Download - Budgetary control
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Budgetary ControlSTANDARD COST
All rights reservedAHMAD ROSLANFaculty business management and accountancy
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MATERIAL VARIANCES
A) Glacier Peak Outfitters has the following direct material standards for the fiberfill in its mountain parka
0.1 kg of fiberfill per parka at $5.00 per kg Last month, 210 kg of fiberfill were purchased and used to
make 2,000 parkas. The material cost a total of $1,029 Direct materials price. Quantity, and total spending
variances How to solve this problem?
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Basis formula
ACTUAL QUANTITY (AQ)
XACTUAL PRICE (AP)
ACTUAL QUANTITY (AQ)
XSTANDARD PRICE
(SP)
STANDARD QUANTITY (SQ)
XSTANDARD PRICE
(SP)
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Formula tips
ACTUAL QUANTITY X
ACTUAL PRICE
ACTUAL QUANTITYX
STANDARD PRICE
STANDARD QUANTITY
XSTANDARD PRICE
ACTUAL QUANTITY X
ACTUAL PRICE
ACTUAL QUANTITYX
STANDARD PRICE
STANDARD QUANTITY
XSTANDARD PRICE
Use this formula to calculate Materials
price variance
Use this formula to calculate Materials quantity variance
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MATERIAL VARIANCES
A) Glacier Peak Outfitters has the following direct material standards for the fiberfill in its mountain parka
0.1 kg of fiberfill per parka at $5.00 per kg Last month, 210 kg of fiberfill were purchased and used to make 2,000
parkas. The material cost a total of $1,029 Material price variance: MPV = ( AQ X AP ) – (AQ X SP)
= (210 x 4.90) – (210 x 5.00)=21= FOVOURABLE OR UNFAVOURABLE?= Actual price:4.90, Standard price: 5.00=Actual is lower than standard=thus, it is favorable=$21 Favorable (F)
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MATERIAL VARIANCE
A) Glacier Peak Outfitters has the following direct material standards for the fiberfill in its mountain parka
0.1 kg of fiberfill per parka at $5.00 per kg Last month, 210 kg of fiberfill were purchased and used to make 2,000
parkas. The material cost a total of $1,029 Material quantity variance: MPV = ( AQ X SP ) – (SQ X SP)
= (210 x 5.00) – (200 x 5.00)=50kg= FOVOURABLE OR UNFAVOURABLE?= Actual quantity:210, Standard quantity: 200=Actual is greater than standard=thus, it is unfavorable=50kg unfavorable (U)
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MATERIAL VARIANCE
A) Hanson Inc. has the following materials standard to manufacture one zippy
1.5 pounds per Zippy at $4.00 per pound Last week, 2,800 pounds of material were purchased at a total cost of
$10,920 and 1700 pounds were used to make 1,000 Zippies Material price variance: MPV = ( AQ X AP ) – (AQ X SP)
= (1700 x 3.9) – (1700 x 4.00)=6630 - 6800=$- 170= FOVOURABLE OR UNFAVOURABLE?= Actual price:3.90, Standard price: 4.00=Actual is lower than standard, harga sebenar lebih murah=thus, it is favorable=$170 favorable (F)
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MATERIAL VARIANCE
A) Hanson Inc. has the following materials standard to manufacture one zippy
1.5 pounds per Zippy at $4.00 per pound Last week, 2,800 pounds of material were purchased at a total cost of
$10,920 and 1700 pounds were used to make 1,000 Zippies Material quantity variance: MPV = ( AQ X SP ) – (SQ X SP)
= (1700 x 4.00) – (1500 x 4.00)=800 pounds = FOVOURABLE OR UNFAVOURABLE?= Actual quantity:1700, Standard quantity: 1,500=Actual is greater than standard, terlebih guna meterial =thus, it is unfavorable=800 pounds (U)
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Spending Variance
Spending variance= MPV + MQV MPV=170 F MQV=800 U Therefore, Spending variance = -170F +
800U=630U
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DIRECT LABOR VARIANCE
Formula? To calculate Direct labor rate
variance
To calculate Direct Labor efficiency variance
ACTUAL HOUR X
ACTUAL RATE
ACTUAL HOURX
STANDARD RATE
STANDARD HOURX
STANDARD RATE
ACTUAL HOUR X
ACTUAL RATE
ACTUAL HOURX
STANDARD RATE
STANDARD HOURX
STANDARD RATE
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DIRECT LABOR VARIANCE 1. Glacier peak Outfitters has the following direct labor
standard for its mountain parka 1.2 standard hours per parka at $10.00 per hour Last month, employees actually worked 2,500 at a total
labor cost of $26,250 to make 2000 parkas Find Direct labor rate, efficiency and total spending
variances. How to solve this problem?
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DIRECT LABOR VARIANCE 1. Glacier peak Outfitters has the following direct labor standard
for its mountain parka 1.2 standard hours per parka at $10.00 per hour Last month, employees actually worked 2,500 at a total labor cost
of $26,250 to make 2000 parkas DL rate variance: DL rate Variance = ( AH X AR ) – (AH X SR)
= (2500 x 10.50) – (2,500 x 10.00)=26,250 - 25000=$1,250= FOVOURABLE OR UNFAVOURABLE?= Actual Rate:10.50, Standard Rate: 10.00=Actual is greater than standard, harga labor lebih mahal =thus, it is unfavorable=$1,250 (U)
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DIRECT LABOR VARIANCE 1. Glacier peak Outfitters has the following direct labor standard for
its mountain parka 1.2 standard hours per parka at $10.00 per hour Last month, employees actually worked 2,500 at a total labor cost
of $26,250 to make 2000 parkas DL efficiency variance: DL efficiency Variance = ( AH X SR ) – (SH X SR)
= (2500 x 10.00) – (( 1.2X 2000)2,400 x 10.00)=25,000 - 24000=1000 hours= FOVOURABLE OR UNFAVOURABLE?= Actual efficiency:2500, Standard efficiency: 2400=Actual is greater than standard, labor ambil masa terlalu lama(x cekap) =thus, it is unfavorable=1000 hours (U)
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DIRECT LABOR VARIANCE
Spending variance= DL rate + DL efficiency
DL rate=$1250 U DL efficiency=1000 U Therefore, Spending variance = 1250U +
1000U=2250U
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DIRECT LABOR VARIANCE 1. Hanson Inc, has the following direct labor standard to
manufacture one zippy 1.5 standard hours per zippy at $12.00 per hour Last week, 1,550 direct labor hours were worked at a total
labor cost of $18,910 to make 1,000 zippies Find Direct labor rate, efficiency and total spending
variances. How to solve this problem?
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DIRECT LABOR VARIANCE 1. Hanson Inc, has the following direct labor standard to
manufacture one zippy 1.5 standard hours per zippy at $12.00 per hour Last week, 1,550 direct labor hours were worked at a total labor
cost of $18,910 to make 1,000 zippies DL rate variance: DL rate Variance = ( AH X AR ) – (AH X SR)
= (1550x 12.20) – (1,550 x 12.00)=18,910 – 18,600=$310= FOVOURABLE OR UNFAVOURABLE?= Actual Rate:12.20, Standard Rate: 12.00=Actual is greater than standard, harga labor lebih mahal =thus, it is unfavorable=$310 (U)
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DIRECT LABOR VARIANCE 1. Hanson Inc, has the following direct labor standard to
manufacture one zippy 1.5 standard hours per zippy at $12.00 per hour Last week, 1,550 direct labor hours were worked at a total labor
cost of $18,910 to make 1,000 zippies DL efficiency variance: DL efficiency Variance = ( AH X SR ) – (SH X SR)
= (1550 x 12.00) – (( 1.5X 1000)1,500 x 12.00)=18,600 – 18,000=600 hours= FOVOURABLE OR UNFAVOURABLE?= Actual efficiency:1550, Standard efficiency: 1500=Actual is greater than standard, labor ambil masa terlalu lama(x cekap) =thus, it is unfavorable=600 hours (U)
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DIRECT LABOR VARIANCE
Spending variance= DL rate + DL efficiency
DL rate=$310 U DL efficiency=600 U Therefore, Spending variance = 310 U + 600
U=910U
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VARIABLE OVERHEAD VARIANCES
1. Glacier peak Outfitters has the following direct variable manufacturing overhead labor standard for its mountain parka
1.2 standard hours per parka at $4.00 per hour Last month, employees actually worked 2,500 hours to
make 2000 parkas. Actual variable manufacturing overhead for the month was $10,500
Find VOH rate, efficiency and total spending variances.
How to solve this problem?
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VARIABLE OVERHEAD VARIANCES
1. Glacier peak Outfitters has the following direct variable manufacturing overhead labor standard for its mountain parka
1.2 standard hours per parka at $4.00 per hour Last month, employees actually worked 2,500 hours to make
2000 parkas. Actual variable manufacturing overhead for the month was $10,500
VOH rate variance: VOH rate Variance = ( AH X AR ) – (AH X SR)
= (2500 x 4.2) – (2,500 x 4.00)=5,115 – 4,650=$465= FOVOURABLE OR UNFAVOURABLE?= Actual Rate:4.2, Standard Rate: 4.00=Actual is greater than standard, harga labor lebih mahal =thus, it is unfavorable=$465 (U)
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VARIABLE OVERHEAD VARIANCES
1. Glacier peak Outfitters has the following direct variable manufacturing overhead labor standard for its mountain parka
1.2 standard hours per parka at $4.00 per hour Last month, employees actually worked 2,500 hours to make 2000
parkas. Actual variable manufacturing overhead for the month was $10,500
VOH efficiency variance: VOH efficiency Variance = ( AH X SR ) – (SH X SR)
= (2500 x 4.00) – (( 1.2X 2000)2400 x 4.00)=10,000 – 9,600=400 hours= FOVOURABLE OR UNFAVOURABLE?= Actual efficiency:2500, Standard efficiency: 2400=Actual is greater than standard, labor ambil masa terlalu lama(x cekap) =thus, it is unfavorable=400 hours (U)
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VARIABLE OVERHEAD VARIANCES
Spending variance= VOH rate + VOH efficiency
VOH rate=$500 U VOH efficiency=400 hours U Therefore, Spending variance = 500 U + 400
U=900U
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VARIABLE OVERHEAD VARIANCES
B) Hanson Inc, has the following variable manufacturing overhead standard to manufacture one Zippy:
1.5 standard hours per zippy at $3.00 per direct labor hour Last week , 1,550 hours were worked to make 1,000
Zippies, and $5,115 was spent for variable manufacturing overhead.
Find VOH rate, efficiency and total spending variances.
How to solve this problem?
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VARIABLE OVERHEAD VARIANCES
B) Hanson Inc, has the following variable manufacturing overhead standard to manufacture one Zippy:
1.5 standard hours per zippy at $3.00 per direct labor hour Last week , 1,550 hours were worked to make 1,000 Zippies, and
$5,115 was spent for variable manufacturing overhead VOH rate variance: VOH rate Variance = ( AH X AR ) – (AH X SR)
= (1,550 x 3.30) – (1,550 x 3.00)=5,115 – 4,650=$465= FOVOURABLE OR UNFAVOURABLE?= Actual Rate:3.30, Standard Rate: 3.00=Actual is greater than standard, harga labor lebih mahal =thus, it is unfavorable=$465 (U)
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VARIABLE OVERHEAD VARIANCES
B) Hanson Inc, has the following variable manufacturing overhead standard to manufacture one Zippy:
1.5 standard hours per zippy at $3.00 per direct labor hour Last week , 1,550 hours were worked to make 1,000 Zippies,
and $5,115 was spent for variable manufacturing overhead VOH efficiency variance: VOH efficiency Variance = ( AH X SR ) – (SH X SR)
= (1550 x 3.00) – (( 1.5X 1000)1500 x 3.00)=4650 – 4500=150 hours= FOVOURABLE OR UNFAVOURABLE?= Actual efficiency:1550, Standard efficiency: 1500=Actual is greater than standard, labor ambil masa terlalu lama(x cekap) =thus, it is unfavorable=150 hours (U)
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VARIABLE OVERHEAD VARIANCES
Spending variance= VOH rate + VOH efficiency
VOH rate=$465 U VOH efficiency=150 hours U Therefore, Spending variance = 465 U + 150
U=615U
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Thank you for using this PPT
I wish good luck to you