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E15-2 Favorable of variance

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Exercise 15-2 Determining amount and type (favorable vs. unfavorable) of variance

Required
Compute variances for the following items and indicate whether each variance is favorable (F) or
unfavorable (U).

Budget Actual
Sales price   650  525
Sales revenue   580,000  600,000
Cost of goods sold   385,000  360,000
Material purchases at 5,000 pounds   275,000  280,000
Materials usage   180,000  178,000
Production volume   950  900
Wages at 4,000 hours   60,000  58,700
Labor usage at $16 per hour   96,000  97,000
Research and development expense   22,000  25,000
Selling and administrative expenses   49,000  40,000

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