Exercise 4 – Standard Costing & Variance Analysis BA 213 – Winter 2019 Due: Tuesday, March 12 Snow Sports Inc (SSI) manufactures and sells downhill skis. Information about their standard costs and...

Exercise 4 completed in Excel


Exercise 4 – Standard Costing & Variance Analysis BA 213 – Winter 2019 Due: Tuesday, March 12 Snow Sports Inc (SSI) manufactures and sells downhill skis. Information about their standard costs and recent results is below. SSI’s master budget and standard costs were based on planned production and sales of 1,800 units. Required: 1. Calculate the direct material price, quantity and spending variances 2. Calculate the direct labor rate, efficiency and spending variances 3. Calculate the variable overhead rate, efficiency and spending variances 4. Calculate the fixed overhead spending (budget) variance 5. Based on your analysis, which manager/s did the best during the period? Please submit a paper copy at the start of class clearly displaying your work related to the requirements listed above. Feel free to list any assumptions that you would like to highlight. We’ll review your results in class, so I recommend you bring a 2nd copy of your work to take notes. Standard Standard Price Standard Unit SSI Standard cost information Quantity (rate) Cost Direct material (blend of fiberglass & wood) 11 sq. ft. $6 per sq. ft. $66.00 Direct labor 8 hours $18 per hr $144.00 Variable manufacturing overhead 8 hours $4 per hr. $32.00 (based on direct labor hours) Fixed manufacturing overhead $35.00 ($63,000 / 1,800 units = $35) SSI had the following actual results for the period: Number of units produced and sold 1,750 Number of square feet of fiberglass & wood used 20,125 Cost of fiberglass & wood used $116,725 Number of direct labor hours worked 14,700 Direct labor cost $279,300 Variable overhead cost $63,210 Fixed overhead cost $61,000