Managerial Accounting

Zippy Extra Credit Worksheet

Variances & Standard Costs

Hanson Inc. has the following direct materials standard to manufacture one Zippy:

1.5 pounds per Zippy at $4.00 per pound

Last week, 1,700 pounds of materials were purchased and used to make 1,000 Zippies.

The materials cost a total of $6,630.

1. How many pounds of materials should Hanson have used to make 1,000 Zippies?

a. 1,700 pounds

b. 1,500 pounds

c. 1,200 pounds

d. 1,000 pounds

2. Hanson's materials quantity variance (MQV) for the week was:

a. $170 unfavorable

b. $170 favorable

c. $800 unfavorable

d. $800 favorable

3. Hanson's materials price variance (MPV) for the week was:

a. $170 unfavorable

b. $170 favorable

c. $800 unfavorable

d. $800 favorable

Hanson Inc. has the following direct labor standard to manufacture one Zippy

1.5 standard hours per Zippy at $12.00 per direct labor hour

Last week, 1,550 direct labor hours were worked at a total labor cost of $18,910 to make 1,000 Zippies.

4. Hanson's labor rate variance (LRV) for the week was:

a. $310 unfavorable

b. $310 favorable

c. $300 unfavorable

d. $300 favorable

5. Hanson's labor efficiency variance (LEV) for the week was:

a. $590 unfavorable.

b. $590 favorable.

c. $600 unfavorable.

d. $600 favorable

Hanson Inc. has the following variable manufacturing overhead standard to manufacture one Zippy:

1.5 standard hours per Zippy at $3.00 per direct labor hour

Last week, 1,550 hours were worked to make 1,000 Zippies, and $5,115 was spent for variable manufacturing overhead.

6. Hanson's rate variance (VMRV) for variable manufacturing overhead for the week was:

a. $465 unfavorable

b. $400 favorable

c. $335 unfavorable

d. $300 favorable

7. Hanson's efficiency variance (VMEV) for variable manufacturing overhead for the week was:

a. $435 unfavorable

b. $435 favorable

c. $150 unfavorable

d. $150 favorable