WRITTEN ANALYSIS OF THE CASE
Beta Firm produces two Product A and W and regular costs of each and every product were predetermined by management. During November genuine production pertaining to Product A was some, 200 models while Product B was 3, 600 units. Pertaining to material Back button, 39, 500 pounds had been purchased at $14. forty and for material Y, 10, 000 pounds were bought at $9. 70. Variance analysis to get actual expense versus regular cost must be prepared to get the explained month in order to measure benefits of operations, which may be the foundation in making a decision on if to maintain the current performance in case the result is definitely satisfactory, or perhaps take the necessary corrective actions if material differences are reported.
To be able to compute variances of actual costs against normal cost of The fall of Production of products A and B of Beta Business and to have the ability to analyze results and assess performance of departments especially that of Getting and Production.
1 . Calculate the fabric price and usage variances for the month.
2 . Calculate the labor charge and productivity variances pertaining to the month.
3. How would your answers to Question one particular and a couple of change in the event you had been told that November's planned production activity was 4, 1000 units of the and 4, 000 units of W?
4. How would the answers to Question you and two change should you had been told that November's sales were 4, 000 units of A and several, 500 models of N?
Pre-determined standard price
| |Material X |Material Y |Direct Labor | |Product A |4 pounds @ $15 |1 pound @ $9. 50 |1/5hr @ $18 | |Product B |6 lbs snabel-a $15 |2 lbs @ $9. 40 |1/3hr @ $18
November Genuine Production
|Product A |4, 200 units
|Product B |3, 600 units
Actual Purchases of Materials
|В | Qty in pounds | Selling price in $
|Material X | 39, 000 |
| | |14. forty five
|Material Y | 11, 1000 |
| | |9. seventy
Required Direct Labor: 2025 immediate labor several hours at $17. 50
1 . MATERIAL PRICE AND USAGE (QUANTITY) VARIANCES
|Material Price Difference |В | |a. Materials X | = ($14. 40 вЂ“ $15) 39, 000 | | | = $23, 400 FAVORABLE | |b. Material Con | = ($9. 70 вЂ“ $9. 50) * 11, 1000 | |В | = $2, 2 hundred UNFAVORABLE | |Total Materials Price Difference | = $23, 500 F & $2, 2 hundred U | |В | = $21, 200 FAVORABLE | |В |В | |Material Usage Variance |В | |a. Material By | sama dengan (39, 000 вЂ“ ((4, 200 * 4 lbs) + (3, 600 * 6 lbs))) $15 | |...
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