Acct 3334 Assign 4 solutions March 2011

Acct 3334 Assign 4 solutions March 2011 - 7-29(30...

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Unformatted text preview: 7-29(30 min.)Materials and manufacturing labour variances, standard costs.1.Direct MaterialsActual CostsIncurred(Actual Input Qty.Actual Price)Actual Input Qty.Budgeted PriceFlexible Budget(Budgeted InputQty. Allowed for Actual Output Budgeted Price)(3,700 sq. m $5.10)$18,870(3,700 sq. m $5.00)$18,500(2,000 2 $5.00)(4,000 sq. m $5.00)$20,000$370 U$1,500 FPrice varianceEfficiency variance$1,130 FFlexible-budget varianceThe unfavourable materials price variance may be unrelated to the favourable materials efficiency variance. For example, (a) the purchasing officer may be less skillful than assumed in the budget, or (b) there was an unexpected increase in materials price per square metre due to reduced competition. Similarly, the favourable materials efficiency variance may be unrelated to the unfavourable materials price variance. For example, (a) the production manager may have been able to employ higher-skilled workers, or (b) the budgeted materials standards were set too loosely. It is also possible that the two variances are interrelated. The higher materials input price may be due to higher quality materials being purchased. Less material was used than budgeted due to the higher quality of the materials.7-29 (contd)Direct Manufacturing LabourActual CostsIncurred(Actual Input Qty.Actual Price)Actual Input Qty.Budgeted PriceFlexible Budget(Budgeted InputQty. Allowed for Actual Output Budgeted Price)(900 hrs. $9.80)$8,820(900 hrs. $10.00)$9,000(2000 0.5 $10.00)(1,000 hrs. $10.00)$10,000$180 F$1,000 FPrice varianceEfficiency variance$1,180 F...
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Acct 3334 Assign 4 solutions March 2011 - 7-29(30...

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