Posted: August 1st, 2016

What is the materials variance?

Posters Now uses a standard cost system. Job 67 is for the manufacturing of 800 unites of the product P100. The company’s standards for one unit of product P100 are as follows:

Standard quantity: 11 ounces
Standard price: $3 per ounce
Standard direct labour: 1.5 hours
Standard labor rate: $12 per hour

The job required 8,000 ounces of raw material costing ,100.
a) What is the materials variance? Show computations.
b) What is the materials quantity variance? Show computations.
Using the adjusted trial balance of Ladner Environmental Services at the end of its year, December 31, 2011:
1. Prepare Ladner Environmental Services 2011 income statement, statement of owner’s equity, and balance sheet. List expenses in decreasing-balance order on the income statement and show total liabilities on the balance sheet. Write a short paragraph describing how the three financial statements are linked. How will what you have learned in this problem help you manage a business?
2. Which financial statement reports Ladner Environmental Services result’s of operations? Were 2011 operations successful? Cite specifics from the financial statements to support your evaluation.
3. Which statement reports the company’s financial position? Does Ladner financial position look strong or weak? Give the reason for your evaluation