The Standard Costs for a Unit of Product Are Shown

question 116

Short Answer

The standard costs for a unit of product are shown below.
$$\begin{array} { l l r } \text { Materials: } & 4 \text { pounds at } \$ 1.80 \text { per pound } & \$ 7.20 \\\text { Labor: } & 80 \text { hours at } \$ 13.00 \text { per hour } & 10.40 \\\text { Overhead: } & 65 \% \text { of direct labor } & 6.76\end{array}$$
During July, Job N-5 for 200 units was completed. The actual costs of the job are shown below.
$$\begin{array} { l l r } \text { Materials: } & 823 \text { pourds at } \$ 1.86 \text { per pound } & \$ 1,530.78 \\\text { Lubor: } & 157 \text { hours at } \$ 13.13 \text { per hour } & 2,061.41 \\\text { Overhead Applied: } & 65 \% \text { of direct labor } & 1,339.92\end{array}$$
1. What is the total cost variance between actual cost and standard cost?
2. What is the total material variance?
3. What is the material quantity variance?
4. What is the material price variance?

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Definitions:

Raw Ingredients

Basic and unprocessed materials used in the manufacture or production of goods.

Activity-Based Costing

A costing method that assigns costs to products or services based on the activities and resources that go into producing them, aiming to more accurately reflect the costs incurred.

Complexity-Related

Pertaining to factors or expenses that arise from the complexity of operations, products, or systems.

Size-Related

Refers to attributes or decisions that are affected by the scale or volume, such as adjustments in operational capacity or costs that vary with company size.