Reference no: EM13505274

The impact of variance on unit cost

Lander manufacrures a number of products the standard relating to one of these product are showing along with actual cost data 4 may

direct material standard-1.80 feet at 3.00 per foot standard cost per unit=5.40 actual 1.75 ft at 3.20 per foot=5.60

direct labor standard =0.90 at 18.00per hr standard cost per unit=16.20 actual=0.95 hr at 17.40. per hr actual cost per unit=16.53

variable overhead standard=0.90 hr at 5.00 per hr standard cost per unit=4.50 actual-0.95 hr at 4,60 per hr- actual cost per unit=4.37 total cost per unit standard cost per unit=26.10 actual cost per unit=26.50 excess of actual cost over standard cost per unit=0.40.the production manager was please when he saw this report and he said 0.40 excess cost is well within 2 percent limit management has set for acceptable variance and not to worry about this product actual production 4 the month was 12,000 unit

variable overhead cost is assign to products on the basis of direct labor hrs there were nobeginning or ending inventory ofmaterial

Prepar and compute the following variance 4 may

material price and quanity variance

labor rate and efficiency variance

variable overhead rate and efficiency variance

how much of the 0.40 excess unit cost is traceable to each of the variance compute above

how much of the 0.40 excess unit cost is traceable to apprerent inefficient use of labor time