The following information is provided to assist you in evaluating the performance of the production operations of Studio Company: Units produced (actual) Master production budget Direct materials Direct labor Overhead Standard costs per unit Direct materials Direct labor Variable overhead Actual costs Direct materials purchased and used Direct labor Overhead Price Variance 56,000 $127,710 108,360 162,540 $1.65 x 2 gallons per unit of output $14 per hour x 0.2 hour per unit $12.00 per direct labor-hour $158,145 (81,100 gallons) 133,874 (9,880 hours) 176,200 (61% is variable) Variable overhead is applied on the basis of direct labor-hours. Required: Calculate all variable production cost price and efficiency variances and fixed production cost price and production volume variances. (Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable If there is no effect, do not select either option.) Efficiency Variance Production Volume Variance
The following information is provided to assist you in evaluating the performance of the production operations of Studio Company: Units produced (actual) Master production budget Direct materials Direct labor Overhead Standard costs per unit Direct materials Direct labor Variable overhead Actual costs Direct materials purchased and used Direct labor Overhead Price Variance 56,000 $127,710 108,360 162,540 $1.65 x 2 gallons per unit of output $14 per hour x 0.2 hour per unit $12.00 per direct labor-hour $158,145 (81,100 gallons) 133,874 (9,880 hours) 176,200 (61% is variable) Variable overhead is applied on the basis of direct labor-hours. Required: Calculate all variable production cost price and efficiency variances and fixed production cost price and production volume variances. (Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable If there is no effect, do not select either option.) Efficiency Variance Production Volume Variance
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter3: Process Cost Systems
Section: Chapter Questions
Problem 24E
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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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