Third-quarter results are in, and cost of goods sold is higher than anticipated. A direct material...
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Third-quarter results are in, and cost of goods sold is higher than anticipated. A direct material that had some variance in the quarter is the aluminum used in the Ride-Outs. You have decided to look at the flexible budget direct material variance related to this, as well as the flexible budget direct labour variance for all production. You have the following information to perform your analysis: Direct materials Direct labour Standard inputs for one unit of output 10.00 kg 8.00 hours Actual performance for the company is shown below: Actual output (in units): 1,371 Direct materials: Purchased and used Actual price per input Direct labour: Labour hours of input Actual price per hour 13,750 kg $39.40/kg Standard cost for one unit of input $32/kg $42/hour 11,500 hours $43.10/hour Calculate the flexible budget, rate, and efficiency variances for the direct materials and direct labour, and evaluate the results. Third-quarter results are in, and cost of goods sold is higher than anticipated. A direct material that had some variance in the quarter is the aluminum used in the Ride-Outs. You have decided to look at the flexible budget direct material variance related to this, as well as the flexible budget direct labour variance for all production. You have the following information to perform your analysis: Direct materials Direct labour Standard inputs for one unit of output 10.00 kg 8.00 hours Actual performance for the company is shown below: Actual output (in units): 1,371 Direct materials: Purchased and used Actual price per input Direct labour: Labour hours of input Actual price per hour 13,750 kg $39.40/kg Standard cost for one unit of input $32/kg $42/hour 11,500 hours $43.10/hour Calculate the flexible budget, rate, and efficiency variances for the direct materials and direct labour, and evaluate the results.
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Formulas Flexible Budget Variance FBV FBV Actual Inputs Standard Rate Flexible Budget Rate Variance RV RV Actual Inputs Actual Rate Actual Inputs Stan... View the full answer
Related Book For
Auditing An International Approach
ISBN: 978-0071051415
6th edition
Authors: Wally J. Smieliauskas, Kathryn Bewley
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