Gibson's Doll Company produces handmade dolls. The standard amount of time spent on each doll is 1.50 hours. The standard cost of labor is $7.64 per hour. The company planned to make 7,500 dolls during the year but actually used 11,850 hours of labor to make 8,600 dolls. The payroll amounted to $94,208. Required a. Should labor varlances be based on the planned volume of 7,500 dolls or the actual volume of 8,600 dolls? b. Prepare a table that shows the standard labor price, the actual labor price, the standard labor hours, and the actual labor hours. c. Compute the labor price variance and indicate whether it is favorable (F) or unfavorable (U). d. Compute the labor usage variance and indicate whether it is favorable (For unfavorable (U). Fanning Fruit Drink Company planned to make 192,000 containers of apple juice. It expected to use two cups of frozen apple concentrate to make each container of juice, thus using 384,000 cups of frozen concentrate. The standard price of one cup of apple concentrate is $0.24. Fanning actually paid $109,701 to purchase 391790 cups of concentrate, which was used to make 193,000 containers of apple juice. Required: b. Compute the actual price per cup of concentrate. (Round your answer to 2 decimal places.) c. Compute the standard quantity (number of cups of concentrate) required to produce the containers. d. Compute the materials price variance and indicate whether it is favorable (P) or unfavorable (U). (Select "None" if there is no effect (ie, zero variance). Round "Price variance" to 2 decimal places.) e. Compute the materials usage variance and indicate whether it is favorable (f) or unfavorable (U). (Select "None" if there is no effect (i.e., zero variance). Round "Usage variance" to 2 decimal places.) Russell and Sons, a CPA firm, established the following standard labor cost data for completing what the firm referred to as a Class 2 tax return Russell expected each Class 2 return to require 4.2 hours of labor at a cost of $51 per hour. The firm actually completed 700 returns Actual labor hours averaged 41 hours per return and actual labor cost amounted to $57 per hour Required o. Determine the total labor variance and indicate whether it is favorable (F) or unfavorable (U) b. Determine the labor price variance and indicate whether it is favorable (F) or unfavorable (U) c. Determine the labor usage variance and indicate whether it is favorable (F) or unfavorable (U). (For all requirements, do not round intermediate calculations and select "None" if there is no effect (i.e., zero variance).) Monique's Florals produced a special Mother's Day arrangement that included eight roses. The standard and actual costs of the roses used in each arrangement follow: Average nunber of roses per arrangement Price per rose Cost of roses per arrangement Standard 8.20 x $0.45 $3.69 Actual 8.50 $0.42 $3.57 Monique's Florals planned to make 760 arrangements but actually made 810. Required a. Determine the total flexible budget materials variance and indicate whether it is favorable (F) or unfavorable (U). b. Determine the materials price variance and indicate whether it is favorable (F) or unfavorable (U). c. Determine the materials usage variance and indicate whether it is favorable (F) or unfavorable (U). d. Confirm the accuracy of Requirements a, b, and c by showing that the sum of the price and usage variances equals the total variance Benson Publications established the following standard price and costs for a hardcover picture book that the company produces Standard price and variable costs Sales price Materials cost Labor cost Overhead cost Selling general, and administrative costs Planned fixed costs Manufacturing overhead Selling, general, and administrative $36.20 8.80 4.20 5.80 6.60 es $127,000 44,000 Benson planned to make and sell 38,000 copies of the book. Howard Cooper, the president of Stuart Computer Services, needs your help. He wonders about the potential effects on the firm's net income if he changes the service rate that the firm charges its customers. The following basic data pertain to fiscal Year 3 Standard rate and variable costs Service rate per hour Labor cost Overhead cost Selling, Beneral, and administrative cost Expected fixed costs Facility maintenance Selling. Beneral, and administrative 87.00 35.00 6.50 3.60 $521,000 149,000
