Classifying variances as favorable or unfavorable
Required
Indicate whether each of the following variances is favorable or unfavorable. The first one has been done as an example.
|
Item to Classify |
Standard |
Actual |
Type of Variance |
|
Materials cost |
$2.90 per pound |
$3.00 per pound |
Unfavorable |
|
Materials usage |
91,000 pounds |
90,000 pounds |
|
|
Labor cost |
$10.00 per hour |
$9.60 per hour |
|
|
Labor usage |
61,000 hours |
61,800 hours |
|
|
Fixed cost spending |
$400,000 |
$390,000 |
|
|
Fixed cost per unit (volume) |
$3.20 per unit |
$3.16 per unit |
|
|
Sales volume |
40,000 units |
42,000 units |
|
|
Sales price |
$3.60 per unit |
$3.63 per unit |