lexible budgeting and variance analysis
I'm really Cold Coat Company makes women's and men's coals. Both products require filler and lining material. The following planning information has been made available:
|
Women's Coats |
Men's Coats |
Standard Price per unit |
Filler |
4.0lb |
5.2lb |
$2.00 per lb |
Linear |
7.0yds |
9.4yds |
8.00 per yd. |
Standard labor time |
0.40hr. |
0.50hr |
|
|
Women s coats |
Men's coats |
|
Planned Production |
5.000 units |
6,200 units |
|
Standard labor rate |
S14.00 per hr, |
$13.00 per hr. |
|
I am Really Cold Coal Company does not expect there to be any beginning or ending inventories of filler and lining material. At the end of the budget year. I'm Really Cold Coal Company experienced the following actual results:
|
Women's coat |
Men's Coats |
Actual Production |
4.400 |
5,800 |
|
Actual Price per unit |
Actual Quantatity Purchased and Used |
Filler |
$1.90 per lb |
48.000 |
Liner |
8.20 per yd. |
85,100 |
|
Actual Labor Rate |
Actual Labor Hours Used |
Women's Coats |
$14.10 Per hr. |
1.825 |
Men's Coats |
13.30 Per hr |
2,800 |
The expected begining inventory and desired ending inventory were realized.
Instructions
1. Prepare the following variance analyses for both coats and the total, based on the actual results and production levels at the end of the budget year:
a. Direct materials price, quantity and total variance analyses for both coats and the total, based on the actual results and production levels at the end of the budget year:
a. Direct materials price quantity and totoal variance
b. Direct labor rate, time and total variance
2. Why are the standard amount in part (1) based on the actual production at the end of the year instead of the planned production at the beginning of the year.