1. EX.23.01.ALGO

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Standard Direct Materials Cost per Unit

Truly Delicious Inc. produces chocolate bars. The primary materials used in producing chocolate bars are cocoa, sugar, and milk. The standard costs for a batch of chocolate (2,800 bars) are as follows:

Ingredient	Quantity	Price
Cocoa	390 lbs.	$0.40 per lb.
Sugar	120 lbs.	$0.60 per lb.
Milk	90 gal.	$1.20 per gal.

Determine the standard direct materials cost per bar of chocolate. Round to two decimal places. fill in the blank 1 of 1$ per bar

2. EX.23.02.ALGO

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• Learning Objective 2

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Standard Product Cost

Designer Furniture Company manufactures designer home furniture. Designer Furniture uses a standard cost system. The direct labor, direct materials, and factory overhead standards for a finished dining room table are as follows:

Line Item Description	Classification	Value
Direct labor:	standard rate	$19.00 per hr.
Direct labor:	standard time per unit	3.50 hrs.
Direct materials (oak):	standard price	$8.50 per bd. ft.
Direct materials (oak):	standard quantity	16 bd. ft.
Variable factory overhead:	standard rate	$2.80 per direct labor hr.
Fixed factory overhead:	standard rate	$1.20 per direct labor hr.

a. Determine the standard cost per dining room table. Round to two decimal places. fill in the blank 1 of 1$ per table

b. A standard cost system provides the company's management a cost control tool using the principle of fill in the blank 1 of 2

cost controlmanagement by exception

. Using this principle, fill in the blank 2 of 2

majorminor

cost deviations from standards can be investigated and corrected.

3. EX.23.07.ALGO

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Standard Product Cost, Direct Materials Variance

H.J. Heinz Company uses standards to control its materials costs. Assume that a batch of ketchup (2,300 pounds) has the following standards:

Ingredient	Standard Quantity	Standard Price
Whole tomatoes	3,800 lbs.	$0.53 per lb.
Vinegar	210 gal.	3.20 per gal.
Corn syrup	18 gal.	11.80 per gal.
Salt	84 lbs.	2.90 per lb.

The actual materials in a batch may vary from the standard due to tomato characteristics. Assume that the actual quantities of materials for batch 08-99 were as follows:

4,000 lbs. of tomatoes 202 gal. of vinegar 19 gal. of corn syrup 83 lbs. of salt

a. Determine the standard unit materials cost per pound for a standard batch. If required, round amounts to the nearest cent.

Ingredient	Standard Cost per Batch
Whole tomatoes	$fill in the blank 1
Vinegar	fill in the blank 2
Corn syrup	fill in the blank 3
Salt	fill in the blank 4
Total	$fill in the blank 5
Standard unit materials cost per pound	$fill in the blank 6

b. Determine the direct materials quantity variance for batch 08-99. If required, round amounts to the nearest cent. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

Ingredient	Materials Quantity Variance	Favorable/Unfavorable
Whole tomatoes	$fill in the blank 7	FavorableUnfavorable
Vinegar	fill in the blank 9	FavorableUnfavorable
Corn syrup	fill in the blank 11	FavorableUnfavorable
Salt	fill in the blank 13	FavorableUnfavorable
Total direct materials quantity variance	$fill in the blank 15	FavorableUnfavorable

4. EX.23.08.ALGO

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Direct Labor Variances

The following data relate to labor cost for production of 3,300 cellular telephones:

Actual: 2,240 hrs. at $12.90 Standard: 2,200 hrs. at $13.20

a. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

Line Item Description	Amount	Variance
Rate variance	$fill in the blank 1	FavorableUnfavorable
Time variance	$fill in the blank 3	FavorableUnfavorable
Total direct labor cost variance	$fill in the blank 5	FavorableUnfavorable

b. The employees may have been less-experienced or poorly trained, thereby resulting in a fill in the blank 1 of 3

higherlower

labor rate than planned. The lower level of experience or training may have resulted in fill in the blank 2 of 3

lessmore

efficient performance. Thus, the actual time required was fill in the blank 3 of 3

lessmore

than standard.

5. EX.23.09.ALGO

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Direct Labor Variances

Corpus Christi Bicycle Company manufactures commuter bicycles from recycled materials. Corpus Christi Bicycle Company records standard costs in its accounts. The following data for March are available:

Line Item Description	Value
Quantity of direct labor used	580 hrs.
Actual rate for direct labor	$12.00 per hr.
Bicycles completed in March	270 bicycles
Standard direct labor per bicycle	2 hrs.
Standard rate for direct labor	$12.20 per hr.

a. Determine for March the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

Line Item Description	Amount	Variance
Direct Labor Rate Variance	$fill in the blank 1	FavorableUnfavorable
Direct Labor Time Variance	$fill in the blank 3	FavorableUnfavorable
Total Direct Labor Cost Variance	$fill in the blank 5	FavorableUnfavorable

b. How much direct labor should be debited to Work in Process? fill in the blank 1 of 1$

6. EX.23.17.ALGO

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Factory Overhead Variance Corrections

The data related to Shunda Enterprises Inc.'s factory overhead cost for the production of 50,000 units of product are as follows:

Line Item Description	Amount
Actual: Variable factory overhead	$263,300
Fixed factory overhead	188,800
Standard: 76,000 hrs. at $6.00 ($3.50 for variable factory overhead)	456,000

Productive capacity at 100% of normal was 75,000 hours, and the factory overhead cost budgeted at the level of 76,000 standard hours was $453,300. Based on these data, the chief cost accountant prepared the following variance analysis:

Line Item Description	Amount	Amount
Variable factory overhead controllable variance:
Actual variable factory overhead cost incurred	$263,300
Budgeted variable factory overhead for 76,000 hours	(266,000)
Variancefavorable		$(2,700)
Fixed factory overhead volume variance:
Normal productive capacity at 100%	75,000 hrs.
Standard for amount produced	(76,000)
Productive capacity not used	1,000 hrs.
Standard variable factory overhead rate	$6.00
Varianceunfavorable		6,000
Total factory overhead cost varianceunfavorable		$3,300

Compute the following to assist you in identifying the errors in the factory overhead cost variance analysis. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Round your interim computations to the nearest cent, if required.

Variance	Amount	Favorable/Unfavorable
Variable Factory Overhead Controllable Variance	$fill in the blank 1	FavorableUnfavorable
Fixed Factory Overhead Volume Variance	$fill in the blank 3	FavorableUnfavorable
Total Factory Overhead Cost Variance	$fill in the blank 5	FavorableUnfavorable

7. EX.23.18.ALGO

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Factory Overhead Cost Variance Report

Tannin Products Inc. prepared the following factory overhead cost budget for the Trim Department for July of the current year, during which it expected to use 9,000 hours for production:

Line Item Description	Amount	Amount
Variable overhead costs:
Indirect factory labor	$30,600
Power and light	6,570
Indirect materials	13,500
Total variable overhead cost		$50,670
Fixed overhead costs:
Supervisory salaries	$37,790
Depreciation of plant and equipment	9,950
Insurance and property taxes	18,560
Total fixed overhead cost		66,300
Total factory overhead cost		$116,970

Tannin has available 13,000 hours of monthly productive capacity in the Trim Department under normal business conditions. During July, the Trim Department actually used 8,000 hours for production. The actual fixed costs were as budgeted. The actual variable overhead for July was as follows:

Line Item Description	Amount
Indirect factory labor	$26,520
Power and light	5,730
Indirect materials	12,600
Total variable cost	$44,850

Construct a factory overhead cost variance report for the Trim Department for July. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. If an amount box does not require an entry, leave it blank. Round your interim computations to the nearest cent, if required.

Productive capacity for the month 13,000 hrs. Actual productive capacity used for the month 8,000 hrs.

Line Item Description	Actual Cost	Budget (at Actual Production)	Unfavorable Variances	Favorable Variances
Variable factory overhead costs:
Indirect factory labor	$Indirect factory labor	$Indirect factory labor	$Indirect factory labor	$Indirect factory labor
Power and light	Power and light	Power and light	Power and light	Power and light
Indirect materials	Indirect materials	Indirect materials	Indirect materials	Indirect materials
Total variable factory overhead cost	$Total variable factory overhead cost	$Total variable factory overhead cost
Fixed factory overhead costs:
Supervisory salaries	$Supervisory salaries	$Supervisory salaries
Depreciation of plant and equipment	Depreciation of plant and equipment	Depreciation of plant and equipment
Insurance and property taxes	Insurance and property taxes	Insurance and property taxes
Total fixed factory overhead cost	$Total fixed factory overhead cost	$Total fixed factory overhead cost
Total factory overhead cost	$Total factory overhead cost	$Total factory overhead cost
Total controllable variances			$Total controllable variances	$Total controllable variances
Net controllable variance-favorableNet controllable variance-unfavorable	blank	blank	$- Select -	blank
Volume variance-unfavorable:
Idle hours at the standard rate for fixed factory overhead	blank	blank	Idle hours at the standard rate for fixed factory overhead	blank
Total factory overhead cost variance-favorableTotal factory overhead cost variance-unfavorable	blank	blank	$- Select -	blank

8. EX.23.21

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Income Statement Indicating Standard Cost Variances

The following data were taken from the records of Griggs Company for December:

Line Item Description	Amount
Administrative expenses	$100,800
Cost of goods sold (at standard)	550,000
Direct materials price varianceunfavorable	1,680
Direct materials quantity variancefavorable	(560)
Direct labor rate variancefavorable	(1,120)
Direct labor time varianceunfavorable	490
Variable factory overhead controllable variancefavorable	(210)
Fixed factory overhead volume varianceunfavorable	3,080
Interest expense	2,940
Sales	868,000
Selling expenses	125,000

create an income statement for presentation to management. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. If an amount box does not require an entry leave it blank.

Line Item Description	Amount Unfavorable	Amount Favorable	Amount
Cost of goods sold-at standardFixed factory overhead volumeGross profitSalesSelling expenses			$- Select -
Administrative expensesCost of goods sold-at standardDirect labor rateDirect materials quantitySelling expenses			- Select -
Direct labor rateGross profit-at standardIncome before income taxIncome from operationsSales			$- Select -
Variances from standard cost:
Administrative expensesCost of goods sold-at standardDirect materials priceInterest expenseSelling expenses	$- Select -	$- Select -
Cost of goods sold-at standardDirect materials quantityFixed factory overhead volumeInterest expenseSales	- Select -	- Select -
Direct labor rateGross profit-at standardIncome before income taxIncome from operationsInterest expense	- Select -	- Select -
Cost of goods sold-at standardDirect labor timeGross profitInterest expenseSelling expenses	- Select -	- Select -
Cost of goods sold-at standardGross profitSalesSelling expensesVariable factory overhead controllable	- Select -	- Select -
Administrative expensesFixed factory overhead volumeInterest expenseSalesSelling expenses	- Select -	- Select -
Administrative expensesCost of goods sold-at standardDirect labor rateDirect materials quantityNet variance from standard cost-unfavorable			- Select -
Gross profitIncome before income taxIncome from operationsNet variance from standard cost-unfavorableSales			$- Select -
Operating expenses:
Cost of goods sold-at standardDirect labor timeDirect materials priceInterest expenseSelling expenses	$- Select -	blank	blank
Administrative expensesDirect materials priceDirect materials quantityFixed factory overhead volumeInterest expense	- Select -	blank	blank
Total operating expenses	blank	blank	Total operating expenses
Gross profit-at standardIncome before income taxIncome from operationsNet variance from standard cost-unfavorableSales			$- Select -
Other expense:
Direct labor rateDirect labor timeDirect materials priceDirect materials quantityInterest expense			- Select -
Gross profitNet variance from standard cost-unfavorableOperating lossOperating incomeSales			$- Select -