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A、company produces and sells one product only, the Thing, the standard cost for one unit being as follows. $ Direct material
A、– 10 kilograms at $20 per kg 200 Direct material
B、– 5 litres at $6 per litre 30 Direct wages – 5 hours at $6 per hour 30 Fixed production overhead 50 Total standard cost 310 The fixed overhead included in the standard cost is based on an expected monthly output of 900 units. Fixed production overhead is absorbed on the basis of direct labour hours. During April the actual results were as follows. Production 800 units Material
A、7,800 kg used, costing $159,900 Material
B、4,300 litres used, costing $23,650 Direct wages 4,200 hours worked for $24,150 Fixed production overhead $47,000 29 【论述题】 Calculate price and usage variances for each material.
A、company produces and sells one product only, the Thing, the standard cost for one unit being as follows. $ Direct material
A、– 10 kilograms at $20 per kg 200 Direct material
B、– 5 litres at $6 per litre 30 Direct wages – 5 hours at $6 per hour 30 Fixed production overhead 50 Total standard cost 310 The fixed overhead included in the standard cost is based on an expected monthly output of 900 units. Fixed production overhead is absorbed on the basis of direct labour hours. During April the actual results were as follows. Production 800 units Material
A、7,800 kg used, costing $159,900 Material
B、4,300 litres used, costing $23,650 Direct wages 4,200 hours worked for $24,150 Fixed production overhead $47,000 29 【论述题】 Calculate price and usage variances for each material.
【参考答案及解析】
Price variance – Material A Take the actual quantity of materials purchased/used and compare the actual prices paid for the materials with their standard price. $ 7,800 kg should have cost (× $20) 156,000 but did cost 159,900 Price variance (actual cost exceeds standard cost) 3,900 (A) Usage variance – Material A Take the actual quantity of units produced and compare the actual quantity of materials used in their production with the standard quantity that should have been used. The variance is converted into a monetary value at the standard price per unit of material. 800 units should have used (× 10 kg) 8,000 kg but did use 7,800 kg Usage variance in kg (actual usage less than standard) 200 (F) × standard cost per kilogram × $20 Usage variance in $ $4,000 (F) Price variance – Material B $ 4,300 litres should have cost (× $6) 25,800 but did cost 23,650 Price variance 2,150 (F) Usage variance – Material B $ 800 units should have used (× 5 l) 4,000 l but did use 4,300 l Usage variance in litres 300 (A) × standard cost per litre × $6 Usage variance in $ $1,800 (A)
Price variance – Material A Take the actual quantity of materials purchased/used and compare the actual prices paid for the materials with their standard price. $ 7,800 kg should have cost (× $20) 156,000 but did cost 159,900 Price variance (actual cost exceeds standard cost) 3,900 (A) Usage variance – Material A Take the actual quantity of units produced and compare the actual quantity of materials used in their production with the standard quantity that should have been used. The variance is converted into a monetary value at the standard price per unit of material. 800 units should have used (× 10 kg) 8,000 kg but did use 7,800 kg Usage variance in kg (actual usage less than standard) 200 (F) × standard cost per kilogram × $20 Usage variance in $ $4,000 (F) Price variance – Material B $ 4,300 litres should have cost (× $6) 25,800 but did cost 23,650 Price variance 2,150 (F) Usage variance – Material B $ 800 units should have used (× 5 l) 4,000 l but did use 4,300 l Usage variance in litres 300 (A) × standard cost per litre × $6 Usage variance in $ $1,800 (A)