Standard Cost Sheet: Massage Chair
Metal tubing 6 meters @ $3 $18.00
Leather 2 square meters @ $7 $14.00
Padding 3 kilograms @ $4 $12.00
Direct labor 4 hours @ $15 $60.00
Total standard cost $104.00
This month, SpineLine manufactured 500 massage chairs. The subsequent costs were incurred:
Actual Costs Incurred for Month: Massage Chair
Metal tubing 3,100 meters $9,455
Padding 1,600 kilograms $6,560
Leather 1,100 square meters $7,722
Direct labor 1,800 hours $27,270
Total cost $51,007
Question
Evaluate all materials and labor variances in a spreadsheet by using a program like Excel. Be sure to add price, quantity, wage rate, and labor efficiency variances.
Create a memo to your subordinate, using a program like Word. In your memo, summarize and examine the actual costs incurred for the month. Ask for explanation of any variances that need to be investigated.