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Accounting 225 Quiz Section #11

Chapter 10 Class Exercises


1. The standards for product X call for 1.0 pounds of a raw material that costs $15.60 per pound.
Last month, 5,700 pounds of the raw material were purchased for $90,345. The actual output of
the month was 5,280 units of product X. A total of 5,200 pounds of the raw material were used to
produce this output.
a. What is the Materials Price Variance for the month?

b. What is the Materials Quantity Variance for the month?

Accounting 225 Quiz Section #11


Chapter 10 Class Exercises
2. The standards for product Y specify 2.5 direct labor-hours per unit at $13.20 per direct laborhour. Last month 3,160 units of product Y were produced using 8,100 direct labor hours at a total
direct labor wage cost of $104,085.
a. What was the Labor Rate Variance for the month?

b. What was the Labor Efficiency Variance for the month?

Accounting 225 Quiz Section #11


Chapter 10 Class Exercises
3. Spence Corporation, which makes skylights, has provided the following data for December:
Budgeted Production
Actual Production
Standard Machine Hours per skylight
Actual Machine Hours
Budgeted Variable Overhead Cost per Machine Hour
Indirect Labor
Power
Actual Total Variable Overhead Costs
Indirect Labor
Power

3,200
3,400
4.6
15,740

Skylight
Skylight
Machine Hours
Machine Hours

$8.50
$1.20

Per Machine Hour


Per Maching Hour

$132,805
$17,656

a) Compute the rate variances and the efficiency variances for indirect labor. Indicate whether
they are favorable or unfavorable.

b) Compute the rate variances and the efficiency variances for power. Indicate whether they are
favorable or unfavorable.

Accounting 225 Quiz Section #11


Chapter 10 Class Exercises
4. Marvel Parts, Inc., manufactures auto accessories. One of its products is a set of seat covers that can be
adjusted to fit nearly any small car. The company uses a standard costing system.
The factorys planned monthly production is 1,900 sets of covers, at which level the following standard
costs should be incurred for prime manufacturing elements:
Total
Per Set of Covers
Direct materials
$42,560 $22.40
Direct labor
$17,100 9.00
Total prime cost at standard
$31.40

The standard number of direct labor hours allowed for that production level is 2,850 hours. Each set of
covers should require 5.6 yards of material.
(a) The standard rate per hour for direct labor is ____.

(b) The standard direct labor hours allowed per unit of output is ____.

(c) The standard price per yard for material is ____

Accounting 225 Quiz Section #11


Chapter 10 Class Exercises
During August, the factory produced 2,000 sets of seat covers. Additional information is presented
below:
Quantity of direct materials purchased. (All used in production)
Actual direct labor hours worked
Direct materials flexible budget variance
Actual prime cost per unit produced

12,000 yds.
2,800
$800 U
$31.90

Management is concerned about the 50 cents per unit cost above standard for prime manufacturing costs
and asks you to perform variance analysis as indicated in (d) through (f) below.
(d) The static (overall) variance for total prime manufacturing costs for the month was ______.

(e) Direct Materials Quantity and Price Variance Analysis:

(f) Direct Labor Efficiency and Rate Variance Analysis: