Ch_7 & 8 Solutions_7.23_8.20 (1)

Ch_7 & 8 Solutions_7.23_8.20 (1)

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1 May 2013 Actual Results Price Variance Units 450 Direct materials $ 13,338.00 $ 1,710.00 U $ 11,628.00 Direct labor $ 5,535.00 $ 67.50 U $ 5,467.50 Total Price Variance $ 1,777.50 U Total Efficiency Variance Total flexible-budget variance for both inputs = $1,777.50 U + $553.50 U = $2,331.00U Total flexible-budget cost of direct materials and direct labor = $10,710 + $5,832 = $16,542 Total flexible-budget variance as % of total flexible-budget costs = $2,331.00 ÷ $16,542 = 14 2 May 2013 Actual Results Price Variance Units 450 Direct materials $ 12,417.68 $ 1,022.24 U $ 11,395.44 Direct labor $ 5,424.30 $ 66.15 U $ 5,358.15 Total Price Variance $ 1,088.39 U Total Efficiency Variance Total flexible-budget cost of direct materials and direct labor = $10,710 + $5,832 = $16,542 Total flexible-budget variance as % of total flexible-budget costs = $1,283.22/$16,542 = 7.76 Actual Qty.*Budgeted Price Actual Qty.*Budgeted Price Total flexible-budget variance for both inputs = $1,071.63U + $211.59U = $1,283.22U
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Flexible Budget 450 $ 918.00 U $ 10,710.00 $ 364.50 F $ 5,832.00 $ 553.50 U 4.09% Flexible Budget 450 $ 685.44 U $ 10,710.00 $ 473.85 F $ 5,832.00 $ 211.59 U 6% Efficiency Variance Efficiency Variance
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1 The Principles Corporation (June 2014) Actual Outputs Units (number of assembled units) 225 Hours of Assembly Time 360 Assembly Hours per Unit 1.60 Variable Mfg. Overhead Cost per Hour of Assembly Time $ 33.15 Variable Mfg. Overhead Costs $ 11,933.00 Fixed Mfg. Overhead Costs
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