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Judd's Reproduction

In: Business and Management

Submitted By wbaker860
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JUDD’s Reproductions Variance Assignment
To: Judd’s Reproductions’ CEO
From: William Baker, Michael Derrig, Nicole Lapointe Terry Pikul, Brendan Sayers and Ryan Suerth Judd’s Reproduction prepares and sets standards for material and labor on each of its three products produced: chairs, tables and cabinets. (Refer to Schedule A). However, Judd’s does not have a formal process to compare actual results to the estimated standards and report the variances by product. Currently, Judd’s is not taking full advantage of the expected standards in terms of assessing price and quantity efficiency variances arising from the actual costs to highlight performance problems. After reviewing the company’s budgeted projections and comparing them to the actual cost of their products for January, a flexible budget (Schedule D) and variance analysis (Schedule B) was completed. Through this analysis, it has been determined that there are significant variances related to material price and quantity and labor rate and efficiency. Schedule D | | Budgeted | | Actual | | Variance | Direct Materials | | 129,300 | | 137,718 | | $ (8,418) | Direct Labor Carpenters | | 37,680 | | 32,432 | | $ 5,248 | Direct Labor Helpers | | 32,970 | | 40,637 | | $ (7,667) | Total Variance | | | | | | $(10,837) |

Schedule B | | Amount | Material Price Variance | | (6,558) | Labor Rate Variance | | (4,791) | Material Quantity Variance | | (1,860) | Labor Efficiency Variance | | 2,372 | Total Variance | | $(10,837) |

The above totals are computed for the overall variance of Judd’s Reproductions three products combined; however, the variances can be broken down to each of Judd’s product line individually. By preparing monthly flexible budgets and variance analysis as shown in Schedule D and B attached, the company will be able to…...

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