Question 1: WPC Company's Budget and actual costs per unit are provided below for the most recent period. During this period, 700 units were actually produced. Product Product Standard Cost Actual Cost Unit Price Per Metre $2.00 Materials Metres $10.00 Standard $2.20 $11.44 Actual 5.2 Direct labour Hours Hourly Rate $5.00 $15.00 Standard $5.50 $17.60 Actual 3.2 Variable overhead Hours Hourly Rate $12.00 $3.00 $3.10 Standard 4 $13.02 $42.06 Actual 4.2 $37.00 Total unit cost Required: Given the information above, compute the following variances. Also indicate if the variances are favorable or unfavorable. 1. Materials price variance 2. Materials quantity variance 3. Direct labour rate variance
Question 1: WPC Company's Budget and actual costs per unit are provided below for the most recent period. During this period, 700 units were actually produced. Product Product Standard Cost Actual Cost Unit Price Per Metre $2.00 Materials Metres $10.00 Standard $2.20 $11.44 Actual 5.2 Direct labour Hours Hourly Rate $5.00 $15.00 Standard $5.50 $17.60 Actual 3.2 Variable overhead Hours Hourly Rate $12.00 $3.00 $3.10 Standard 4 $13.02 $42.06 Actual 4.2 $37.00 Total unit cost Required: Given the information above, compute the following variances. Also indicate if the variances are favorable or unfavorable. 1. Materials price variance 2. Materials quantity variance 3. Direct labour rate variance
Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter8: Standard Cost Accounting—materials, Labor, And Factory Overhead
Section: Chapter Questions
Problem 21E: Georgia Gasket Co. budgets 8,000 direct labor hours for the year. The total overhead budget is...
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Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
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Transcribed Image Text:Paragraph
Question 1:
WPC Company's Budget and actual costs per unit are provided below for the most recent period. During
this period, 700 units were actually produced.
Product
Standard Cost
Product
Actual Cost
Materials
Metres
Unit Price Per Metre
Standard
$2.00
$10.00
Actual
5.2
$2.20
$11.44
Direct labour
Hours
Hourly Rate
Standard
3
$5.00
$15.00
$17.60
Actual
Variable
3.2
$5.50
overhead
Hours
Hourly Rate
$12.00
$3.00
$3.10
Standard
$13.02
$42.06
Actual
4.2
Total unit cost
$37.00
Required:
Given the information above, compute the following variances. Also indicate if the variances are
favorable or unfavorable.
1. Materials price variance
2. Materials quantity variance
3. Direct labour rate variance
ns: On
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F6
F7
F8
F9
F10
F11
F12
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Paragraph
$12.00
$3.00
$3.10
Standard
4
$13.02
$42.06
Actual
4.2
Total unit cost
$37.00
Required:
Given the information above, compute the following variances. Also indicate if the variances are
favorable or unfavorable.
1. Materials price variance
2. Materials quantity variance
3. Direct labour rate variance
4. Direct labour efficiency variance
5. Variable overhead rate variance
6. Variable overhead efficiency variance
7. Please give some managerial suggestions based on your calculation.
Text Predictions: On
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