Scandia Coat Company makes women's and men's coats. Both products require filler and lining material. The following planning information has been made available:
Scandia Coat does not expect there to be any beginning or ending inventories of filler and lining material. At the end of the budget year, Scandia Coat experienced the following actual results:
The expected beginning inventory and desired ending inventory were realized.
Instructions
1. Prepare the following variance analyses, based on the actual results and production levels at the end of the budget year:
a. Direct materials price, quantity, and total variance.
b. Direct labor rate, time, and total variance.
2. Why are the standard amounts in part (1) based on the actual production at the end of the year instead of the planned production at the beginning of theyear?