Chapter 8: Variance Analysis
Question #1 Direct-Material Variances ( 10min )
Nakhon Custom Shirt Company uses a special fabric in the production of dress shirts. During August, Nakhon Custom Shirt purchased and used 4,100 square yards in the production of 3,700 shirts at a total cost of $2,812,600. The standard allows one yard at $680 per yard for each shirt.
Calculate (i) the material price variance and (ii) the material quantity variance. PLEASE INDICATE WHETHER IT IS FAVORABLE or UNFAVORABLE VARIANCE.
Question #2 Labor Variances ( 10min )
Ellen Chenoweth, the manager of the city of St. Paul road maintenance shop, uses standards to judge performance. Because a clerk mistakenly discarded some labor records, however, Ellen has only partial data for April. She knows that the total direct-labor flexible-budget variance was $1,643 favorable. Moreover, a recent pay raise produced an unfavorable labor rate variance for April of $1,157. The actual hours of input were 1,780 and the standard labor price was $20 per hour.
Find (i) the actual labor rate per hour and determine (ii) the standard hours allowed for the output achieved. PLEASE INDICATE WHETHER IT IS FAVORABLE or UNFAVORABLE VARIANCE.
Chapter 8: Variance Analysis Question #1 Direct-Material Variances (10 min) Nakhon Custom Shirt Company uses a special fabric in the production of dress shirts. During August, Nakhon Custom Shirt purchased and used 4,100 square yards in the production of 3,700 shirts at a total cost of $2,812,600. The standard allows one yard at $680 per yard for each shirt. Calculate (i) the material price variance and (ii) the material quantity variance. PLEASE INDICATE WHETHER IT IS FAVORABLE or UNFAVORABLE VARIANCE
Question #2 Labor Variances (10 min) Ellen Chenoweth, the manager of the city of St. Paul road maintenance shop, uses standards to judge performance. Because a clerk mistakenly discarded some labor records, however, Ellen has only partial data for April. She knows that the total direct-labor flexible-budget variance was $1,643 favorable. Moreover, a recent pay raise produced an unfavorable labor rate variance for April of $1,157. The actual hours of input were 1,780 and the standard labor price was $20 per hour. Find (i) the actual labor rate per hour and determine (ii) the standard hours allowed for the output achieved.PLEASE INDICATE WHETHER IT IS FAVORABLE or UNFAVORABLE VARIANCE.