Problem 7-58 Name:
Insert or select your answers in the gray-shaded cells. If an
answer is incorrect, the word “wrong” will appear.
a. Material price variance:
Material price variance = AQ x (AP – SP)
Aluminum Copper Total
Actual price (AP) 3.80$ 8.40$
– Standard price (SP) 4.00 8.00
(0.20)$ 0.40$
x Actual quantity used (AQ) 4,000 3,000
Material price variance (800)$ Fav. 1,200$ Unfav. 400$ Unfav.
b. Material usage variance:
Standard quantity of aluminum
3,400
Standard quantity of copper 2,550
Material usage variance = SP x (AQ – SQ)
Aluminum Copper Total
Actual quantity (AQ) 3,500 2,600
– Standard quantity (SQ) 3,400 2,550
100 50
x Standard price (SP) $4.00 $8.00
Material usage variance 400$ Unfav. 400$ Unfav. 800$ Unfav.
c. Labor rate variance:
Total actual labor cost 98,500$
Standard labor cost 97,600
900$ Unfav.
d. Labor efficiency variance:
Labor efficiency variance = SP x (AH – SH)
Actual hours (AH) 6,100
Standard hours (SH) 5,950
150
Standard price (SP)
×$16.00
Labor efficiency variance 2,400$ Unfav.
Solution
e. Variable overhead spending variance:
Actual VOH 23,300$
Budgeted VOH at actual hrs. 25,050
1,750$ Fav.
f. Variable overhead efficiency variance:
Budget at actual 25,050$
Less: Budget at standard 25,500
450$ Fav.
g.
Actual FOH 18,850$
Budgeted FOH 24,000
5,150$ Fav.
h. FOH volume variance:
Budget FOH 24,000$
Applied FOH 17,000
7,000$ Unfav.
i.
Actual OH 42,150$
Budgeted OH at standard hrs. 49,500
7,350$ Fav.
OR
VOH spending 1,750$
VOH efficiency 450
FOH spending 5,150
7,350$ Fav.
Fixed overhead spending variance:
Budget variance: