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##### ACCOUNTING: VARIANCE ANALYSIS

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Question;Nola Company manufactured and sold 10,000 units last year for \$175 per;unit, although it had budgeted to sell 12,000 units for \$180 per unit. Nola;purchased and used 20,000 feet of direct materials for \$400,000. Nola paid direct;labor \$300,000 for 15,000 hours. Manufacturing overhead cost \$650,000, half;variable and half fixed. Variable overhead is usually applied at;rate of 100% of direct labor costs. Fixed overhead was budgeted to cost;\$400,000. Production standards call for each unit to use 2.5 feet of materials;costing \$18.oo/foot, and 2 hours of labor costing \$18.oo/hour.;Calculate all nine variances and indicate whether they are favorable or;unfavorable.;SHOW YOUR WORK IN A TABLE THAT CONTAINS (Feel free to use Excel if you;wish);Rows: REVENUE, DM, DL, VOH, CM, FC;Columns: Static Budget, Flexible Budget, Standard Cost of Actual;Quantity, Actual;Calculating All nine Variances include;Sales Price Variance;DM Efficiency Var;DM Price Var;DL Efficiency Var;DL Price Var;VOH Efficiency Var;VOH Spending Var;CM Sales Variance;VOH Spending Variance;Show your work and the answers should be;Sales Price Variance 50000 U;CM Sales Vol Var 126000 U;DM Efficiency Var 90000 F;DL Efficeincy Var 90000 F;VOH Efficeincy Var 60000 F;DM Price Var 40000 U;DL Price Var 30000 U;VOH Spending Var 25000 U

Paper#45098 | Written in 18-Jul-2015

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