The following project is at the end of its sixth week. Find the cost and schedule variances using the proportional earned value rule. Also find the CPI and SPI. Then find the critical ratio of the project using earned value calculations. Finally, calculate the ETC and EAC for the project.
Complete in MS Word or excel.© BrainMass Inc. brainmass.com October 16, 2018, 7:12 pm ad1c9bdddf
Please see attached file.
Step 1: Draw the Network Diagram
Step 2: Determine the Critical Path
After drawing the network diagram we can easily find out that path A-C-E is the critical path as it has the longest duration of 8 wks.
Step 3: Determine Planned Value
At the ...
Uses Project Management tools to determine cost and schedule variance.
Fixed and Variable Costs: Material Usage Variance
Assume the following standard cost information:
Standard cost per unit
Direct materials 10 components at $0.41 per unit 4.10
Direct labor 25 units produced per DLH at $37.50 1.50
VOH $27 per DLH 1.08
Fixed OH Per DLH $57.48 2.30
Standard cost per unit 8.98
Actual information for the year is provided below
Actual production: 2,730,000 units
Actual direct material purchased: 28,000,000 components at actual cost of $0.43 per component
Actual direct materials used: 26,361,000 components
Actual direct labor hour used: 103,000 hours paying $38.00 per hour.
Actual variable overhead: $ 2,940,000
Actual fixed overhead: $ 6,000,000
a. Prepare the material usage variance, the direct labor variances and the overhead variances.
b. Prepare the material price variance.
c. After computing the individual variances, are there any variances that need to be investigated given the assumption that any variance in excess of 1% should be investigated? Explain.
d. For the variances computed, discuss the potential causes of the variances and the departments responsible for the variances.
6. The usefulness of standard costing is being challenged in recent years. There are those who claim that its usefulness is an impediment in the advanced manufacturing environment that many feel is vital in today's competitive environment. Discuss the role and the value of standard costing in today's manufacturing environment. Be sure to address the following questions:
a. What are the major criticisms of standard costing?
b. What are the major advantages, if any, of standard costing?