Silverstream Company makes travel trailers. The following information pertains to the company’s Ohio Division, which manufactures and markets only one model of trailer: the 32-foot Ambassador trailer. Following is budgeted and actual information for the Ohio Division for 2004:
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Budgeted |
Actual |
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Trailers manufactured in 2004 Trailers sold in 2004 Sales price per trailer Direct materials costs (all variable costs): Aluminum Steel Other Total materials costs Direct labor costs (all variable costs) Variable overhead manufacturing costs Fixed overhead costs: Manufacturing fixed overhead Non-manufacturing fixed overhead |
Per Unit $4,000 $2,000 $4,000 $10,000 $5,000 $8,000 |
Total 1,000 1,000 $45,000 $4,000,000 $2,000,000 $4,000,000 $10,000,000 $5,000,000 $8,000,000 $10,000,000 $2,000,000 |
800 600 $45,000 $3,400,000 $1,600,000 $3,800,000 $8,800,000 $3,800,000 $6,400,000 $11,000,000 $2,100,000 |
Additional information:
The company started the year with no inventory of finished trailers or direct materials.
Direct labor standard: 250 hours per trailer
Actual direct labor hours incurred: 195,000 hours
The budgeted quantity of aluminum: 100 lbs. per trailer
The budgeted cost of aluminum: $40 per lb.
The actual quantity of aluminum purchased 84,000 lbs.
The actual quantity of aluminum used 82,927 lbs.
Calculate the following:
A) The aluminum usage variance.
B) The aluminum price variance, if the price variance is calculated at the time the aluminum is purchased.
C) The aluminum price variance, if the price variance is calculated at the time the aluminum is put into production.
D) The flexible budget variance for aluminum.
E) The flexible budget variance for steel.
F) The direct labor wage rate variance.
G) The direct labor efficiency variance.
H) The flexible budget variance for direct labor.
