Part D - August Variance Analysis
During September of the current year, the controller was asked to perform variance analyses for August. The January operating data provided the standard prices, rates, times, and quantities per case. There were 1,200 cases produced during August, which was 50 more cases than planned at the beginning of the month. Actual data for August were as follows:
Actual Direct Materials
Price per Case Actual Direct Materials
Quantity per Case
Cream base $1.00 (for 72 ozs.) 75 ozs.
Natural Oils $6.20 (for 24 ozs.) 25 ozs.
Bottle (8-oz.) $4.50 (for 12 bottles) 12.2 bottles
Actual Direct
Labor Rate Actual Direct Labor
Time per Case
Mixing $ 15.25 16.50 min.
Filling $ 11.50 4.50 min.
Actual variable overhead $ 125
Normal volume 1,500 cases
The prices of the materials were different than standard due to fluctuations in the market prices. Specifically, the prices of the cream base and bottles were below the standard price, while the price of natural oils was above the standard price. The Mixing Department used a higher grade labor classification during the month, thus causing the actual labor rate to exceed standard. The Filling department used a lower grade labor classification during the month, thus causing the actual labor rate to be less than standard.
13. Determine and interpret the direct materials price and quantity variances for the three materials. Enter the costs in dollars and cents.
Direct Materials Price Variance
Cream Base Natural Oils Bottles
Actual price $ This question is unanswered $ This question is unanswered $ This question is unanswered
Standard price $ This question is unanswered $ This question is unanswered $ This question is unanswered
Difference $ This question is unanswered $ This question is unanswered $ This question is unanswered
Actual quantity (in cases) This question is unanswered This question is unanswered This question is unanswered
Direct material price variance $ This question is unanswered $ This question is unanswered $ This question is unanswered
Indicate if favorable or unfavorable This question is unanswered This question is unanswered This question is unanswered
Enter the standard price as dollar and cents but carry your answer to three decimals places. For example, $1.3458 would be entered as 1.346.
Direct Materials Quantity Variance
Cream Base Natural Oils Bottles
Actual quantity (ozs.) This question is unanswered This question is unanswered This question is unanswered
Standard quantity (ozs.) This question is unanswered This question is unanswered This question is unanswered
Difference This question is unanswered This question is unanswered This question is unanswered
Standard price $ This question is unanswered $ This question is unanswered $ This question is unanswered
Direct material quantity variance $ This question is unanswered $ This question is unanswered $ This question is unanswered
Indicate if favorable or unfavorable This question is unanswered This question is unanswered This question is unanswered
Interpret your results. The input in the box below will not be graded, but may be reviewed and considered by your instructor.
14. Determine and interpret the direct labor rate and time variances for the two departments. Enter your answers to two decimal places.
Direct Labor Rate Variance
Mixing Department Filling Department
Actual rate $ This question is unanswered $ This question is unanswered
Standard rate $ This question is unanswered $ This question is unanswered
Difference $ This question is unanswered $ This question is unanswered
Actual time (in hours) This question is unanswered This question is unanswered
Direct labor rate variance $ This question is unanswered $ This question is unanswered
Indicate if favorable or unfavorable This question is unanswered This question is unanswered
Direct Labor Time Variance
Mixing Department Filling Department
Actual time (in hours) This question is unanswered This question is unanswered
Standard time (in hours) This question is unanswered This question is unanswered
Difference This question is unanswered This question is unanswered
Standard rate $ This question is unanswered $ This question is unanswered
Direct labor time variance $ This question is unanswered $ This question is unanswered
Indicate if favorable or unfavorable This question is unanswered This question is unanswered
Interpret your results. The input in the box below will not be graded, but may be reviewed and considered by your instructor.
15. Determine and interpret the factory overhead controllable variance.
Actual variable overhead $ This question is unanswered
Variable overhead at standard cost $ This question is unanswered
Factory overhead controllable variance $ This question is unanswered
Indicate if favorable or unfavorable This question is unanswered
Interpret your results. The input in the box below will not be graded, but may be reviewed and considered by your instructor.
16. Determine and interpret the factory overhead volume variance. When determining the fixed factory overhead rate, carry your answer to three decimal places. For example, 5.2786 would be entered as 5.279.
Normal volume (cases) This question is unanswered
Actual volume (cases) This question is unanswered
Difference This question is unanswered
Fixed factory overhead rate $ This question is unanswered
Factory overhead volume variance $ This question is unanswered
Indicate if favorable or unfavorable This question is unanswered
Interpret your results. The input in the box below will not be graded, but may be reviewed and considered by your instructor.
17. Why are there standard direct labor and direct materials costs in the calculations for parts (13) and (14) based on the actual 1,200-case production volume rather than the planned 1,150 cases of production used in the budgets for parts (9) and (10)?
Interpret your results. The input in the box below will not be graded, but may be reviewed and considered by your instructor.
1 answer
1 answer