1.

Direct materials
a Total materials spending variance =Materials quantity variance + the price variance
300 = 1,200+ the price variance
=> The price variance 1,500 F
Materials price varriance =(AQ*AP) - (AQ*SP)
1500 =16,500- (6,000*SP)
=> SP 3
b Materials quantity varriance =(AQ*SP) - (SQ*SP)
1,200 =(6,000*3) - (SQ *3)
=> SQ 5,600
c Standard cost per unit =Standard quantity * standard price
12

2.Direct labor
a Labor efficiency variance =(AH*SR) - (SH*SR)
4,600 =(AH*9) - (2.5*1,400*9)
=> AH 2,989
Total direct labor cost 9.53
b Labor rate variance =(AH*AR) - (AH*SR)
1,599
1
Total standard cost for units 21,000
Less standard cost of labor and overhead
Direct labor (8,000) Given
Variable manufacturing overhead (1,600) Given
Standard cost of materials 11,400

2
Standard cost of materials 11,400
Number of units produced 500
Standard cost per kit 22.80
Standard cost per yard 6.00 Given
Yards per kit 3.80

3
Actual cost of material used 10,000
Standard cost of material used 11,400
Total variance 1,400 F

Price variance 2,000 F

Quantity variance 600
Total variance 1,400

4
Standard mfg. variable overhead cost 1,600 Given
Standard mfg. variable overhead cost per direct labor 2 Given
Standard direct labor-hours 800
Total standard labor cost 8,000 Given
Standard direct labor rate per hour 10

5
Actual labor cost for the month
Actual cost per kit produced 42.17
Number of kits produced 500
Total actual cost of production 21,070
Less: Actual cost of materials 10,000
Actual cost of mfg. variable overhead (1,620) 11,620
Actual cost of direct labor 9,450

Actual hours Actual rate Standard rate

900 10.50 10.00

Rate varriance 450 U

Efficiency Variance 1,000 U
Total Variance 1,450 U

6
Actual hours Actual rate Standard rate
900 1.80 2.00

Spending Variance (180) F

Efficiency Variance 200 U
Total Variance 20 U

7
Standard Qty Standard
Standard cost
or hours price or rate
Direct material (yards) 3.80 6 22.80
Direct labor (hours) 1.60 10 16.00
Variable overhead (hours) 1.60 2 3.20
Total standard cost per kit 42.00
AH*AR AH*SR Standard cost
9,450 9,000 8,000
AH*AR AH*SR Standard cost
1,620 1,800 1,600
 Actual quantity*actual Actual quantity*standard
price/rate price/rate
Direct materials 36,000 39,000
Direct labor 7,600 6,840
Variable overhead 3,800 2,280

Material variances
Formula Variance
Total material variance (AQ*AP) - (SQ*SP) (400)
Material price variance (AQ*AP) - (AQ*SP) (3,000)
Material quantity variance (AQ*SP) - (SQ*SP) 2,600

Labor variances
Formula Variance
Total labor variance (AH*AR) - (SH*SR) 400
Labor rate variance (AH*AR) - (AH*SR) 760
Labor efficiency variance (AH*SR) - (SH*SR) (360)

Variable overhead variance

Formula Variance
Total variable overhead variance
(AH*AR) - (SH*SR) 1,400
Variable overhead rate variance (AH*AR) - (AH*SR) 1,520
Variable overhead efficiency
variance (AH*SR) - (SH*SR) (120)
Standard cost for
actual production
36,400
7,200
2,400
1. Standard cost
Alpha 8
Direct materials - (X342) 6.30
Direct materials- (Y561) 2.80
Direct labor- Sintering 4.00
Direct labor- Finishing 15.20
Total 28.30

Zeta 9
Direct materials - (X342) 10.5
Direct materials- (Y561) 6.3
Direct labor- Sintering 7
Direct labor- Finishing 17.1
Total 40.9
2
Alpha 8
Direct Materials Variances- Materials X342
Actual price 3.70
Materials price variance=AQ(AP-SP) 2,800
Standard quantity 8,700
Materials quantity variance=SP(AQ-SQ) (700)

Zeta 9
Direct Materials Variances- Materials Y561
Actual price 1.3
Materials price variance=AQ(AP-SP) (1,950)
Standard quantity 12,000
Materials quantity variance=SP(AQ-SQ) 1,400
3
Alpha 8
Direct labor Variances -X342
Labor rate variance=AH(AR-SR) 3,000
Standard hours 11
Labor efficiency variance=SR(AH-SH) 23,780

Zeta 9
Direct labor Variances -Y561
Labor rate variance=AH(AR-SR) 5,700
Standard hours 32.3
Labor efficiency variance=SR(AH-SH) 53,536.3