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Part 3 Direct Materials Variances
Preliminary computations
Actual material used: 69,000 lbs. (given)
Direct material cost variances
Actual units at actual cost [69,000 lbs. @ $6.10] $420,900
Direct Materials Price and Quantity Variances
Actual Costs
AQ x AP AQ x SP
Standard Costs
SQ x SP
lbs. per lb. lbs. per lb. lbs. per lb.
(Price variance)
(Quantity variance)
(Total materials variance)
Alternate solution format
Price variance = AQ x (AP - SP)
Quantity variance = (AQ – SQ) x SP
Part 4 Direct labor variances
Preliminary computations
hours
Direct labor cost variances
Direct Labor Rate and Efficiency Variances
Actual Costs
AH x AR AH x SR
Standard Costs
SH x SR
hours per hr. hours per hr. hours per hr.
(Rate variance)
(Efficiency variance)
(Total labor variance)
Alternate solution format
Rate variance = AH x (AR - SR)
Efficiency variance = (AH - SH) x SR
Part 5
SUNCOAST COMPANY
Overhead Variance Report
For Month Ended December 31
Volume Variance
Flexible Actual
Controllable Variance Budget Results Variances*
Variable overhead costs
Fixed overhead costs
Depreciation—Building 24,000 24,000 0
*F = Favorable variance; and U = Unfavorable variance
QA_Edit:
Part 1
Part 2
Direct Materials Price and Quantity Variances
Actual Costs
AQ x AP AQ x SP
Standard Costs
SQ x SP
lbs. per lb. lbs. per lb. lbs. per lb.
(Price variance)
(Quantity variance)
(Total materials variance)
Alternate solution format
Price variance =
AQ x (AP - SP)
Quantity variance =
(AQ – SQ) x SP
Part 4 Direct labor variances
Direct Labor Rate and Efficiency Variances
Actual Costs
AH x AR AH x SR
Standard Costs
SH x SR
hours per hr. hours per hr. hours per hr.
(Rate variance)
(Efficiency variance)
(Total labor variance)
Alternate solution format
Rate variance =
=
AH x (AR - SR)
hour
Efficiency variance =
=
(AH - SH) x SR
hour
Part 5
*F = Favorable variance; and U = Unfavorable variance
Title: Problem 23-6BA (80 minutes)
QA_Ori:
Part 1 Direct Materials Variances
Preliminary computations
Actual quantity of materials used: 92,000 lb. (given)
Direct materials cost variances
Direct Materials Price and Quantity Variances
Actual Cost
AQ x AP AQ x SP
Standard Cost
SQ x SP
lbs. per lb. lbs. per lb. lbs. per lb.
(Price variance)
(Quantity variance)
(Total materials variance)
Alternate solution format
Price variance = AQ x (AP - SP)
lb.
Quantity variance = (AQ - SQ) x SP
lb.
Part 2 Direct Labor Variances
Preliminary computations
Direct labor cost variances
Direct Labor Rate and Efficiency Variances
Actual Costs
AH x AR AH x SR
Standard Costs
SH x SR
hours per hr. hours per hr. hours per hr.
(Rate variance)
(Efficiency variance)
(Total labor variance)
Alternate solution format
Rate variance = AH x (AR - SR)
hour
Efficiency variance = (AH – SH) x SR
hour
Part 3 Overhead Variances
(a) Variable overhead
Preliminary computations
Actual variable overhead (given):
Indirect materials $10,000
Variable overhead cost variances
Variable overhead cost incurred [given] $33,500
Variable Overhead Spending and Efficiency Variances
Actual Overhead
AH x AVR AH x SVR
Applied Overhead
SH x SVR
hours per hr. hours per hr.
(Spending variance)
(Efficiency variance)
(Total variable overhead variance)
(b) Fixed overhead
Preliminary computations
Actual fixed overhead (given):
Rent of factory building $12,000
Fixed overhead cost variances
Fixed overhead cost incurred [given] $48,200
Fixed Overhead Spending and Volume Variances
Actual Overhead Budgeted Overhead Fixed Overhead Applied
hours per hr.
(Spending variance)
(Volume variance)
(Total fixed overhead variance)
(c) Total overhead controllable variance
