Ompute variances, and prepare income statement.

Name: Date:
Instructor: Course:

P22-2A Compute variances, and prepare income statement.
Martinez Manufacturing Corporation accumulates the following data relative to jobs started and finished during the month of June 2012.

Costs and Production Data Actual Standard
Raw materials unit cost $2.25 $2.00
Raw materials units used 10,600 10,000
Direct labor payroll $122,400 $120,000
Direct labor hours worked 14,400 15,000
Manufacturing overhead incurred $184,500
Manufacturing overhead applied $189,000
Machine hours expected to be used at normal capacity 42,500
Budgeted fixed overhead for June $51,000
Variable overhead rate per hour $3.00
Fixed overhead rate per hour $1.20

Overhead is applied on the basis of standard machine hours. 3 hours of machine time are
required for each direct labor hour. The jobs were sold for $400,000 Selling and administrative
expenses were $40,000 Assume that the amount of raw materials purchased equaled the amount used.

Instructions: (For Item”, insert SPfor Standard Price, SQfor Standard Quantity, APfor Actual Price, AQfor Actual Quantity, AHfor Actual Hours, ARfor Actual Rate, SHfor Standard Hours, SRfor Standard Rate, FORfor Factory Overhead Rate, NCHfor Normal Capacity Hours, and SHAfor Standard Hours Allowed.)



(a)(1)(a) Compute the total materials variance.


( Item A Item ) ( Item A Item )
( Amount A Value ) ( Amount A Value )
Amount - Amount
Total materials variance Formula Fav/Unf

(a)(1)(b) Compute the materials price variance.


( Item A Item ) ( Item A Item )
( Amount A Value ) ( Amount A Value )
Amount - Amount
Materials price variance Formula Fav/Unf

(a)(1)(c) Compute the materials quantity variance.


( Item A Item ) ( Item A Item )
( Amount A Value ) ( Amount A Value )
Amount - Amount
Materials quantity variance Formula Fav/Unf

(a)(2)(a) Compute the total labor variance.


( Item A Item ) ( Item A Item )
( Amount A Value ) ( Amount A Value )
Amount - Amount
Total labor variance Formula Fav/Unf

(a)(2)(b) Compute the labor price variance.


( Item A Item ) ( Item A Item )
( Amount A Value ) ( Amount A Value )
Amount - Amount
Labor price variance Formula Fav/Unf

(a)(2)(c) Compute the labor quantity variance.


( Item A Item ) ( Item A Item )
( Amount A Value ) ( Amount A Value )
Amount - Amount
Labor quantity variance Formula Fav/Unf

(b) Compute the total overhead variance.


Item - Item
Value - Value
Total overhead variance Formula Fav/Unf