Wk5Assgn Massage Chair

WK5ASSGNP2MooreE

Calculating Variances and Analyzing the Results

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Massage   ChairStandard   Cost Variances for the Current Month

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  | Price   Variance | Quantity   Variance | Total Variance |

Metal tubing | ($3.05 - 3) 3,100     =  $155U | (6.2 -6) $3=  $300U | $455 U |

Leather | ($7.02  -7) 1,100 =    $22U | ( 2.2 -2 ) $7 =  $700U | $722U |

Padding | ($4.1 -4) 1,600 =  $160U | (3.2 - 3)$4 =$400U  | $560U |

Direct labor | ($15.15 15.00) 1,800 = $270U | ( 3.6 - 4)$? = $-$3000F | -$2,730F |

Total | $607U | -$1600F | -$993F |

 Summary

We can see that right from the start that we are over what are standard costs were predetermined. For the metal tubing we were looking at $3 a meter and were actual spending $3.05 a meter which puts us at an unfavorable variance of $155. The quantity was over the standard by .2 meters for an unfavorable variance of $300. We are also showing that we were over on the price of the leather used at $7.02 instead of $7.00 which puts us at $22 unfavorable variance. Also there is an actual of 2.2 meters used instead of 2 sq. meters leaving us at a $700 unfavorable variance. With the padding we are in the same situation. We came in at $4.10 instead of the $4 that is the standard giving us an unfavorable variance of $160. We were over on the quantity as well by using 3.2 kilograms instead of 3 leaving us at an unfavorable variance of $400. Direct labor was the only part of making this chair that did not all fall under an unfavorable variance. The labor cost was over by fifteen cents giving us an unfavorable variance of $270 and the amount of hours used were actually less than the standard at 3.6 giving us favorable variance of $3000.

Although there are unfavorable variances does not necessarily mean that the company is in trouble. If you look at the larger overall picture of the outcomes you can see that it is not that bad. The...