Question
Requirement: 1 Majer Corporation makes a product with the following standard costs: Standard Quantity or Hours Standard Price or Rate Standard Cost Per Unit Direct
Requirement: 1
Majer Corporation makes a product with the following standard costs:
| Standard Quantity or Hours | Standard Price or Rate | Standard Cost Per Unit | |||||||
| Direct materials | 6.4 | ounces | $ | 3.00 | per ounce | $ | 19.20 | ||
| Direct labor | 0.7 | hours | $ | 19.00 | per hour | $ | 13.30 | ||
| Variable overhead | 0.7 | hours | $ | 3.00 | per hour | $ | 2.10 | ||
The company reported the following results concerning this product in February.
| Originally budgeted output | 4,700 | units | |
| Actual output | 5,200 | units | |
| Raw materials used in production | 30,400 | ounces | |
| Actual direct labor-hours | 1,820 | hours | |
| Purchases of raw materials | 32,800 | ounces | |
| Actual price of raw materials | $ | 87.10 | per ounce |
| Actual direct labor rate | $ | 77.60 | per hour |
| Actual variable overhead rate | $ | 6.00 | 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 materials quantity variance for February is:
Requirement: 2
Majer Corporation makes a product with the following standard costs:
| Standard Quantity or Hours | Standard Price or Rate | Standard Cost Per Unit | |||||||
| Direct materials | 3.0 | ounces | $ | 5.50 | per ounce | $ | 16.50 | ||
| Direct labor | 0.8 | hours | $ | 11.50 | per hour | $ | 9.20 | ||
| Variable overhead | 0.8 | hours | $ | 4.00 | per hour | $ | 3.20 | ||
The company reported the following results concerning this product in February.
| Originally budgeted output | 6,000 | units | |
| Actual output | 5,800 | units | |
| Raw materials used in production | 17,400 | ounces | |
| Actual direct labor-hours | 4,840 | hours | |
| Purchases of raw materials | 19,000 | ounces | |
| Actual price of raw materials | $ | 5.25 | per ounce |
| Actual direct labor rate | $ | 13.20 | per hour |
| Actual variable overhead rate | $ | 4.70 | 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 materials price variance for February is:
Requirement: 3
Majer Corporation makes a product with the following standard costs:
| Standard Quantity or Hours | Standard Price or Rate | Standard Cost Per Unit | |||||||
| Direct materials | 6.1 | ounces | $ | 2.00 | per ounce | $ | 12.20 | ||
| Direct labor | 0.7 | hours | $ | 12.00 | per hour | $ | 8.40 | ||
| Variable overhead | 0.7 | hours | $ | 2.00 | per hour | $ | 1.40 | ||
The company reported the following results concerning this product in February.
| Originally budgeted output | 5,400 | units | |
| Actual output | 5,700 | units | |
| Raw materials used in production | 33,100 | ounces | |
| Actual direct labor-hours | 2,030 | hours | |
| Purchases of raw materials | 35,500 | ounces | |
| Actual price of raw materials | $ | 17.10 | per ounce |
| Actual direct labor rate | $ | 7.60 | per hour |
| Actual variable overhead rate | $ | 5.30 | 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 variable overhead efficiency variance for February is:
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Intermediate Accounting
Authors: J. David Spiceland, James Sepe, Mark Nelson, Wayne Thomas
10th edition
1260481956, 1260310175, 978-1260481952
