Compute the following: 1. Materials Price Variance 2. Materials Quantity Variance 3. Labor Rate Variance
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Last month, the following events took place at ADDAMS Company:
a. Produced 25,000 units
b.
Direct Materials: 2 kgs at P2.00
Direct Labor: 1 hour at P15.00
Variable overhead: 1 hour at P5.00
c. Fixed overhead: Monthly budget: P12,000.00 for 20,000 units or 12,000 hours
d. Actual production costs:
Direct materials purchased: 100,000 kgs at P1.98
Direct Materials used: 55,000 kgs
Direct labor: 24,998 hours at P15.02
Factory overhead: P149,000.00 (30% Fixed)
Compute the following:
1. Materials Price Variance
2. Materials Quantity Variance
3. Labor Rate Variance
4. Labor Efficiency Variance
5. Controllable Variance
6. Volume Variance
7. Spending Variance
8. Efficiency Variance
9. Variable Spending Variance
10. Variable Efficiency Variance
11. Fixed Spending Variance
12. Fixed Efficiency Variance
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