Pet Palace

Direct Material Price Variance

=Actual quantity (Actual price- Std. price)

= 140($1.06-$1)

= $8.4 (U)

Direct Material Quantity Variance

= Std. Price (Actual Quantity -Std. Quantity)

= $1(140- 28*5)

= $0 ok

Direct Material Spending Variance

= $8.4 (U) ok

No total material spending variance can be determined because the

amount of material purchased the amount used

Calculate the Rate and Efficiency Variances for Direct Labor for the Pet Palaces, Dog Dens, and Cat Castles. That is 6 variances. Show the total Lab

1) Labor rate variance

= Ah * (AR-SR)

= 66 hrs ($19.40- $ 19.40)

 =$0 ok

2) Labor efficiency variance

= SR *(AH-SH)

= $19.40 (66 - 28*2.4)

=$23.28(F) ok

Direct laborSpending Variance

=$23.28(F) ok

Calculate the Rate and Efficiency Variances Variable Overhead Variances for Pet Palaces, Dog Dens, and Cat Castles. That is 6 variances . Show th

1) Variable Overhead rate variance

= Ah * (AR-SR)

= ($32.50- $66* .50)

=$.5 (F) ok

2) Variable Overhead efficiency variance

= SR *(AH-SH)

.5(66-28*2.4) =

=$.6(F) ok

Variable Overhead Spending Variance

=$5.6 (F)

PART B: INTERPRETATION
After the calculating the variances, interpret their meaning by: (1) Offering a conclusion on how the Production Supervisor for each product is doin
There are 3 Production Supervisors, one for each product. (2) Offering a conclusion on how the Purchasing Manager for all raw materials is doing.
The question asks about these managers and how they are doing.
 Dog Den

Direct Material Price Variance

=Actual quantity (Actual price- Std. price)

= 190($3.24-$3.25)

= $1.9 (F) ok

Direct Material Quantity Variance

= Std. Price (Actual Quantity -Std. Quantity)

= $3.25 ( Act Q from Job Sheet

minus
Standard Q sq ft of carpet allowed for Actual output of 50 dens)
3.25*(212-50*4)=

= $39(U)

Direct Material Spending Variance

= $37.1 (U)

ng variance can be determined because the

hased the amount used

og Dens, and Cat Castles. That is 6 variances. Show the total Labor Spending Variance for each product.

1) Labor rate variance

= Ah * (AR-SR)

= 121 hrs ($20.52- $ 19.40)

 =$135.52 (UF) ok

2) Labor efficiency variance

= SR *(AH-SH)

= $19.40 (121 -50*2.3)

=$116.4(UF) ok

Direct laborSpending Variance

=$251.92 U

Palaces, Dog Dens, and Cat Castles. That is 6 variances . Show the total Variable Overhead Spending Variance for each product..

1) Variable Overhead rate variance

= Ah * (AR-SR)

= ($60- 121*.48)

=$1.92(U)

2) Variable Overhead efficiency variance

= SR *(AH-SH)

= $.48(121 -50*2.3)
Equation is right
=$2.88(UF)

Direct laborSpending Variance

=$.4.8 (U)

usion on how the Production Supervisor for each product is doing

on on how the Purchasing Manager for all raw materials is doing. Peters Pet Toys has one single, company-wide Purchasing Manager.
Favorable price variance should be reported to the purchasing manager who is
responsible for negotiating the good price for the company
For favorable quantity variance the production manager
is responsible for the efficiency of the workers for producing good quality
of material .
 Cat Castle

Direct Material Price Variance

=Actual quantity (Actual price- Std. price)

= 350($2.55-$2.80)

= $87.5 (F) ok

Direct Material Quantity Variance

= Std. Price (Actual Quantity -Std. Quantity)

= $2.80 ( Act Q from Job Sheet

minus
Standard Q bd feet of wood allowed for Actual output of 64 castles)

2.8*(400-64*6)=

= $44.8(U)

Direct Material Spending Variance

= $42.7 (F)

or each product.

1) Labor rate variance

= Ah * (AR-SR)

= 188 hrs ($18.71- $ 19.40)

 =$129.72 (F) ok

2) Labor efficiency variance

= SR *(AH-SH)

= $19.40 (188 -64*3.1)

=$201.76 (F) ok

Direct laborSpending Variance

=$331.48 (F) ok

d Spending Variance for each product..

1) Variable Overhead rate variance

= Ah * (AR-SR)

= ($84- 188*.46)

=$2.48 (F)

2) Variable Overhead efficiency variance

= SR *(AH-SH)

= $.46(188 -64*3.1)

=$4.78 (F)

Direct laborSpending Variance

=$7.26 (F)

e single, company-wide Purchasing Manager.

anager who is

quality