# Price variance 630000 f aq x sr 3 x 15 x 70000

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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 2 Alternative SolutionDL efficiency variance = SR(AH – SH)\$500 U = \$7(AH– 1,400)\$500 = \$7AH- \$9,800\$10,300 = \$7AH1,471.4 hours = AH (actual hours worked)DL price variance = AH(AR – SR)DL price variance = 1,471.4*(\$7.20 - \$7.00)DL price variance = \$294 U
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
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