Chapter 11: Using Excel to Make Decisions at Current Designs Part 1
Data
Actual activity for Huegel Hollow order:
Purchases of polyethylene powder 1,200 pounds
Finishing kits assembled 20 kits
Type I labor hours 38 hours
Type Il labor hours 65 hours
Cost of polyethylene purchases $2,040
Cost of assembling finishing kits $3,240
Total type I labor cost $570
Total type Il labor cost $796.25
Number of units produced 20 kayaks
Standards for each kayak:
Pounds of polyethylene powder 54 pounds
Finishing kits 1 each
Type I labor hours 2 hours
Type II labor hours 3 hours
Cost of polyethylene power $1.50 per pound
Cost of finishing kits $170.00 per kit
Type I labor rate $15.00 per hour
Type II labor rate $12.00 per hour
Required
Follow the step-by-step directions to perform variance analysis for Current Designs.
Part 1
(a)
NEI
NEI
Quantity variance for polyethylene powder
Price variance for polyethylene powder
Quantity variance for finishing kits
(b) Quantity variance for polyethylene powder
AQ × SP −SQ × SP
Favorable, Unfavorable or
NEI
Unfavorable
Unfavorable
NEI
Quantity variance for finishing kits
AQ × SP −SQ × SP
3,400$ −3,400$ = –$ No variance
Price variance for finishing kits
AQ × AP −AQ × SP
Quantity variance for type II workers
AH × SR −SH × SR
780$ −720$ = (60)$ Unfavorable
Price variance for type II workers
AH × AR −AH × SR
796.25$ −780$ = (16)$ Unfavorable
Chapter 11: Using Excel to Make Decisions at Current Designs Part 2
Data
Actual activity for Huegel Hollow order:
Purchases of polyethylene powder 1,200 pounds
Finishing kits assembled 20 kits
Type I labor hours 38 hours
Type Il labor hours 65 hours
Cost of polyethylene purchases $2,040
Cost of assembling finishing kits $3,240
Standards for each kayak:
Pounds of polyethylene powder 54 pounds
Finishing kits 1 each
Type I labor hours 2 hours
Type II labor hours 3 hours
Cost of polyethylene power $1.50 per pound
Cost of finishing kits $170.00 per kit
Required
Follow the step-by-step directions to perform variance analysis for Current Designs.
Part 1
(a)
NEI
Unfavorable
NEI
Quantity variance for polyethylene powder
Price variance for polyethylene powder
Quantity variance for finishing kits
(b) Quantity variance for polyethylene powder
AQ × SP −SQ × SP
Quantity variance for finishing kits
Favorable, Unfavorable or
Unfavorable
Unfavorable
NEI
AQ × SP −SQ × SP
3,400$ −3,570$ = 170$ Favorable
Price variance for finishing kits
AQ × AP −AQ × SP
Price variance for type I workers
AH × AR −AH × SR
570$ 570$ = –$ No variance
Quantity variance for type II workers