Units helmets 70000

Raw material per unit kg 0.6

Total raw material 42000
Standard cost 8RM 8RM $ 8
Standard cost -SC $ 336,000

Actual cost - AC $ 342,000

Standard cost -SC $ 336,000
Total material variance TMV -$ 6,000 Unfavorable

Material Price variance TMV

MPV = AQ(AP-SP)

AQ 45000
AP $ 7.6
SP $ 8.0
MPV -18000 Favorable because we pay less

Materials Quantity variance

MQV = SP(AQ-SQ)

SP $ 8
AQ 45000
SQ 42000
MQV 24000 Unfavorable because we use more

Total Material Variance -TMV

TMV = MPV+MQV

MQV 24000
MPV -18000
TMV 6000 Unfavorable
we use more
Units meals 4000
SH/unit hour 0.25
Total hours 1000
Standard rate hours SR $ 9.75
Standard DL cost $ 9,750

Actual hours -AH $ 9,600

Standard hours cost- SH $ 9,750
Total material variance TMV $ 150 Favorable because is less than it should be

Rate variance RV
RV = AH(AR-SR)

AH 960
AR $ 10.0
SR $ 9.75
MPV $ 240.0 Unfavorable because we pay MORE per hour

Efficiency variance EV
EV=SR(AH-SR)

SR $ 9.75
AH 960
SR 1000
EV -$ 390.00 Favorable because we use less time

Total Labour Variance -TMV

TMV = RV+EV

EV $ -390.00
RV $ 240.00
TLV $ -150.00 Favorable
s than it should be

ay MORE per hour

se less time
Direct materials
Units toys 4200
Raw material per unit 8
Total raw material - SQ 33600

Material Price variance TMV

MPV = AQ(AP-SP)

AQ 25000
AP $ 0.6
SP $ 0.8
MPV $ -3,750.00 Favorable

Materials Quantity variance

MQV = SP(AQ-SQ)

SP $ 0.8
AQ 20000
SQ 33600
MQV $ -10,200.00 Favorable

Total Material Variance -TMV

TMV = MPV+MQV
We cannot do this calculations because the quantity is different (20000 vs 25000)
Direct labour
Total hours cost $ 52,000.00
Total hours 4000
Rate per hour $ 13.00

Units toys 4200

Hour per unit 0.9
$ 3,780

Rate variance RV
RV = AH(AR-SR)

AH 4000
AR $ 13.0
SR $ 12.00
MPV $ 4,000.0 Unfavorable

Efficiency variance EV
EV=SR(AH-SR)

SR $ 12.00
AH 4000
SR $ 3,780
EV $ 2,640.00 Unfavorable

Total Labour Variance -TMV

TMV = RV+EV

EV $ 2,640.00
RV $ 4,000.00
TLV $ 6,640.00 Unfavorable
 because we pay less

because we use less

nt (20000 vs 25000)
because we pay MORE per hour

because we use MORE time

AQ Kg 31000 kg
SQ 45 kg x 720 units 32400 kg
AP 251720/31000kg $ 8.12
SP $ 8.00

AH 4800 h
SH 6 h * 720 units 4320 h
AR $ 28.50
SR $ 30.00

Direct materials

Material Price variance TMV

MPV = AQ(AP-SP)
AQ 31000.00
AP $ 8.12
SP $ 8.00
MPV $ 3,720.00 Unfavorable

Materials Quantity variance

MQV = SP(AQ-SQ)

SP $ 8.0
AQ 31000
SQ 32400
MQV $ -11,200.00 Favorable

Total Material Variance -TMV

TMV = MPV+MQV

MQV $ -11,200.00
MPV $ 3,720.00
TMV -7480.00000000002 Favorable

Rate variance RV
RV = AH(AR-SR)

AH 4800
AR $ 28.5
SR $ 30.00
MPV -$ 7,200.0 Favorable

Efficiency variance EV
EV=SR(AH-SH)

SR $ 30.00
AH 4800
SH $ 4,320
EV $ 14,400.00 Unfavorable

Total Labour Variance -TMV

TMV = RV+EV

EV $ 14,400.00
RV $ -7,200.00
TLV $ 7,200.00 Unfavorable
because we pay MORE

because we use less

because we pay LESS per hour

because we use MORE time

AQ 12000 ml - 2500 ml 9500 ml
SQ 3750 units x 2,5 ml per unit 9375 ml
AP $225000/12000 ml $ 18.75 per ml
SP $ 20.00 per ml

AH 35 EE x 160 h 5600 h
SH 3750 units x 1,4 h 5250 h
AR $ 12.00
SR $ 12.50

Direct materials

Material Price variance TMV

MPV = AQ(AP-SP)

AQ (purchased) 12000.00
AP $ 18.75
SP $ 20.00
MPV $ -15,000.00 Favorable

Materials Quantity variance

MQV = SP(AQ-SQ)

SP $ 20.0
AQ (production) 9500
SQ 9375
MQV $ 2,500.00 Unfavorable

Total Material Variance -TMV

TMV = MPV+MQV
We cannot do this calculations because the quantity is different (12000 vs 9500)

Rate variance RV
RV = AH(AR-SR)

AH 5600
AR $ 12.0
SR $ 12.50
MPV -$ 2,800.0 Favorable

Efficiency variance EV
EV=SR(AH-SH)

SR $ 12.50
AH 5600
SH $ 5,250
EV $ 4,375.00 Unfavorable
Total Labour Variance -TMV
TMV = RV+EV

EV $ 4,375.00
RV $ -2,800.00
TLV $ 1,575.00 Unfavorable
 because we pay LESSS

because we use MORE

nt (12000 vs 9500)

because we pay LESS per hour

because we use MORE time

AQ 12000 plates 12000 plates
SQ (1800+2400)test x 2 plates 8400 Plates
AP $28200/12000 plate $ 2.35 per plate
SP $ 2.50 per ml

AH 1150 h
SH (0,3x1800)+(0,15x2400) 900
AR $13800/1150h $ 12.00
SR $ 14.00
128.12
Direct materials

Material Price variance TMV

MPV = AQ(AP-SP)

AQ (purchased) 12000.00
AP $ 2.35
SP $ 2.50
MPV $ -1,800.00

Materials Quantity variance

MQV = SP(AQ-SQ)

SP $ 2.5
AQ (production) 10500
SQ 8400
MQV $ 5,250.00

Total Material Variance -TMV

TMV = MPV+MQV
We cannot do this calculations because the quantity is different (12000 vs 10500)

Rate variance RV
RV = AH(AR-SR)

AH 1150
AR $ 12.0
SR $ 14.00
MPV -$ 2,300.0

Efficiency variance EV
EV=SR(AH-SH)

SR $ 14.00
AH 1150
SH $ 900
EV $ 3,500.00

Total Labour Variance -TMV

TMV = RV+EV
EV $ 3,500.00
RV $ -2,300.00
TLV $ 1,200.00
10500 used
Favorable because we pay LESSS

Unfavorable because we use MORE

Favorable because we pay LESS per hour

Unfavorable because we use MORE time

Unfavorable
Question 1
Glenn’s Draperies manufactures curtains. A standard window requires the following inputs:
Direct materials standard 10 sq. metres at $5 per metre
Direct Labour standard 5 hours at $10 per hour
During the second quarter the company made 1,500 curtains and purchased and used 14,000 sq. metres of fabric costing $68
Required:
a. Compute the direct material price and quantity variances for the quarter.
b. Compute the direct labour rate and efficiency variances for the quarter.

AQ 14000 m2
SQ 1500 x 10 15000 m2
AP $68600/14000 $ 4.90 m2 per window
SP $ 5.00 Per window

AH 7600 h
SH 1500 x 5 7500 h
AR 79800/7600 $ 10.50 per h
SR 5 hours at $10 per hour $ 10.00 per h

Direct materials

Material Price variance TMV

MPV = AQ(AP-SP)

AQ (purchased) 14000.00
AP $ 4.90
SP $ 5.00
MPV $ -1,400.00 Favorable

Materials Quantity variance

MQV = SP(AQ-SQ)

SP $ 5.0
AQ (production) 14000
SQ 15000
MQV $ -5,000.00 Favorable

Total Material Variance -TMV

TMV = MPV+MQV

MQV $ -5,000.00
MPV $ -1,400.00
TMV -6400 Favorable

Rate variance RV
RV = AH(AR-SR)

AH 7600
AR $ 10.5
SR $ 10.00
MPV $ 3,800.0 Unfavorable

Efficiency variance EV
EV=SR(AH-SH)

SR $ 10.00
AH 7600
SH $ 7,500
EV $ 1,000.00 Unfavorable

Total Labour Variance -TMV

TMV = RV+EV

EV $ 1,000.00
RV $ 3,800.00
TLV $ 4,800.00 Unfavorable
metres of fabric costing $68,600. Direct Labour totaled 7,600 hours for $79,800.

because we pay LESSS

because we use LESSS

because we pay MORE per hour

because we use MORE time

2m 75000 g
2.4 70000 used
$ 3.00
7.2

AQ 14000 m2
SQ 1500 x 10 15000 m2
AP $68600/14000 $ 4.90 m2 per window
SP $ 5.00 Per window

AH 7600 h
SH 1500 x 5 7500 h
AR 79800/7600 $ 10.50 per h
SR 5 hours at $10 per hour $ 10.00 per h

Direct materials

Material Price variance TMV

MPV = AQ(AP-SP)

AQ (purchased) 75000.00
AP $ 0.25
SP $ -
MPV $ 18,750.00 Unfavorable

Materials Quantity variance

MQV = SP(AQ-SQ)

SP $ 5.0
AQ (production) 14000
SQ 15000
MQV $ -5,000.00 Favorable

Total Material Variance -TMV

TMV = MPV+MQV

MQV $ -5,000.00
MPV $ 18,750.00
TMV 13750 Favorable

Rate variance RV
RV = AH(AR-SR)

AH 7600
AR $ 10.5
SR $ 10.00
MPV $ 3,800.0 Unfavorable

Efficiency variance EV
EV=SR(AH-SH)

SR $ 10.00
AH 7600
SH $ 7,500
EV $ 1,000.00 Unfavorable

Total Labour Variance -TMV

TMV = RV+EV

EV $ 1,000.00
RV $ 3,800.00
TLV $ 4,800.00 Unfavorable
because we pay MORE per hour

because we use LESSS

because we pay MORE per hour

because we use MORE time

Question 1
Glenn’s Draperies manufactures curtains. A standard window requires the following inputs:
Direct materials standard 10 sq. metres at $5 per metre
Direct Labour standard 5 hours at $10 per hour
During the second quarter the company made 1,500 curtains and purchased and used 14,000 sq. metres of fabric costing
Required:
a. Compute the direct material price and quantity variances for the quarter.
b. Compute the direct labour rate and efficiency variances for the quarter.

AQ 97000 kg
SQ 90 kg x 1050 units 94500 kg
AP $368600/97000kg $ 3.80 per kg
SP $ 4.00 per kg

AH 4100 h
SH 4 h x 1050 units 4200 h
AR $110700/4100 h $ 27.00 per h
SR $ 25.00 per h

Direct Labour

Rate variance RV
RV = AH(AR-SR)

AH 4100
AR $ 27.0
SR $ 25.00
MPV $ 8,200.0 Unfavorable
because we pay MORE per hour
Efficiency variance EV
EV=SR(AH-SH)

SR $ 25.00
AH 4100
SH $ 4,200
EV -$ 2,500.00 Favorable
because we use LESS time
Total Labour Variance -TMV
TMV = RV+EV

EV $ -2,500.00
RV $ 8,200.00
TLV $ 5,700.00 Unfavorable
 inputs:

ed 14,000 sq. metres of fabric costing $68,600. Direct Labour totaled 7,600 hours for $79,800.

ay MORE per hour

e LESS time
Question 2
Flandro Company uses a standard cost system and the standard cost card for the company’s only product is as follows:
Direct Materials, 3 metres at $4.80/m. $14.40
Direct Labour, 2 hours at $14.00/hr. $28.00
During the year, the company produced 6000 units of product and incurred the following costs:
Materials purchased, 24,000 metres at $5.10/m. $122,400
Materials used in production (metres) 18,500
Direct labour cost incurred, 11,600 hours at $15.00/hr. $174,000
Required:
a) Prepare the variances for direct materials for the year. (4 marks)
b) Prepare the variances for direct labour for the year. (4 marks)
c) Prepare a possible explanation for the variances. (4 marks)

AQ 24000 m 18500
SQ 6000x3 18000 m
AP $ 5.10 per m
SP 3 metres at $4.80/m. $ 4.80 per m

AH 11600 h
SH 6000x2 12000 h
AR 174000/11600 $ 15.00 per h
SR 2 hours at $14.00/hr. $ 14.00 per h

Direct materials

Material Price variance TMV

MPV = AQ(AP-SP)

AQ (purchased) 24000.00
AP $ 5.10
SP $ 4.80
MPV $ 7,200.00 Unfavorable

Materials Quantity variance

MQV = SP(AQ-SQ)

SP $ 4.8
AQ (production) 18500
SQ 18000
MQV $ 2,400.00 Unfavorable

Total Material Variance -TMV

TMV = MPV+MQV
We cannot do this calculations because the quantity is different (24000 vs 18500)

Rate variance RV
RV = AH(AR-SR)

AH 11600
AR $ 15.0
SR $ 14.00
MPV $ 11,600.0 Unfavorable

Efficiency variance EV
EV=SR(AH-SH)

SR $ 14.00
AH 11600
SH $ 12,000
EV -$ 5,600.00 Favorable

Total Labour Variance -TMV

TMV = RV+EV

EV $ -5,600.00
RV $ 11,600.00
TLV $ 6,000.00 Unfavorable
s only product is as follows:

osts:

used

because we pay MORE

because we use MORE

because we pay MORE

because we use LESSS

because we pay MORE