Lobo Co . is evaluating its recent performance by comparing current results to the budget. They request
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Question:
Lobo Co is evaluating its recent performance by comparing current results to the budget. They request your assistance in calculating both direct material and labor variances, providing you with standard and actual cost data.
Here is the standard cost information:
Standard Cost per DMHour Standard QtyHrs per Unit Standard Cost per Unit
Direct Materials $ $
Direct Labor $ $
Variable Overhead $ $
Planned production units
Actual cost information is below:
Units Produced
Materials Purchased and Used
Cost of Direct Materials $
Direct Labor Hours
Direct Labor Cost $
Variable Overhead Cost $
Fixed Overhead Cost $
PART #: Direct Material Variances
Calculate the Materials Price, Quantity, and Spending Variance.
Remember, with variances we don\'t care about the sign of the number we care about the interpretation of the variance. Use the ABS function to calculate the absolute value of variance amounts in the green cells and use an IF function in the orange cells to determine the favorability U or F of the variances Remember to cell reference everything!
Direct Materials Variances
Actual times Actual Actual times Standard Standard times Standard
AQ AP AQ SP SQ SP
PART #: Direct Labor Variances
Calculate the Direct Labor Rate, Efficiency, and Spending Variance.
Use the ABS function to calculate the absolute value of variance amounts in the green cells and use an IF function in the orange cells to determine the favorability U or F of the variances Remember to cell reference everything!
Direct Labor Variances
Actual times Actual Actual times Standard Standard times Standard
AH AR AH SR SH SR
Labor Rate Variance Labor Efficiency Variance
Labor Spending Variance
Related Book For
Management Accounting Information for Decision-Making and Strategy Execution
ISBN: 978-0137024971
6th Edition
Authors: Anthony A. Atkinson, Robert S. Kaplan, Ella Mae Matsumura, S. Mark Young
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