Question
1. TaskMaster Enterprises employs a standard cost system in which direct materials inventory is carried at standard cost. TaskMaster has established the following standards for
1. TaskMaster Enterprises employs a standard cost system in which direct materials inventory is carried at standard cost. TaskMaster has established the following standards for the prime costs of one unit of product.
| Standard |
| Standard | Standard | ||||||||
| Quantity |
| Price | Cost | ||||||||
Direct Materials |
| 8 | pounds |
|
| $ | 1.80 | per pound |
| $ | 14.40 |
|
Direct Labor |
| .25 | hour |
|
| $ | 8.00 | per hour |
|
| 2.00 |
|
|
|
|
|
|
|
|
|
|
| $ | 16.40 |
|
During November, TaskMaster purchased 160,000 pounds of direct materials at a total cost of $304,000. The total factory wages for November were $42,000, 90% of which were for direct labor. TaskMaster manufactured 19,000 units of product during November using 142,500 pounds of direct materials and 5,000 direct labor hours.
Is the direct labor price (rate) variance favorable or unfavorable?
a.) Favorable.
b.) Unfavorable.
2. Data on Gantry Company's direct-labor costs are given below:
|
|
|
|
Standard direct-labor hours |
| 30,000 |
|
Actual direct-labor hours |
| 29,000 |
|
Direct-labor efficiency variance-favorable | $ | 4,000 |
|
Direct-labor rate variance-favorable | $ | 5,800 |
|
Total direct labor payroll | $ | 110,200 |
|
What was Gantry's standard direct-labor rate?
a.) $3.54.
b.) $3.80.
c.) $4.00.
d.) $5.80.
3. The Fellowes Company has developed standards for labor. During June, 75 units were scheduled and 100 were produced. Data related to labor are:
|
|
|
|
|
Standard hours allowed |
| 3 | hours per unit |
|
Standard wages allowed | $ | 4.00 | per hour |
|
Actual direct labor |
| 310 | hours (total cost $1,209) |
|
What is the labor rate variance for June?
a.) $30 unfavorable.
b.) $31 favorable.
c.) $31 unfavorable.
d.) $30 favorable.
4.
|
|
|
|
Actual machine hours |
| 840 |
|
Standard machine hours allowed |
| 900 |
|
Denominator activity (machine hours) |
| 1,000 |
|
Actual fixed overhead costs | $ | 3,800 |
|
Budgeted fixed overhead costs | $ | 4,000 |
|
Predetermined overhead rate ($1 variable + $4 fixed) | $ | 5 |
|
What is the fixed overhead spending (budget) variance?
a.) $200.
b.) $400.
c.) $300.
d.) $240.
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