Download the Applying Excel form and enter formulas in all cells that contain question marks. For example, in cell D21 enter the formula "= D6".
Notes
• In the text, variances are always displayed as positive numbers. To accomplish this, you can use the ABS() function in Excel. For example, the formula in cell B25 would be "=ABS(F21−F22)".
• Cells C25 through C27, C34 through C36, and C43 through C45 already contain formulas to compute and display whether variances are Favorable or Unfavorable. Do not enter data or formulas into those cells—if you do, you will overwrite these formulas.
After entering formulas in all of the cells that contained question marks, verify that the amounts match the numbers in the example in the text.
Check your worksheet by changing the direct materials standard quantity in cell B6 to 2.9 pounds, the direct labor standard quantity in cell B7 to 0.6 hours, and the variable manufacturing overhead in cell B8 to 0.6 hours. The materials spending variance should now be $1,500 U, the labor spending variance should now be $3,720 F, and the variable overhead spending variance should now be $60 F. If you do not get these answers, find the errors in your worksheet and correct them.
Applying Excel
Data
Standard Cost Card
Inputs Standard Quantity Standard Price
Direct materials 3.0 pounds $4.00 per pound
Direct labor 0.50 hours $22.00 per hour
Variable manufacturing overhead 0.50 hours $6.00 per hour
Actual results:
Actual output 2,000 units
Actual variable manufacturing
overhead cost $7,140
Actual Quantity Actual price
Actual direct materials cost 6,500 pounds $3.80 per pound
Actual direct labor cost 1,050 hours $21.60 per hour
Standard Cost Variance Analysis–
Direct Materials
Standard Quantity Allowed for the Actual
Output, at Standard Price
Actual Quantity of Input, at Standard Price
Actual Quantity of Input, at Actual Price
Direct materials variances:
Materials quantity variance ?
Materials price variance ?
Materials spending variance ?
Standard Cost Variance Analysis–
Direct Labor
Standard Hours Allowed for the Actual
Output, at Standard Rate
Actual Hours of Input, at Standard Rate
Actual Hours of Input, at Actual Rate
Direct labor variances:
Labor efficiency variance ?
Labor rate variance ?
Labor spending variance ?
Standard Cost Variance Analysis–Variable
Manufacturing Overhead
Standard Hours Allowed for the Actual
Output, at Standard Rate
Actual Hours of Input, at Standard Rate
Actual Hours of Input, at Actual Rate
Variable overhead variances:
Variable overhead efficiency variance ?
Variable overhead rate variance ?
Variable overhead spending variance ?