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    Variance Analysis

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    MAPLE PRODUCTS, LTD.
    Direct Materials Price and Quantity Variances for Last Year

    Standard quantity of materials per hockey stick:
    Direct materials added to work in process
    Standard direct materials cost per foot
    Standard quantity of direct materials-last year

    Actual quantity of materials per hockey stick:
    Standard quantity of direct materials
    Number of sticks produced
    Standard quantity of direct materials per stick

    Actual quantity of direct materials-last year (feet)

    Standard
    Actual Actual Standard Actual Quantity Actual Quantity Quantity
    Quantity Price Price @ Actual Price @ Std. Price @ Std. Price

    Price Variance
    Materials Used
    Quantity Variance

    Journal Entries:

    Account Debit Credit
    Raw Materials
    Materials Price Variance
    Accounts Payable

    Work in Process
    Materials Quantity Variance
    Raw Materials

    MAPLE PRODUCTS, LTD.
    Labor Rate and Efficiency Variances for Last Year

    Variable overhead efficiency variance:
    Standard rate
    Actual hours
    Standard hours
    Variable overhead efficiency variance

    Labor rate variance
    Actual hours
    Actual rate
    Standard rate
    Labor rate variance

    Standard
    Actual Actual Standard Standard Actual Hours Actual Hours Hours
    Hours Rate Hours Rate @ Actual Rate @ Std. Rate @ Std. Rate

    Rate Variance
    Efficiency Variance
    Total Variance

    Journal Entries:

    Account Debit Credit
    Work in Process
    Labor Efficiency Variance
    Labor Rate Variance
    Wages Payable

    MAPLE PRODUCTS, LTD.
    Variable Overhead Spending and Efficiency Variances for Last Year

    Standard
    Actual Actual Standard Standard Actual Hours Actual Hours Hours
    Hours Rate Hours Rate @ Actual Rate @ Std. Rate @ Std. Rate

    Spending Variance
    Efficiency Variance
    Total Variance

    4. State possible causes of each variance that you have computed.

    For materials:

    For labor:

    For variable overhead:

    MAPLE PRODUCTS, LTD.
    Standard Cost Card

    Standard Standard
    Quantity Price Standard
    or Hours or Rate Cost

    Total standard cost

    MAPLE PRODUCTS, LTD.

    Standard Standard
    Quantity Price Standard
    Standard cost of one hockey stick: or Hours or Rate Cost
    Direct materials (feet) ? $3.00 ?
    Direct labor (hours) 2.0 ? ?
    Variable manufacturing overhead ? $1.30 ?
    Total standard cost $27.00

    Units produced and sold last year 8,000

    Selected cost data: Debit Credit
    Accounts payable-direct material purchased $174,000
    Wages payable 79,200
    Work in process-direct materials $115,200
    Direct labor rate variance 3,300
    Variable overhead efficiency variance 650

    Direct materials purchased (in feet) 60,000
    Actual variable manufacturing overhead
    cost for last year $19,800
    Actual direct materials usage exceeded
    standard per stick (in feet) 0.2

    Check figures:
    (1a) Materials price variance $6,000 F
    (3) Variable overhead spending variance 1,650 F

    © BrainMass Inc. brainmass.com June 3, 2020, 9:07 pm ad1c9bdddf
    https://brainmass.com/business/accounting/variance-analysis-167133

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    MAPLE PRODUCTS, LTD.
    Direct Materials Price and Quantity Variances for Last Year

    Standard quantity of materials per hockey stick:
    Direct materials added to work in process $115,200 Given
    Standard direct materials cost per foot $3.00 Given in table
    Standard quantity of direct materials-last year 38,400 Calculate
    Correct!
    Actual quantity of materials per hockey stick:
    Standard quantity of direct materials 38,400 From above
    Number of sticks produced 8,000 Given
    Standard quantity of direct materials per stick 4.8 Calculate
    Correct!

    Actual quantity of direct materials-last year (feet) 5.00 From above + variance given
    Correct!

    Purchased Calculate Given Given Calculate Standard
    Actual Actual Standard Actual Quantity Actual Quantity Quantity
    Quantity Price Price @ Actual Price @ Std. Price @ Std. Price
    60,000 $2.90 $3.00 $174,000 $180,000 $115,200 Calculate

    Price Variance $6,000 Favorable
    Materials Used $120,000 Actual Ft @ Std $
    Quantity Variance $4,800 ...

    Solution Summary

    The solution explains how to calculate the various material, labor and overhead variances for Maple Products.

    $2.19

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