Answers
a) Material price variance = (Standard price - Actual price) x Actual quantity purchased
= (6.3-5.98) x 48400 = $15,320 F
Note; - Actual price = (Raw material purchased value / Quantity of raw material purchased)
= ($ 289,600 / 48400)
= $ 5.983471 per ounce (Take up to 6 digits after point for exact match)
b) Material Quantity variance = (Standard Quantity allowed - actual quantity of direct material used) x Standard price per unit of direct material
= [(5800 units x 8.2) - 47570] x 6.3
= $ 63 U
Note- Standard quantity allowed = (Actual output x standard quantity per unit) = (5800 x 8.2) = $ 47,560
c) Labor rate variance = (Standard rate - Actual rate) x Actual hours worked
= [21.8 – 23.104101)] x 3170
= $ 4134 U
Note: Actual rate = (Actual direct labor cost / actual direct labor hours) = ($ 73240 / 3170)
= $23.104101 per hour
d) Labor Efficiency variance = (Actual hours worked - Standard hours for actual output)x Standard Rate
= [(3170- 3480)] x 21.8
= $ 6758 U
Note: Standard hours for actual output = (Actual output x Standard hours per unit)
= (5800 x .06)
= 3480 hrs.
e) Variable overhead rate variance = (Standard overhead rate - Actual overhead rate - ) x Actual hours worked
= (4.6 – 4.379811) x 3170
= $ 698 F
Note: Actual overhead rate = (Actual variable overhead / Actual direct labor hours)
= ($ 13,884/3170)
= 4.379811 per hr.
.