25-1
SOLUTION
Chapter 25 Waterways Continuing Problem
WCP25
(a)
Materials Price Variance
Actual Quantity
x Actual Price
less
Actual Quantity
x Standard Price
* Standard price per pound :
(b)
Materials Quantity Variance
Actual Quantity
x Standard Price
less
Standard Quantity
x Standard Price
less
= $1,500
* 115,500 units x 2 lbs = 231,000
(c)
Total Materials Variance
Actual Quantity
x Actual Price
less
Standard Quantity
x Standard Price
229,000 lbs
231,000*
x
x
$0.74
= $3,790
F
229,000 lbs
$0.75*
less
F
25-2
(d)
Labor Price Variance
Actual Hours
x Actual Rate
less
Actual Hours
x Standard Rate
(e)
Labor Quantity Variance
Actual Hours
x Standard Rate
less
Standard Hours
x Standard Rate
28,875 hours
23,100*
x
less
= $46,200
U
(f)
Total Labor Variance
Actual Hours
x Actual Rate
Less
Standard Hours
x Standard Rate
28,875 hrs
23,100*
$184,800
= $38,981
U
(g)
Total Overhead Variance
Actual Overhead
Overhead Applied*
$118,473
less
$98,868
= $19,605
U
($54,673 +$63,800) ($4.28 X 23,100 hours)
* Based on standard hours allowed for 115,500 units, 115,500 X .20hrs = 23,100 hours)
28,875 hrs*
x
less
$231,000
F
hour) = 28,875 hrs
25-3
(h) The labor quantity variance is a concern. Perhaps the labor is not as skilled as it should
be. The actual price paid for labor suggests less skill, so it could take workers longer to
complete each unit. Or the materials may not meet the proper standard, causing the
workers to take longer to complete a unit. It could also mean the machinery being used