a)

Direct material variances

Material price variance = (AQ) x (AP) - (AQ) x (SP) 1,020 U

Material quantity variance = (AQ) x (SP) - (SQ) x (SP) 2,100 U

Total direct material variances 3,120 U

Actual price 7.2

Actual quantity 5100

Standard quantity 4800

Standard price 7

Overhead variances
Overhead price variance = (AQ) x (AP) - (AQ) x (SP) 3,700 U

Overhead quantity variance = (AQ) x (SP) - (SQ) x (SP) (3,360) F

Total overhead variances 340 U

Actual price 12.5

Standard quantity 7680
Actual quantity 7400
Standard price 12
b)
Total overhead variance = Actual overhead - overhead applied
(76,797.16)
a)

Direct material variances

Material price variance = (AQ) x (AP) - (AQ) x (SP) 1,590 U
Material quantity variance = (AQ) x (SP) - (SQ) x (SP) 1,260 U
Total direct material variances 2,850 U

Actual price 2.25 Standard price 2.1

Actual quantity 10600 Standard quantity 10000

Direct labor variances

Labor price variance = (AQ) x (AP) - (AQ) x (SP) 5,760 U
Labor quantity variance = (AQ) x (SP) - (SQ) x (SP) (4,800) F
Total direct labor variances 960 U

Actual price 8.4 Standard price 8

Actual quantity 14400 Standard quantity 15000

b)
Total overhead variance = Actual overhead - overhead applied (4,000) F

Total standard overhead rate per machine hour 64500

Total actual overhead rate per machine hour 61920

c)
Ayala
Income statement
For the month ended June, 2017
Sale revenue 400000
Cost of good sold (at standard) 334500
Gross profit (at standard) 65500
Variances
Materials price 1,590 U
Material quantity 1,260 U
Labor price 5,760 U
Labor quantity (4,800) F
Overhead (4,000) U
Total variances unfavorable (190)
Gross profit (actual) 65,690
Selling and administrative expense 40,000
Net income 25,690
a)
Direct material variances
Material price variance = (AQ) x (AP) - (AQ) x (SP) (22,625) F
Material quantity variance = (AQ) x (SP) - (SQ) x (SP) 2,200 U
Total direct material variances (20,425) F

Actual price 4.15 Standard price 4.4

Actual quantity 90500 Standard quantity 8

Direct labor variances

Labor price variance = (AQ) x (AP) - (AQ) x (SP) 9,975 U
Labor quantity variance = (AQ) x (SP) - (SQ) x (SP) 10,050 U
Total direct labor variances 20,025 U

Actual price 14.1 Standard price 13.4

Actual quantity 14250 Standard quantity 1.2

b)
Total overhead variance = Actual overhead - overhead applied 3650
c)
Significant materials variance 15840
Significant labor variance 7236
Significant overhead variance 3294
Management should be considered the variances at or more than 4% from standard
a)
Material price variance = AQ x (SP-AP)
3510 =117000 x (SP - 0.92)
SP = 0.95
Standard materials price per pound is $0.95
b)
Material quantity variance = SP x (SQ - AQ)
4750=0.95 x (SQ - 117000)
SQ = 122000
Standard materials quantity per unit is 4.36 (122000/28000)
c)
Standard hour per unit 1.6
Total standard hour allowed 44800
d)
Labor quantity variance = (SR x (SH - AH)
7200 = 12 x (AH - 44800)
AH = 45400
The actual direct labour hours worked were 45400 hours
e)
Labor price variance = AH x (SR - AR)
9080 = 40300 x (12 - AR)
AR = 11.8
The actual rate per hour was 11.8
f)
Predetermined overhead rate = budgeted manufacturing
overhead/standard direct labor hours 7.2
g)
Standard quantity Standard price Standard cost
Direct material 4.36 0.95 4.142
Direct labor 1.6 12 19.2
Manufacturing overhead 1.6 7.2 11.52
Total standard cost per unit 34.862
h)
Applied overhead = Actual labor hours x Predetermined overhead rate 326,880
i)
Material cost 107640
Labor cost 535720
Overhead cost applied 326,880
Total costs assigned to work in process 970240
Actual quantity 117000
Actual price 0.92

Standard price
Standard quantity
a)
Material price variance = (AQ) x (AP) - (AQ) x (SP) -183 F
Material quantity variance = SP x (AQ-SQ) 146 U

Actual price 1.4 Standard price 1.46

Actual quantity 3050 Standard quantity 4307

Direct labor variances

Labor price variance = (AH) x (AR-SR) -1550 F
Labor quantity variance = SR x (SH-AH) 1800 U

Actual rate 23 Standard rate 24

Actual hours 1550 Standard hour 1475
b)
Total Overhead Variance = Actual Overhead - Overhead Applied -1200 F
c)
Hart Labs Inc
Income statement
For the month ended June, 2017
Sale revenue 75000
Cost of good sold (at stand ]
Gross profit (at standard) ., BVC8
Variances
Materials price 183 U
Material quantity 146 U
Labor price 1550 U
Labor quantity 1800 F
Overhead 1200 U
Total variances unfavo 987
Gross profit (actual) #VALUE!
Selling and administrative 5,000
Net income #VALUE!