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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
(c)
Total Materials Variance
Actual Quantity
x Actual Price
less
Standard Quantity
x Standard Price
229,000 lbs
231,000*
x
x
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*
(f)
Total Labor Variance
Actual Hours
x Actual Rate
Less
Standard Hours
x Standard Rate
28,875 hrs
23,100*
(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)
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
