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Managerial Accounting Standard Costs

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Nolan Inc. makes a product with the following standard costs:

The company reported the following results concerning this product in August.

The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.
A. The materials quantity variance for August is:

B. The materials price variance for August is:

C. The labor efficiency variance for August is:

D. The labor rate variance for August is:

E. The variable overhead efficiency variance for August is:

F. The variable overhead rate variance for August is:

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The expert examines managerial accounting standard costs.

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SOLUTION: OTA # 460270: Managerial Accounting - Variance Analysis

A. The materials quantity variance for August is:
Direct Material Efficiency/Quantity Variance = Budgeted Input Price X (Actual Input Quantity - Budgeted Input Quantity)
Budgeted Direct Material Price = $6.00/kilo
Actual Input Quantity = 10,860 kilos
Budgeted Input Quantity = 5.3 X 2100 = 11,130 kilos
Direct Material Efficiency/Quantity Variance = $6.00/kilo X (10,860kilos - 11,130kilos)
Direct material Quantity Variance = $6.00 X 270kilos = $1,620 Favorable (F)

B. The materials price variance for August is:
Direct Material Price Variance = Actual Input Quantity X (Actual ...

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