The impact of variance on unit cost
Lander manufacrures a number of products the standard relating to one of these product are showing along with actual cost data 4 may
direct material standard-1.80 feet at 3.00 per foot standard cost per unit=5.40 actual 1.75 ft at 3.20 per foot=5.60
direct labor standard =0.90 at 18.00per hr standard cost per unit=16.20 actual=0.95 hr at 17.40. per hr actual cost per unit=16.53
variable overhead standard=0.90 hr at 5.00 per hr standard cost per unit=4.50 actual-0.95 hr at 4,60 per hr- actual cost per unit=4.37 total cost per unit standard cost per unit=26.10 actual cost per unit=26.50 excess of actual cost over standard cost per unit=0.40.the production manager was please when he saw this report and he said 0.40 excess cost is well within 2 percent limit management has set for acceptable variance and not to worry about this product actual production 4 the month was 12,000 unit
variable overhead cost is assign to products on the basis of direct labor hrs there were nobeginning or ending inventory ofmaterial
Prepar and compute the following variance 4 may
material price and quanity variance
labor rate and efficiency variance
variable overhead rate and efficiency variance
how much of the 0.40 excess unit cost is traceable to each of the variance compute above
how much of the 0.40 excess unit cost is traceable to apprerent inefficient use of labor time