Ithasnosignificancefor controlpurpose chapter8

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Unformatted text preview: Chapter 7 • What amounts are reported for revenues in the flexible­budget (A) and the static­ budget (B), respectively? • $82,160; $84,960 Chapter 7 Chapter 7 • What are the actual variable costs (C) • $32,120 Chapter 7 Chapter 7 • What is the total flexible­budget variance (D) • $3,320 favorable Chapter 7 Chapter 7 • Madzinga’s Draperies manufactures curtains. A certain window requires the • • • During the second quarter, the company made 1,500 curtains and used following: Direct materials standard Direct manufacturing labor standard 10 square yards at $5 per yard 5 hours at $10 14,000 square yards of fabric costing $68,600. Direct labor totaled 7,600 hours for $79,800. • Required: a. • • b. Compute the direct materials price and efficiency variances for the quarter. Compute the direct manufacturing labor price and efficiency variances for the quarter. Chapter 7 Chapter 7 • • • • • • • • • • • • • • a. Direct materials variances: Actual unit cost = $68,600/14,000 square yard = $4.90 per square yard Price variance = 14,000 x ($5.00 ­ $4.90) = $1,400 favorable Efficiency variance = $5.00 x (14,000 ­ (1,500 x 10)) = $5,000 favorable b. Direct manufacturing labor variances: Actual labor rate = $79,800/7,600 = $10.50 per hour Price variance = 7,600 x ($10.50 ­ $10.00) = $3,800 unfavorable Efficiency variance = $10.00 x (7,600 ­ 7,500) = $1,000 unfavorable Chapter 8 Chapter 8 • Variable OH variances: – VOH Efficiency variance = Budgeted cost per unit of cost driver X (actual cost driver* – Budgeted * cost driver). – Variable OH spending variances: = actual quantity of cost driver X (actual cost per cost driver – Budgeted cost per cost driver) – Fixed OH Spending variance = Actual costs – budgeted costs • Fixed OH variances:...
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This note was uploaded on 04/05/2010 for the course BUSINESS 11 taught by Professor 11 during the Spring '10 term at University of Hawaii, Manoa.

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