[im24qtpie]

I am taking this accounting class, and I am just not getting in. Could someone please help!

The following materials standards have been extablished for a particular raw material used in the company's sole product:

Standard quantity per unit of output... 1.0 pound
Standard price... $16.60 per pound

The following data pertain to operations concerning the product for the last month:

Actual materials purchased... 2,200 pounds
Actual cost of materials purchased... $34,650
Actual materilas used in production... 1,900 pounds
Actual output... 2,100 units

What is the materials quantity variance for the month?
A) $3,320 F
B) $3,150 F
C) $4,980 U
D) $4,725 U



The following labor standards have been extablished for a particular product:

Standard labor-hours per unit of output... 8.0 hours
Standard labor rate... $13.10 per hour

The following data pertain to operations concerning the product for the last month:

Actual hours worked... 4,000 hours
Actual total labor cost... $53,000
Actual output... 400 units

What is the materials quantity variance for the month?
A) $10,600 F
B) $11,080 F
C) $11,080 U
D) $10,480 U


The standard cost card of a particular product specifies that it requires 4.5 direct labor-hours at $12.80 per direct labor-hour. During March, 2,300 units of the product were produced and direct labor wages of $128,300 were incurred. A total of 11,700 direct labor-hours were worked. The direct labor variances for the month were:

Labor Rate Variance Labor Efficiency Variance
A) $4,180 F $14,804 U
B) $4,180 F $17,280 U
C) $21,460 F $17,804 U
D) $21,460 F $17,280 U

[Gator1087]

The first question is A.
Materials quantity variance, also called efficiency variance is the difference between how much direct materials you actually used in production and the amount that you should have used based on your budget multiplied by the budgeted price.
You actually used 1900 lbs to produce 2100 units. According to your budget you should have used 1 lb per unit or 2100 lbs, so you used 200 lbs less than you expected. 200 lbs multiplied by your budgeted cost per lb gives you 200x16.60, which equals 3320.

The second question the answer is D, but the question is phrased wrong. It should be direct labor quantity variance. You do the same thing as direct materials quantity variance except using labor hours instead of lbs.
(What you should have used- what you actually used) x price:
((8 x 400)-4000)(13.10)=-10,480

Question 3 is D
Quantity variance is calculated the same as before:
((4.5 x 2300)-11,700)(12.80)=-17280
Rate or price variance is just actual labor hours multiplied by actual price (which you don't need to calculate since it is just equal to wages incurred) subtracted from budgeted price multiplied by actual labor hours used.
(12.80 x 11,700)-128,300=21,460