Managerial Accounting Chapter 10
The materials price variance is calculated using the
●Actual quantity of the input purchased
●Actual price of the input
●Standard price of the input
The standard rate per unit that a company expects to pay for variable overhead equals the
variable portion of the predetermined overhead rate.
The materials price variance is the difference between the actual price of materials and the
standard price for materials with the difference multiplied by the actual quantity of materials.
Based on the following information, calculate the variable overhead rate variance. Actual
variable overhead cost $15,500 actual hours used 4,200 standard hours allowed 4,000 standard
variable overhead rate $3.75 per hour.
4200 x $3.75 = $15,750
15,750 - 15,500 = $250 Favorable
Calculate the materials quantity variance
Standard price$3 per lb
Actual price$3.20 per lb
Actual quantity 5200 lb
Standard quantity 5000 lb
Flex budget: 5000 x $3 = $15,000
hybrid : 5200 x $3 = 15,600
15,600 - 15,000 = 600 U
*The standard rate per unit that a company expects to pay for variable overhead equals the variable portions ofthe predetermined overhead rateA standard cost card– shows the standard quantity (or hours) and standard price (or rate) of the inputs requiredto produce a unit of a specific productThe standard cost per unit– the standard quantity (or hours) is multiplied by the standard price (or rate) per unitfor all three variable manufacturing costs*Spending variances are computed by taking theamounts in the actual results column and subtractingthe amounts in the flexible budget columns--Either favorable or unfavorable--Price variance– the difference between the actualamount paid for an input and the standard amountthat should be have been paid, multiplied by theactual amount of the input purchasedQuantity variance– the difference between how muchof an input was actually used and how much shouldhave been used for the actual level or output and is stated in dollar terms using the standard price of the inputThe standard quantity allowed /standard hours allowed– the amount of an input that should have been used tomanufacture the actual output of finished goods produced during the period; computed by multiplying the actualoutput by the standard quantity (or hours) per unit. The standard quantity (or hours) allowed is then multiplied
The standard rate per unit that a company expects to pay for variable overhead equals the ______. Multiple choice question. variable portion of the predetermined overhead rate total actual overhead the company expects to incur total predetermined overhead rate variable portion of actual overhead the company expects to incur
Answer :
The standard rate per unit equals the variable portion of the predetermined overhead rate.
The Standard rate per unit refers to the accepted or budgeted rate per unit for a cost.
The Standard rate per unit is different from Actual rate per unit because Standard rate is the estimated rate while Actual rate is the realized rate.
Variable overhead are the costs of operation which fluctuates with the level of the business/manufacturing activity.
Therefore, Option A is correct because the standard rate per unit which is expected to be paid for the variable overhead equals the predetermined overhead rate.
Learn more about this here
brainly.com/question/22090305