Question Details

Calculate the following variances and indicate whether each is favorable 



1.Woods, Inc. budgeted the following overhead costs for the current year assuming operations at 80% of

Total variable overhead………………………………….  $240,000
Total fixed overhead…………………………………......    560,000
Total overhead…………………………………………… $800,000

capacity, or 40,000 units:
The standard cost per unit when operating at this same 80% capacity level

Direct materials (5lbs. @$4/lb.)……………………………….	$20.00
Direct labor (2 hrs. @ $8.75/hr.)………………………………	  17.50
Variable overhead (2hrs.@ $3/hr.)……………………………..	    6.00
Fixed overhead (2hrs.@ $7/hr.)………………………………..	  14.00
Total cost per unit………………………………………………	$57.50
is:
The actual production achieved in the current year was 60% of capacity, or 30,000 units. The actual costs

Direct materials (150,350 lbs.)………………………$616,435
Direct labor (59,800 hrs.)……………………………520,260
Variable overhead …………………………………..192,000
Fixed overhead………………………………………552,000

were:
Calculate the following variances and indicate whether each is favorable or

Direct materials:
		Price variance………………………………..
		Quantity variance…………………………..
Direct labor:
		Rate variance…………………….
		Efficiency variance………………….
Variable overhead:
		Spending variance……………………..
		Efficiency variance……………………..
Fixed overhead
		Spending variance…………………………….
		Volume variance……………………….
unfavorable.
2.Manatee Corp. has developed standard costs based on a predicted operating level of 352,000
units of production, which is 80% of capacity. Variable overhead is $281,600 at this level
of activity, or $0.80 per unit. Fixed overhead is $440,000. The standard costs per unit
Direct materials (0.5lbs. @$1/lb.)……………………………….	$0.50 per unit
Direct labor (1 hrs. @ $6/hr.)………………………………	 ……   $6.00 per unit
overhead (1hrs.@ $2.05/hr.)…………………………………...	$2.05 per unit

are:
Manatee actually produced 330,000 units at 75% of capacity and actual costs for the period

Direct materials (162,000lbs.)……………………………….	$170.00
Direct labor (329,500 hrs. )………….………………………	$2,042,900
Fixed overhead ……………………….……………………..	$438,000
Variable overhead …………………………………………..	$262,000

were:
Calculate the following variances and indicate whether each variance is favorable or unfavorable:
(1) Direct labor efficiency variance:
$__________________
(2) Direct materials price variance:
$__________________
(3) Controllable overhead variance:
$__________________





Business Management Assignment Help, Business Management Homework help, Business Management Study Help, Business Management Course Help