Question 1: Lido Company's standard and actual costs per unit for the most recent period, during which 500 units were actually produced, are given below:
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Standard
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Actual
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Materials
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Standard: 2 feet at $1.50 per foot
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$3.00
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Actual: 1.9 feet at $1.60 per foot
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$3.04
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Direct Labor
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Standard: 1.5 hours at $6.00 per hour
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$9.00
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Actual: 1.7 hours at $6.30 per hour
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$10.71
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Variable manufacturing overhead
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Standard: 1.5 hours at $3.40 per hour
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$5.10
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Actual: 1.7 hours at $3.00 per hour
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$5.10
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Total unit Cost
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$17.10
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$18.85
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All of the material purchased during the period was used in production during the period.
Required to do:
From the foregoing information, compute the following variances. Indicate whether the variance is favorable (F) or unfavorable (U):
a. Material price variance.
b. Material quantity variance.
c. Direct labor rate variance.
d. Direct labor efficiency variance.
d. Variable overhead spending variance.
f. Variable overhead efficiency variance.
Question 2.) The following standards have been established for a raw material used to make product O84:
Standard quantity of the material per unit of output….7.1 meters
Standard price of the material……………………………………..$18.30
The following data pertain to a recent month’s operations:
Actual material purchased…………………………………………..3,400 meters
Actual cost of material purchased……………………………….$64,090
Actual material used in production……………………………...3,100
Actual output…………………………………………………………………500 units of product O84
Required:
a. What is the materials price variance for the month?
b. What is the materials quantity variance for the month?