10-59 - SVR) = $5,500 (4,000)($1.50) = $500 Favourable...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
10-59 (35 MINUTES) 1. Calculation of variances: Direct-material price variance = PQ(AP – SP) = 15,000($2.20* – $2.00) = $3,000 U *$2.20 = $33,000 ÷ 15,000 Direct-material quantity variance = SP(AQ – SQ) = $2.00(15,000 – 14,500*) = $1,000 U *14,500 lbs. = 725 × 20 kg. per unit Direct-labour rate variance = AH(AR – SR) = 4,000($18.90* – $18.00) = $3,600 Unfavourable *$18.90 = $75,600 ÷ 4,000 Direct-labour efficiency variance = SR(AH – SH) = $18.00(4,000 – 3,625*) = $6,750 Unfavourable *3,625 hours = 725 units × 5 hours per unit Variable-overhead spending variance = actual variable overhead – (AH ×
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: SVR) = $5,500 (4,000)($1.50) = $500 Favourable Variable-overhead efficiency variance = SVR(AH SH) = $1.50(4,000 3,625) = 562.50 U Fixed-overhead budget variance = actual fixed overhead budgeted fixed overhead = $13,000 $12,500* = $500 Unfavourable *$12,500 = $150,000 (annual) 12 months Fixed-overhead volume variance = budgeted fixed overhead applied fixed overhead = $12,500 $10,875* = $1,625 U *$10,875 = 725 units $15.00 per unit Some accountants would designate a positive volume variance as "unfavourable."...
View Full Document

This note was uploaded on 02/18/2012 for the course BUSE 237 taught by Professor Sf during the Spring '12 term at Simon Fraser.

Ask a homework question - tutors are online