std rate kg $4 $4

std quantity per unit 40g/1000 = 0.04kg 0.04kg

actual production 100000 units
actual rate per kg $5.25
revised std. rate per kg 20% increase $4.8
actual qty per unit 35/1000 = 0.03kg 0.035kg
revised std. qty per unit 5% increase 0.042kg

material price planning variance

std rate revised std rate difference
4 4.8 -0.8
material rate operational variance
revised std rate per kg actual rate difference
4.8 5.25 -0.45
material usage planning variance
std quantity for actual prod. revised std quantity difference
0.04x100000=4000 4200 -200
material usage operational variance
revised std quantity actual qty purchased difference
4200 3500 700

total variance -2375 Adverse

net operational variance 1225 Favorable

The total mateiral variance that is attributed to production manager is 2375 adverse. This indicated that the producti

Further investigation reveal that the material price planning variance is 2800 adverse. This is because of the fact tha

on th eother hand, material usafe planning variance is 800 adverse. The standard size of the security card was chang

In order ot asses the performance, planning variances should be ignored because hey are uncontrollable. The net op

Ex 69:
batch units 16
standard rate per hour $12
std hrs per unit 0.5hrs
actual production 20500units
actual total hrs 12000hrs
actual labor cost 136800
actual rate per hr 11.4/hr
revised rate 5% decrease 12x95% 11.4/hr
revised std hours per unit 0.6/hr

Labor rate planning variance

std rate per hour revised std rate per hr difference
$12 $11.4 0.6
Labor rate operational variance
revised std rate per hr actual rate per hr difference
$11.4 $11.4 0
Labor efficiency planning variance
std hour revised std hr difference
10250 12300 -2050
Labor efficiency operational variance
revised std hr actual hrs difference
12300 12000 300

total variance -13800 Adverse

net operational variance 3600 Favorable

The labor rate planning variance is favorable due to the 5% pay cut done with immediate affect; this reduced the rat

Material mix variance

Materials Standard/Budget actual qty in standard mix
Material Yield variance
Materials Standard/Budget standard quantity in standard mix

pg117, choc co
Material usage variance
Materials actual quantity in actual mix standard quantity in standard mix
honey 2200
sugar 1400
syrup 1050
4650

Material mix variance

Materials Standard/Budget actual qty in standard mix
honey 20
sugar 15
syrup 10
45
Material Yield variance
Materials Standard/Budget standard quantity in standard mix
honey 20
sugar 15
syrup 10
45
pg116, block co
sales mix variance
Materials Standard/Budget actual sales in standard mix
commodity 1 30000
commodity 2 28000
commodity 3 26000
84000

sales quantity variance

Materials Standard/Budget actual sales in actual mix
commodity 1 30000
commodity 2 28000
commodity 3 26000
84000
standard profit
products sp
commodity 1 30
commodity 2 35
commodity 3 41.6
 actual qty purchased variance
0.035x100000= 3500 -2800 Adverse

actual qty purchased variance

3500 -1575 Adverse

std rate per kg variance

4 -800 Adverse

std rate per kg variance

4 2800 Favorable

adverse. This indicated that the production manager has overspent 2375 and that has resulted in reduction of actual profits by

adverse. This is because of the fact that the world oil proces have increased during the year that pushed up the price of the pl

dard size of the security card was changed during the year an it required 5% more plastic to be used in manufacturing. Materia

ause hey are uncontrollable. The net operational variance is 1225 favorable, thus the managers work is satisfactory.
 actual hrs paid variance
12000 7200 Favorable

actual hrs paid variance

12000 0 nil

std rate variance

12 -24600 Adverse

std rate variance

12 3600 Favorable

h immediate affect; this reduced the rate per hour, causing a 7200 favorable.

ctual qty in standard mix actual quantity in actual mix difference x std rate per kg

tandard quantity in standard mix actual qty in standard mix difference x std rate per kg

tandard quantity in standard mix difference x std rate per kg variance

2020
1515
1010
4545

ctual qty in standard mix actual quantity in actual mix difference x std rate per kg
2067 2200 -133.33 20
1550 1400 150 30
1050 1050 -16.67 25
4650 4650
tandard quantity in standard mix actual qty in standard mix difference x std rate per kg
2020 2067 -46.67 20
1515 1550 -35 30
1010 1050 -23.33 25
4545 4650

ctual sales in standard mix actual sales in actual mix difference x std profit per unit
30643 29800 843 11.2
28600 30400 -1800 4.2
26557 25600 957 12
85800 85800 27.4

ctual sales in actual mix actual sales in standard mix difference x std profit per unit
29800 30643 -843 11.2
30400 28600 1800 4.2
25600 26557 -957 12
85800 85800 0 27.4

vc fc(multiplied by oar) profit

-18 0.8 11.2
-28.4 -2.4 4.2
-26.4 -3.2 12
 reduction of actual profits by the same amount.

pushed up the price of the plastic by 20%. Similarly, the materia price operational variance is also 1575 adverse. This variance h

ed in manufacturing. Material usage operational variance is however favorable. This is because of better quality materials lead

work is satisfactory.
variance

variance

variance
-2667 Adverse
4500 Favorable
-417 Adverse
1416 Favorable
variance
-933 Adverse
-1050 Adverse
-583 Adverse
-2567 Adverse

variance
9441.6 Favorable
-7560 Adverse
11484 Favorable
13365.6 Favorable

variance
-9441.6 Adverse
7560 Favorable
-11484 Adverse
-13365.6 Adverse
1575 adverse. This variance has occurred because th eproduction manager had changed the supplier and bought a better quali

better quality materials leading to less wasteage.

upplier and bought a better quality supplier at a higher rate charge.