Reference no: EM132899461
Variance Review
Moosehead produces cases of 24 bottles.
BUDGETED:
Raw Materials
Bottles: 24 bottles per case @ $0.04 per bottle
Liquid: 350 ml per bottle @$0.001 per ml
Direct Labour
0.25 hours per case @ $12.00 per hour
Overhead
$2.40 variable per hour plus $9,000 fixed.
Budgeted Volume: 18,000 cases
ACTUAL:
Purchases
Bottles: 450,000 bottles @ $0.045 per bottle
Liquid: 152,000,000 ml @ $0.0012 per ml
Usage
434,000 bottles 151,500,000 ml
Direct Labour
4,600 hours @ $12.10 per hour
Overhead
$9,500 variable $10,000 fixed
Actual Output: 17,980 cases
REQUIRED: Compute all material, labour and overhead variances.
Do Bottles and Liquid separately.
Hint: Most common error is not calculating and using SQs.
How many bottles should have been used to make 17,980 cases?
How many ml. of liquid should have been used to make 17,980 cases?
How many hours should the job have taken to make 17,980 cases?
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How many bottles should have been used
: How many bottles should have been used to make 17,980 cases and How many ml. of liquid should have been used to make 17,980 cases
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Compute the labour efficiency variance
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