Question
1. Solly Corporation produces a product for national distribution. Standards for the product are: Materials: 12 ounces per unit at 60 per ounce. Labor: 2
1. Solly Corporation produces a product for national distribution. Standards for the product are:
Materials: 12 ounces per unit at 60 per ounce.
Labor: 2 hours per unit at $8 per hour.
During the month of December, the company produced 1,000 units. Information for the month follows:
Materials: 14,000 ounces purchased and used at a total cost of $7,700.
Labor: 2,500 hours worked at a total cost of $20,625.
The materials quantity variance is:
2. Termeer Inc. has provided the following data concerning one of the products in its standard cost system. Variable manufacturing overhead is applied to products on the basis of direct labor-hours.
Inputs | Standard Quantity or Hours per Unit of Output | Standard Price or Rate |
Variable manufacturing overhead | 0.30 hours | $2.30 per hour |
The company has reported the following actual results for the product for August:
Actual output | 8,000 | units | |
Actual direct labor-hours | 2,380 | hours | |
Actual variable overhead rate | $ | 2.10 | per hour |
Actual variable overhead cost | $ | 4,998 | |
The variable overhead efficiency variance for the month is closest to:
3. Ravena Labs., Inc. makes a single product which has the following standards:
Direct materials: 2.5 ounces at $20 per ounce
Direct labor: 1.4 hours at $12.50 per hour
Variable manufacturing overhead: 1.4 hours at 3.50 per hour
Variable manufacturing overhead is applied on the basis of standard direct labor-hours. The following data are available for October:
3,750 units of compound were produced during the month.
There was no beginning direct materials inventory.
Direct materials purchased: 12,000 ounces for $225,000.
The ending direct materials inventory was 2,000 ounces.
Direct labor-hours worked: 5,600 hours at a cost of $67,200.
Variable manufacturing overhead costs incurred amounted to $18,200.
Variable manufacturing overhead applied to products: $18,375.
The materials quantity variance for October is:
4. Miguez Corporation makes a product with the following standard costs:
Standard Quantity or Hours | Standard Price or Rate | Standard Cost Per Unit | ||||||||
Direct materials | 2.3 | liters | $ | 7.00 | per liter | $ | 16.10 | |||
Direct labor | 0.7 | hours | $ | 22.00 | per hour | $ | 15.40 | |||
Variable overhead | 0.7 | hours | $ | 2.00 | per hour | $ | 1.40 | |||
The company budgeted for production of 2,600 units in September, but actual production was 2,500 units. The company used 5,440 liters of direct material and 1,680 direct labor-hours to produce this output. The company purchased 5,800 liters of the direct material at $7.20 per liter. The actual direct labor rate was $24.10 per hour and the actual variable overhead rate was $1.90 per hour.
The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.
The labor rate variance for September is:
5. Tharaldson Corporation makes a product with the following standard costs:
Standard Quantity or Hours | Standard Price or Rate | Standard Cost Per Unit | |||||||
Direct materials | 6.5 | ounces | $ | 2.00 | per ounce | $ | 13.00 | ||
Direct labor | 0.2 | hours | $ | 23.00 | per hour | $ | 4.60 | ||
Variable overhead | 0.2 | hours | $ | 6.00 | per hour | $ | 1.20 | ||
The company reported the following results concerning this product in June.
Originally budgeted output | 2,700 | units | |
Actual output | 2,800 | units | |
Raw materials used in production | 19,380 | ounces | |
Purchases of raw materials | 21,400 | ounces | |
Actual direct labor-hours | 500 | hours | |
Actual cost of raw materials purchases | $ | 40,660 | |
Actual direct labor cost | $ | 12,050 | |
Actual variable overhead cost | $ | 3,100 | |
The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.
The labor efficiency variance for June is:
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