Standards and Budgets, and Direct Labor Variance Matrix
1. Explain the similarities and differences between standards and budgets. Contrast the accounting for standards and budgets.
2. In the direct labor variance matrix, there are three factors: (1) Actual hours Actual rate, (2) Actual hours Standard rate, and (3) Standard hours Standard rate. Using the numbers, indicate the formulas for wach of the direct labor variances.
3. The following direct materials and direct labor data pertain to the operations of Batista manufacturing Company for the month of August.
Actual Labor $13 per hour Actual hours incurred and used 4,250 hours
Actual materials price $128 per ton Actual quantity of materials purchased and used 1,250 tons
Standard Labor rate $12 per hour Standard hours used 4,300 hours
Standard materials price $130 per ton Standard quantity of materials used 1,200 tons
Compute the total, price, and quantity variances for materials and labor. Provide two possible explanations for each of the unfavorable variances calculated above, and suggest where responsibility for the unfavorable result might be placed.© SolutionLibrary Inc. solutionlibary.com 9836dcf9d7 https://solutionlibrary.com/business/accounting/standards-and-budgets-and-direct-labor-variance-matrix-7gf2
...he departure from plan.
Budget is the company's or a department of the company's projected revenues ,expenses and costs. However,
standard is the projected amount per unit of input,per unit of product, per unit of output.
Both standard and budgets are tools for controlling the operations of the undertaking to ensure that the company
achieve the results as per plan. In case of variances in standard costing that is when there is difference between standard and budget, both favourable and unfavourable variances are charged to the direct material and direct labour to show the actual position of expenses.
In case of variances in budgets, the corrective action will be taken by the managers or the budgets will be modified
according to the changes.
labour rate variance (standard rate- ...