garden metal works produces lawn sculptures 544766
Analyzing Cost Variances
SE 4. Garden Metal Works produces lawn sculptures. The company analyzes only variances that differ by more than 5 percent from the standard cost. The controller computed the following direct labor efficiency variances for March:
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|
Direct Labor Efficiency Variance |
Standard Direct Labor Cost |
|
|
Product 4 |
$1,240 (U) |
$26,200 |
|
Product 6 |
3,290 (F) |
41,700 |
|
Product 7 |
2,030 (U) |
34,300 |
|
Product 9 |
1,620 (F) |
32,560 |
|
Product 12 |
2,810 (U) |
59,740 |
For each product, determine the variance as a percentage of the standard cost (round to one decimal place). Then identify the products whose variances should be analyzed and suggest possible causes for the variances.
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