# Variance Analysis

Hello,

Help me with the attached problem Please.

Thanks

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

https://brainmass.com/business/accounting/variance-analysis-167133

#### Solution Preview

Please see the attached file

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.

ANOVA Problem

When we want to test two samples to determine if it is likely that the population means (estimated by the sample means) are different, we typically use a t-test. If the samples are large, we can also use a z-test. (Note that the formulas for computing s, t and/or z in the case of a two-sample test are different than the formulas for computing the same values in a one-sample test. Use Excel data analysis to conduct tests comparing two sample means.)

Using ANOVA (short for Analysis of Variance), however, we can test 3 or more sample means to determine if at least one of the sample means comes from a population with a mean that is significantly different from all of the others in the test. We actually do this by estimating a combined population variance two different ways and comparing the two estimates (the ratio of these two variance estimates follows the so-called "F distribution").

Question:

Why do we need a new test method to compare the means of 3 or more populations? Why can't we just use a series of z-tests or t-tests to compare all of the possible pairs of population means to see if one (or more) is different?

Most of the testing is to determine one or two things:

1. Is there a statistically significant difference between two or more population means? (based on comparison of 2 or more sample means)

2. Is there a statistically significant relationship between two or more variables? We can use regression analysis or chi-square tests to answer this second question.)

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