Managerial Accounting
7th Edition
ISBN: 9781260247886
Author: Wild
Publisher: MCG
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Chapter 8, Problem 8E
Exercise 21-8 Standard unit cost; total variance C2
A manufactured product has the following information for June.
| Standard | Actual | |
| Direct materials …………… | 6 lbs. @ $8 per lb. | 48,500 lbs. @ $8, 10 per lb. |
| Direct labor ……………….. | 2 hrs. @ $16 per hr. | 15,700 hrs. @ $16, 50 per hr. |
| 2 hrs. @ $ 12 per hr. | $ 198,000 | |
| Units manufactured ………… | 8,000 |
Compute the (1)
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Variance Problem
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$11.50 per hr
$5.00 per hr
per unit
$7.00
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1.2
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Manufacturing overhead is applied using direct labor hours as the base. During the month of July, XYZ
company had the following information available about production:
a. 9,000 units were produced
b. 37,000 lbs of raw materials were purchased at a cost of $62,900
c. There was no beginning inventory and no ending iInventory of raw materials
d. 10,500 hours of direct labor were used during the month at a cost of $119,175
e. Variable overhead cost in July totaled $57,750
Compute the following and verify the total variance for each component of product cost:
1. Material price variance, Material quantity variance, and Total material variance
2. Labor rate variance, Labor efficiency variance, and Total labor variance
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3
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Mc
Graw
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Tovar Corporation makes a product with the following standard costs:
Standard Quantity
or Hours
Direct materials
Direct labor
Variable overhead
Multiple Choice
The company reported the following results concerning this product in June.
Originally budgeted output
Actual output
Raw materials used in production
Purchases of raw materials
$2,140 U
6.5 ounces
0.2 hours
0.2 hours
$1,820 U
Standard Price Standard Cost
or Rote
Per Unit
$2,140 F
$2.00 per ounce
$23.00 per hour
$6.00 per hour
19,380 ounces
21,400 ounces
Actual direct labor-hours
500 hours
Actual cost of raw materials purchases
$40,660
Actual direct labor cost
$12,050
$3,100
Actual variable overhead cost
The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the
The materials price variance for June is:
2,700 units
2,800 units
$13.00
$4.60
$1.20
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Appendix
EX 20-28
Cost per equivalent unit: average cost method
The following information concerns production in the Forging Department for June. The
Forging Department uses the average cost method.
ACCOUNT NO.
ACCOUNT Work in Process-Forging epartment
Balance
Debit
Credit
Debit
Credit
Date
Item
5,000
June
1
Bal., 500 units, 40% completed
30
Direct materials, 3,700 units
49,200
54,200
30
Direct labor
25,200
79,400
104,520
Factory overhead
Goods transferred, 3,600 units
30
25,120
30
30
Bal., 600 units, 70% completed
a. Determine the cost per equivalent unit.
b. Determine cost of units transferred to Finished Goods.
Determine the cost of units in ending Work in Proces.
Chapter 8 Solutions
Managerial Accounting
Ch. 8 - Prob. 1MCQCh. 8 - Prob. 2MCQCh. 8 - Prob. 3MCQCh. 8 - A Company’s standard for a unit of its single...Ch. 8 - Prob. 5MCQCh. 8 - Prob. 1DQCh. 8 - Prob. 2DQCh. 8 - Prob. 3DQCh. 8 - Prob. 4DQCh. 8 - Prob. 5DQ
Ch. 8 - Prob. 6DQCh. 8 - Prob. 7DQCh. 8 - Prob. 8DQCh. 8 - Prob. 9DQCh. 8 - Prob. 10DQCh. 8 - Prob. 11DQCh. 8 - Prob. 12DQCh. 8 - Prob. 13DQCh. 8 - Prob. 14DQCh. 8 - Prob. 15DQCh. 8 - Prob. 16DQCh. 8 - Prob. 17DQCh. 8 - Prob. 18DQCh. 8 - Prob. 1QSCh. 8 - Prob. 2QSCh. 8 - Prob. 3QSCh. 8 - Prob. 4QSCh. 8 - Prob. 5QSCh. 8 - Prob. 6QSCh. 8 - Prob. 7QSCh. 8 - Prob. 8QSCh. 8 - Prob. 9QSCh. 8 - Materials cost variances P2 Juan Company’s output...Ch. 8 - Prob. 11QSCh. 8 - Prob. 12QSCh. 8 - Prob. 13QSCh. 8 - Prob. 14QSCh. 8 - Prob. 15QSCh. 8 - Prob. 16QSCh. 8 - A Preparing overhead entries P5 Refer to the...Ch. 8 - A Total variable overhead cost variance P4 Mosaic...Ch. 8 - A Overhead spending and efficiency variances P4...Ch. 8 - Computing sales price and volume variances A1...Ch. 8 - Sales variances A1 In a recent year, BMW sold...Ch. 8 - Prob. 22QSCh. 8 - Prob. 23QSCh. 8 - Prob. 24QSCh. 8 - Prob. 1ECh. 8 - Prob. 2ECh. 8 - Prob. 3ECh. 8 - Prob. 4ECh. 8 - Prob. 5ECh. 8 - Prob. 6ECh. 8 - Prob. 7ECh. 8 - Exercise 21-8 Standard unit cost; total variance...Ch. 8 - Prob. 9ECh. 8 - Prob. 10ECh. 8 - Prob. 11ECh. 8 - Prob. 12ECh. 8 - Prob. 13ECh. 8 - Exercise 21-14A Materials variances recorded and...Ch. 8 - Prob. 15ECh. 8 - Prob. 16ECh. 8 - Prob. 17ECh. 8 - Prob. 18ECh. 8 - Exercise 21-19 Computation of total overhead rate...Ch. 8 - Exercise 21-20 Computation of volume and...Ch. 8 - Exercise 21-21 Overhead controllable and volume...Ch. 8 - Prob. 22ECh. 8 - Exercise 21-23 Computing and interpreting sales...Ch. 8 - Prob. 1PSACh. 8 - Prob. 2PSACh. 8 - Prob. 3PSACh. 8 - Prob. 4PSACh. 8 - Prob. 5PSACh. 8 - Problem 21-6AA Materials, labor, and overhead...Ch. 8 - Prob. 1PSBCh. 8 - Prob. 2PSBCh. 8 - Prob. 3PSBCh. 8 - Prob. 4PSBCh. 8 - Prob. 5PSBCh. 8 - Problem 21-6BA Materials, labor, and overhead...Ch. 8 - Prob. 8SPCh. 8 - Flexible budgets and standard costs emphasize the...Ch. 8 - Prob. 2AACh. 8 - Prob. 3AACh. 8 - Prob. 1BTNCh. 8 - The reason we use the words favorable when...Ch. 8 - Prob. 3BTNCh. 8 - Prob. 4BTNCh. 8 - Prob. 5BTNCh. 8 - Prob. 6BTN
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