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Price variance = $630,000 FAQ x SR = 3 x $15 x 70,000 = $3,150,000 (actual cost)SQA x SR = 2 x $15 x 70,000 = $2,100,000(standard cost)Efficiency variance = $1,050,000 U
Problem 1DM Cost VarianceBudgeted per unit:4 lb sheet metal @ $ $8 $322 lb bar stock @ $510Actual: Produced 70,000 unitsSheet metal: Used 294,000 lbs, paid $7.50/lb for 300,000 lbs.Bar stock: Used 122,500 lbs, paid $4.00/lb for 125,000 lbs.Compute price and efficiency variance for each material
Problem 1DM Cost Variance DM efficiency varianceDM price varianceActual Quantity Used x SPThe DM price variance is based on the actual quantity of DM purchased, not the actual quantity of DM usedActual Quantity Purchased x APActual Quantity Purchased x SPSQA x SP
Problem 2Duluth Company reports the following direct-labor information for its primary product for May:Standard rate$7.00 per hourActual rate paid $7.20 per hourStandard hrs allowed for actual production 1,400 hoursDirect-labor efficiency variance $500 UWhat were the actual hours worked, and what was the direct-labor price variance?
Problem 2Direct Labor Cost VarianceSQA x SRAQ x SRDL flexible budget varianceDL efficiencyvarianceDL price variance= $10,594AQ x ARAQ x $7= $10,300$500 U$794 U1,400 x $7= $9,800$294 U1471.4 x $7.20$9,800 + $50010,300/7 = 1471.4 hrs
Problem 3Information about Dalton Corporation’s direct-material cost follows:Standard price per direct-material ounce $ 345Actual quantity purchased and used 420 ouncesStandard quantity allowed for production 435 ouncesPrice variance $2,950 FWhat was the actual purchase price per ounce?
Problem 3DM Cost VarianceDM efficiency variance= $5,175 FDM price variance= $2,950 F420 x $345= $144,900420 x $345= $144,900435 x $345= $150,075$141,950$144,900 - $2,950AP x 420 = $141,950AP = $337.98