Problem 1 The following data for the Lewgrow Garden Supplies Company pertains to the production of 2,500 garden spades during March. The spade consists of a wooden handle and a metal forged tool that comes in contact with the ground. Direct Materials (all materials purchased were used): Standard cost: $1.00 pr handle and $3.50 per metal tool. Total Actual cost: $11,350 Materials flexible-budget efficiency variance was $650 unfavorable Direct Manufacturing Labor: Standard cost is 5 garden spades per hour at $20.00 per hour Actual cost per hour was $21.00 Labor efficiency variance was $400 favorable. Required: 1. What is the standard direct material amount per garden spade? 2. What is the standard cost allowed for all units produced? 3. What is the total direct materials flexible-budget variance? 4. What is the direct material flexible-budget price variance? 5. What is the total actual cost of direct manufacturing labor? 6. What is the labor price variance for direct manufacturing label?

Cost Accounting I Test Chapters 7, 8, 9 Problem 1 The following data for the Lewgrow Garden Supplies Company pertains to the production of 2,500 garden spades during March. The spade consists of a wooden handle and a metal forged tool that comes in contact with the ground. Direct Materials (all materials purchased were used): Standard cost: $1.00 pr handle and $3.50 per metal tool. Total Actual cost: $11,350 Materials flexible-budget efficiency variance was $650 unfavorable Direct Manufacturing Labor: Standard cost is 5 garden spades per hour at $20.00 per hour Actual cost per hour was $21.00 Labor efficiency variance was $400 favorable. Required: 1. 2. 3. 4. 5. 6. What is the standard direct material amount per garden spade? What is the standard cost allowed for all units produced? What is the total direct materials flexible-budget variance? What is the direct material flexible-budget price variance? What is the total actual cost of direct manufacturing labor? What is the labor price variance for direct manufacturing label? Problem 2 Tyson Hardware uses a flexible budget to develop planning information for its warehouse operations. For 20x5, the company anticipated that it would have 96,000 sales units for 664 customer shipments. Average storage bin usage for various inventories was estimated to be 200 per day. The costs and cost drivers were determined to be as follows: Item Fixed Variable Cost driver Product handling Storage Utilities Shipping clerks Supplies $10,000 $1.25 3.00 1.50 1.00 0.50 per 100 units per storage bin per 100 units per shipment per shipment 1,000 1,000 During the year, the warehouse processed 90,000 units for 600 customer shipments. The workers used 225 storage bins on average each day to sort, store, and process goods for shipments. The actual costs for 10x5 were: Item Actual costs Product handling Storage Utilities Shipping clerks Supplies $10,900 465 2,020 1,400 340 Required: 1. Prepare a static budget for 20x5 with static-budget variances 2. Prepare a flexible budget for 20x5 with flexible-budget variances. Problem 3 Jael Equipment uses a flexible budget for its indirect manufacturing costs. For 20x5, the company anticipated that it would produce 18,000 units with 3,500 machine-hours and7,200 employees days. The costs and cost drivers were determined to be as follows: Item Fixed Variable Cost driver Product handling Inspection Utilities Maintenance Supplies $30,000 8,000 400 1,000 $0.40 8.00 4.00 0.20 5.00 per unit per 100 unit batch per 100 unit batch per machine hour per employee day During the year, the company processed 20,000 units, worked 7,500 employees days, and had 4,000 machine hours. The actual costs for 10x5 were: Item Actual costs Product handling Inspection Utilities Maintenance Supplies $36,000 9,000 1,600 1,200 37,500 Required: 1. Prepare the static budget using the overhead items above and then compute the staticbudget variances. 2. Prepare a flexible budget using the overhead items above and then compute the flexiblebudget variances. Problem 4 Bruster Company sells its products for $66 each. The current production level is 25,000 units, although only 20,000 units are anticipated to be sold. Unit manufacturing costs are: Direct materials Direct manufacturing labor Variable manufacturing costs Total fixed manufacturing costs Marketing expenses $12.00 $18.00 $ 9.00 $180,000 $6.00 pr units, plus $60,000 per year Required: 1. Prepare an income statement using absorption costing 2. Prepare an income statement using variable costing