Answer:
Fletcher
.b. $3,570 unfavorable
Summerline
e. $2,950 unfavorable
Grant
b. $6,000U
Explanation:
<h2>
First Company Fletcher</h2>
DIRECT MATERIALS VARIANCES
std cost $ 2.00
actual cost $ 1.99 ($483,570 actual cost/ 243,000 actual lbs)
quantity 243,000
difference $ 0.01
price variance $2,430.00
The diference is positive, we saved cash from the purchase of direct materials, the variance is favorable.
std quantity 240000.00
actual quantity 243000.00
std cost $2.00
difference -3000.00
efficiency variance $(6,000.00)
The diference is negative, we used more lbs than we expected, this variable is unfavorable
Total:
2,430 - 6,000 = -3,570
<h2>Second company Sumerlin</h2>
DIRECT MATERIALS VARIANCES
For this company, all the values are given we just need to plug into the formula
std cost $5.00
actual cost $5.10
quantity 4,500
difference $(0.10)
price variance $(450.00)
The actial price is higher so it is more expensive. The difference with the standard is negative. The vaiance is unfavorable
std quantity 4000.00 (is a given "budget 4,000 for 2,000 units")
actual quantity 4500.00
std cost $5.00
difference -500.00
efficiency variance $(2,500.00)
Total
-450 - 2,500 = -2,950
<h2>Third Company Grant</h2>
23,000 units x 2 hs = 46,000 standar hours
46,000 x $4 per unit = 184,000 standard variable overhead
actual overhead (190,000)
variance (6,000) unfavorable, the actual cost are higher than it should be.
