Question

Material, Labor, and Variable Overhead Variances
The following summarized manufacturing data relate to Thomas Corporation's April operations, during which 2,000 finished units of product were produced. Normal monthly capacity is 1,100 direct labor hours.

			Standard Units Costs			Total Actual Costs
Direct material
Standard (2 lb. @ $18.00/lb.)			$36
Actual (4,200 lb. @ $19/lb.)					$79,800
Direct labor
Standard (0.5 hr. @ $33/hr.)			$16.50
Actual (950 hrs. @ $32.20/hr.)					30,590
Variable overhead
Standard (0.5 hr. @ $15/hr.)			$7.50
Actual			-		15,450
Total			$60		$125,840

Determine the following variances:

Do not use negative signs with any of your answers. Next to each variance answer, select either "F" for Favorable or "U" for Unfavorable.

Materials Variances
Actual cost:	Answer
Split cost:	Answer
Standard cost:	Answer
Materials price	Answer	Answer
Materials efficiency	Answer	Answer

Labor Variances
Actual cost:	Answer
Split cost:	Answer
Standard cost:	Answer
Labor rate	Answer	Answer
Labor efficiency	Answer	Answer

Variable Overhead Variances
Actual cost:	Answer
Split cost:	Answer
Standard cost:	Answer
Variable overhead spending	Answer	Answer
Variable overhead efficiency	Answer	Answer

Answer 1

1 I B C Materials Variance 2 Actual cost $ 79,800 3 Split Cost $ 75,600 4 Standard cost $ 72,000 5 Material price $ 4,200 U 6 Material Efficiency $ 3,600 U 8 Labor variances 9 Actual cost $ 30,590 10 Split Cost $ 31,350 11 Standard cost $ 33,000 12 Labor rate $ 760 F 13 Labor Efficiency $ 1,650 F 14 15 Variable overhead varainces 16 Actual cost $ 15,450 17 Split Cost $ 14,250 18 Standard cost $ 15,000 19 Variable overhead rate $ 1,200 U 20 Variable Overhead Efficiency $ 750 F

Material price variance = (Actual price - Standard price) "Actual quantity Material price variance = ($19 - $18)*4,200 Material price variance = $4,200 Unfavorable Material quantity variance = (Actual quantity - Standard quantity)*Standard price Material quantity variance = [4,200 - (2,000*2)]*$18 Material quantity variance = (4,200 - 4,000) *$18 Material quantity variance = $3,600 Unfavorable Labor rate variance = (Actual rate - Standard rate) *Actual hours Labor rate variance = ($32.20 - $33)*950 Labor rate variance = $760 Favorable Labor Efficiency variance = (Actual hours - Standard hours)*Standard rate Labor Efficiency variance = [950 - (2,000*0.5)]*$33 Labor Efficiency variance = [950 - 1,000]*$33 Labor Efficiency variance = $1,650 Favorable Variable overhead rate variance = (Actual rate - Standard rate) *Actual hours Variable overhead rate variance = Actual cost - (Standard rate*Actual hours) Variable overhead rate variance = $15,450 - (950*$15) Variable overhead rate variance = $15,450 - $14,250 Variable overhead rate variance = $1,200 Unfavorable Variable overhead Efficiency variance = (Actual hours - Standard hours) *Standard rate Variable overhead Efficiency variance = [950 - (2,000*0.5)]*$15 Variable overhead Efficiency variance = (950 - 1,000) *$15 Variable overhead Efficiency variance = $750 Favorable

1 Bc Materials Variance 2 Actual cost 79800 3 Split Cost -4200*18 4 Standard cost = 2000*36 5 Material price =+B2-B3 6 Material Efficiency =+B3-B4 7 8 Labor variances 9 Actual cost 30590 10 Split Cost =950*33 11 Standard cost =2000*16.5 12 Labor rate =+B10-B9 13 Labor Efficiency =+B11-B10 F 14 15 Variable overhead varainces 16 Actual cost 15450 17 Split Cost =950*15 18 Standard cost =2000*7.5 19 Variable overhead rate =+B16-B17 20 Variable Overhead Efficiency =+B18-B17 F