Cox Engineering performs cement core tests in its lab. The following standards have been set for each core test performed:
Standard hours or quantity Standard price or rate
Direct Materials: 3 pounds $0.75/pound
Direct Labor: 0.4 hours $12 per hour
Variable manufacturing overhead: 0.4 hours $ 9 per hour
During March, the lab performed 2000 core tests. On March 1, no direct materials(sand) were on hand. Variable Manufacturing overhead is assigned to core tests on the basis of direct labor hours. The following events occurred during March:
*8600 pounds of sand were purchased at a cost of $7310
*7200 pounds of sand were used for core tests
*840 acutal direct labor hours were worked at a cost of $8610
*Actual variable manufacturing overhead incurred was $7200
Question !: What is the materials price variance for March.
I know that MPV = Actual Quantity(Acutal Price-Standard Price) and I thought that you use 8600 as actual quantity and .75 for standard price but don't know the actual price.
Question 2: What is the materials quantity variance for March?
MQV= Standard Price(Actual Quantity - Standard Quantity allowed for output)
Thus the standard price is .75 I think, and standard quantity is 3 pounds?
Question 3 What is the labor efficiency variance for March is:
LEV=Standard rate ( actual hours - standard hours allowed for output)
So, standard rate is $12 (actual hours of 840 -? )
Question 4 WHat is the variable overhead efficiency variance for march:
VOSV = actual hours (actual rate - standard rate). The acutal hours is 840 and the rate would be 7200 and the standard rate of $7310?
Thanks...
