Consider the following data collected for Durable Homes Inc

Consider the following data collected for Durable Homes, Inc ?(Click the icon to view the data table.) Requirement Compute the price, efficiency, and flexible-budget variances for direct materials and direct manufacturing labor. First compute the price, efficiency, and flexible-budget variances for direct materials. Label each variance as favorable (F) or unfavorable (U). Price variance Efficiency variance Flexible-budget variance Data Table Direct Direct Materials Manufacturing Labor 95,000 94,000 Costs incurred: Actual inputs x actual prices 216,000 S 215,000 Actual inputs x standard prices Standard inputs allowed for actual output x standard prices 211,000 84,000 Print Done

Solution

Material Material price variance: Std price for actual qty -Actual cost for actual qty 215000 -216000 = $ 1000 Unfavorable Material Efficiency variance: Std price for std quantity-Std price for actual qty 211000 -215000 = $ 4000 Unfavorable Material Flexible budget: Std price for std qty-Actual price for actual qty 211000-216000 = $ 5000 Unfavorable