Planned volume for year (static budget)

4,100

units

Standard direct materials cost per unit

4.00

pounds

@

$

1.50

per pound

Standard direct labor cost per unit

3.90

hours

@

$

3.10

per hour

Total expected fixed overhead costs

$

21,320

Actual volume for the year (flexible budget)

4,300

units

Actual direct materials cost per unit

3.50

pounds

@

$

2.00

per pound

Actual direct labor cost per unit

4.10

hours

@

$

2.60

per hour

Total actual fixed overhead costs

$

16,920

A. Prepare a materials variance information table showing the standard price, the actual price, the standard quantity, and the actual quantity.

Materials Variance Information Table
Standard price		per pound
Actual price		per pound
Standard quantity for flexible budget		pounds
Actual quantity used		pounds

B. Calculate the materials price and usage variances.

Material price variance		U
Material usage variance		F

C. Prepare a labor variance information table showing the standard price, the actual price, the standard hours, and the actual hours.

Labor Variance Information Table
Standard price		per hour
Actual price		per hour
Standard hours for flexible budget
Actual hours used

D. Calculate the labor price and usage variances.

Labor price variance		F
Labor usage variance		U

E.Calculate the predetermined overhead rate, assuming that Thornton uses the number of units as the allocation base.

F. Calculate the fixed cost spending variance.

G. Calculate the fixed cost volume variance.

e.	Predetermined overhead rate		per unit
f.	Fixed cost spending variance		F
g.	Fixed cost volume variance		F