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Standard Costing Variance Analysis

The document provides a standard costing analysis comparing actual costs to standard costs. There is an unfavorable total variance of $6365. This is due to an unfavorable price variance for fluorescent ink and an unfavorable quantity variance for translucent materials. The price variance for fluorescent ink was likely due to fluctuations in price, so finding a lower cost supplier could help. The quantity variance for translucent materials was due to 200 units of waste, so reducing waste could help improve that variance.

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97 views3 pages

Standard Costing Variance Analysis

The document provides a standard costing analysis comparing actual costs to standard costs. There is an unfavorable total variance of $6365. This is due to an unfavorable price variance for fluorescent ink and an unfavorable quantity variance for translucent materials. The price variance for fluorescent ink was likely due to fluctuations in price, so finding a lower cost supplier could help. The quantity variance for translucent materials was due to 200 units of waste, so reducing waste could help improve that variance.

Uploaded by

SULEIMAN
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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Standard Costing ($)

Total variance
Actual cost incurred:
Direct material:
Boxes of tips 148000
Boxes of translucent & caps 453900
Containers of fluorescent ink 328125
Total cost of direct materials
Direct labour
Manufacturing Overhead (34600+84000)
Total actual cost

Total standard cost (10000 x $106.25)

Total actual cost - Total standard cost

Material:
Price Variance: AQ (AP-SP)
Quantity Variance: SP (AQ-SQ)

Price Variance: ($)


Tips: 10000 (14.8-15) 2000 (favourable)
Translucent: 10200 (44.50-45) 5100 (favourable)
Fluorescent: 9900 (33.15-32) 11385 (unfavourable)

Quantity Variance: ($)


Tips: 15(10000-10000) 0
Translucent: 45(10200-10000) 9000 (unfavourable)
Fluorescent: 32(9900-10000) 3200 (favourable)

Labor Variance:
Rate: AH(AR-SR)
Efficiency: SR (AH-SH)
($)
Rate: 2300(8.80-9) 460 (favourable)
Efficiency: 9(2300-(0.25x10000)) 1800 (favourable)

Overhead: Actual overhead - Standard Overhead ($)


(34600+84000) - (48x2500) 1400 (favourable)

Fluorescent (Price Variance) and Translucent (Quantity Variance) give impact to the unfavourable of $6365
For fluorescent (price variance), it might be due to the fluctuation in the price, so find the cost that is lower tha
For translucent (quantity variance), due to the waste of 200 units, that is why the actual is higher than the stan
($)

930025
20240
118600
1068865

1062500

6365 (unfavourable)

) give impact to the unfavourable of $6365


n in the price, so find the cost that is lower than $33.15. For example, by finding another supplier.
, that is why the actual is higher than the standard cost. Thus, try to reduce the waste.

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