R The standard cost card for a unit of Product AX at the Cleaning Chemicals Corp. shows the following standard cost information: 0 ences Materials: 4 gallons at $4 per gallon Labor: 3 hours at $14 per hour Overhead: 40% of direct labor Total $16 42 17 $75 During the month of October 20X1, Job O-3 was completed. It was the only job worked on during October. Five thousand three hundred units were produced from the job. The actual costs were as shown below: Materials: 21,400 gallons at $4.10 per gallon Labor: 16,000 hours at $14.10 per hour Actual overhead Total Standard price for materials Actual price for materials Actual usage Total price variance for materials $ 87,740 225,600 90,240 $403,580 Required: Calculate the price variance for materials for the month. (Indicate the effect of the variance by selecting "Favorable", "Unfavorable", and "None" for no effect (i.e., zero variance).)
R The standard cost card for a unit of Product AX at the Cleaning Chemicals Corp. shows the following standard cost information: 0 ences Materials: 4 gallons at $4 per gallon Labor: 3 hours at $14 per hour Overhead: 40% of direct labor Total $16 42 17 $75 During the month of October 20X1, Job O-3 was completed. It was the only job worked on during October. Five thousand three hundred units were produced from the job. The actual costs were as shown below: Materials: 21,400 gallons at $4.10 per gallon Labor: 16,000 hours at $14.10 per hour Actual overhead Total Standard price for materials Actual price for materials Actual usage Total price variance for materials $ 87,740 225,600 90,240 $403,580 Required: Calculate the price variance for materials for the month. (Indicate the effect of the variance by selecting "Favorable", "Unfavorable", and "None" for no effect (i.e., zero variance).)
Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter8: Standard Cost Accounting—materials, Labor, And Factory Overhead
Section: Chapter Questions
Problem 10E: Standard unit cost and journal entries The normal capacity of Algonquin Adhesives Inc. is 40,000...
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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