3. The Frostbite Manufacturing Co. uses a standard cost system, and calculates the related variances. The...
3. The Frostbite Manufacturing Co. uses a standard cost system, and calculates the related variances. The following data pertain to material and labor costs for the manufacture of its only product: Refrigerant 410A canisters.
Standard costs:
Direct materials: 2 pounds @ $8/pound
Direct labor: 1/2 hour @ $10/hour
Actual results for June:
600 canisters produced
Direct materials: $10,000 for 1,290 pounds ($7.75/pound)
Direct labor: $ 3,300 for 320 hours ($10.31/hr.)
Complete the following table. The cell values should represent total dollars, not per unit amounts. Label the variances F or U. (20 points.)
|
AQ X AP |
Price Variance |
AQ X SP |
Quantity Variance |
SQ X SP |
|
|
D. materials |
|||||
|
D. labor |
Homework Answers
AP = 7.75 per pound
Actual Quantity = 1290
Stadard quantity = 600 * 2 = 1200 pounds
Stanadrd rate = 8 per pound
AQ*SP = 1290 * 8 = 10320
SQ*SP = 1200*8 = 9600
D. Labour = 600/2 = 300 * 10 = 3000
| AQ*AP (a) | Price Variance (A-b) | AQ*SP (b) | Quantity Variance ( b-c) | SQ*SP ( C ) | |
| D.M | 10000 | 320 Favorable | 10320 | -720 | 9600 |
| D. Labour | 3300 | - 100 Unfavorable | 3200 | -200 | 3000 |
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