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Variance for Budget Items

Compute variances for the following items and indicate whether each variance is favorable (F) or unfavorable (U).
Item Budget Actual Variance F or U
Sales revenue $580,000 $600,000
Cost of goods sold $385,000 $360,000
Material purchases at
5,000 pounds $275,000 $280,000
Materials usage $180,000 $178,000
Sales price $500 $489
Production volume 950 units 900 units
Wages at 4,000 hours $60,000 $58,700
Labor usage at $16
per hour $96,000 $97,000
Research and development
expense $22,000 $25,000
Selling and admin.
expenses $49,000 $40,000

Solution Summary

The solution computes various variance namely - Sales revenue, Cost of goods sold, Material purchases, Materials usage, Sales price, Production volume, Wages, Research and development expense, Selling and admin. expenses.

$2.19