production efficiency.

Name: **Acme Inc. Variance Analysis**Acme Inc. has provided the following i
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Description: **Acme Inc. Variance Analysis**Acme Inc. has provided the following information for variance analysis:- **Actual price paid for material:** $1.00- **Standard price for material:** $0.90- **Actual quantity purchased and used in production:** 100 unit

Variances A variance is the difference between the actual cost incurred and the budgeted or…

Business

Accounting

2. Acme Inc. has the following information available: Actual price paid for material Standard price for material Actual quantity purchased and used in production Standard quantity for units produced Actual labor rate per hour Standard labor rate per hour Actual hours Standard hours for units produced $1.00 $0.90 A. B. C. D. E. unfavorable variances. Compute the material price and quantity, and the labor rate and efficiency variances. Describe the possible causes for this combination of favorable and 100 90 15 $ $ 16 200 220

2. Acme Inc. has the following information available: Actual price paid for material Standard price for material Actual quantity purchased and used in production Standard quantity for units produced Actual labor rate per hour Standard labor rate per hour Actual hours Standard hours for units produced $1.00 $0.90 A. B. C. D. E. unfavorable variances. Compute the material price and quantity, and the labor rate and efficiency variances. Describe the possible causes for this combination of favorable and 100 90 15 $ $ 16 200 220

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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Antuan Company set the following standard costs per unit for its product. Direct materials (6 pounds @ $5 per pound) $ 30 Direct labor (2 hours @ $17 per hour) 34 Overhead (2 hours @ $18.50 per hour) 37 Standard cost per unit $ 101 The standard overhead rate ($18.50 per direct labor hour) is based on a predicted activity level of 75% of the factory's capacity of 20,000 units per month. Following are the company's budgeted overhead costs per month at the 75% capacity level. Overhead Budget (75% Capacity) Variable overhead costs $ 45,000 Indirect materials Indirect labor 180,000 Power 45,000 Maintenance 90,000 costs 360,000 Total var ble ove Fixed overhead costs. 24,000 80,000 Depreciation-Building Depreciation-Machinery Taxes and insurance Supervisory salaries. 12,000 79,000 Total fixed overhead costs 195,000 Total overhead costs $ 555,000 The company incurred the following actual costs when it operated at 75% of capacity in October. Direct materials (91,000 pounds @ $5.10 per pound) $…
Required Indicate whether each of the following variances is favorable (F) or unfavorable (U). The first one has been done as an example. Note: Select "None" if there is no effect (1.e., zero variance). Item to Classify Sales volume Sales price Materials cost Materials usage Labor cost Labor usage Fixed cost spending Fixed cost per unit (volume) $ $ $ $ $ Standard 40,100 units 3.61 per unit 3.00 per pound 91,100 pounds 10.10 per hour 61,100 hours 401,000 3.21 per unit $ $ $ $ $ Actual 42,100 units 3.64 per unit 3.10 per pound 90,100 pounds 9.70 per hour 61,900 hours 391,000 3.17 per unit Type of Variance F
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1.3 REQUIRED Use the information provided below to calculate the following variances. Each answer must indicate whether the variance is favourable or unfavourable. 1.3.1 Material quantity variance 1.3.2 Labour rate variance 1.3.3 Variable manufacturing overheads efficiency variance INFORMATION The standard variable costs per unit (with a standard quantity of 25 000 units), set by Kidman Manufacturers, for Product M are as follows: Materials Labour Variable overhead 4 kg at R10 per kg 2 hours at R20 per hour 2 hours at R12 per hour The actual costs for October 2022 are as follows: Materials Materials Labour Variable overhead 100 000 kg were purchased for R980 000 78 000 kg were used to produce 20 000 units of Product M 41 000 labour hours at R19.60 per hour R500 200 incurred
Please assist with requirements 1 and 2, providing explanations for each calculation in detail. Thanks! Requirements 1. Compute the variable overhead cost and efficiency variances and fixed overhead cost and volume variances. 2. Explain why the variances are favorable or unfavorable.