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 labor rate variance for January is:

Multiple Choice

• $415 F

• $415 U

• $3,785 U

• $3,785 F

• 2-

  Tharaldson Corporation makes a product with the following standard costs:

  	Standard Quantity or Hours			Standard Price or Rate			Standard Cost Per Unit
  Direct materials		5.8	ounces	$	3.00	per ounce	$	17.40
  Direct labor		0.5	hours	$	12.00	per hour	$	6.00
  Variable overhead		0.5	hours	$	5.00	per hour	$	2.50

  The company reported the following results concerning this product in June.

  Originally budgeted output		3,800	units
  Actual output		3,400	units
  Raw materials used in production		20,800	ounces
  Purchases of raw materials		21,900	ounces
  Actual direct labor-hours		520	hours
  Actual cost of raw materials purchases	$	42,500
  Actual direct labor cost	$	13,800
  Actual variable overhead cost	$	3,900

  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 labor efficiency variance for June is:

  Multiple Choice

• $16,560 F

• $14,160 U

• $16,560 U

• $14,160 F

• 3-

  Tharaldson Corporation makes a product with the following standard costs:

  	Standard Quantity or Hours			Standard Price or Rate			Standard Cost Per Unit
  Direct materials		7.1	ounces	$	4.00	per ounce	$	28.40
  Direct labor		0.2	hours	$	11.00	per hour	$	2.20
  Variable overhead		0.2	hours	$	3.00	per hour	$	.60

  The company reported the following results concerning this product in June.

  Originally budgeted output		2,500	units
  Actual output		3,000	units
  Raw materials used in production		21,500	ounces
  Purchases of raw materials		19,400	ounces
  Actual direct labor-hours		560	hours
  Actual cost of raw materials purchases	$	45,100
  Actual direct labor cost	$	12,500
  Actual variable overhead cost	$	3,500

  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 rate variance for June is:

  Multiple Choice

• $1,832 U

• $1,832 F

• $1,820 F

• $1,820 U

• Milano Pizza is a small neighborhood pizzeria that has a small area for in-store dining as well as offering take-out and free home delivery services. The pizzerias owner has determined that the shop has two major cost driversthe number of pizzas sold and the number of deliveries made.

  The pizzerias cost formulas appear below:

  	Fixed Cost per Month			Cost per Pizza			Cost per Delivery
  Pizza ingredients				$	4.40
  Kitchen staff	$	5,910
  Utilities	$	610		$	0.30
  Delivery person							$	3.10
  Delivery vehicle	$	630					$	1.50
  Equipment depreciation	$	400
  Rent	$	1,870
  Miscellaneous	$	730		$	0.15

  In November, the pizzeria budgeted for 1,560 pizzas at an average selling price of $15 per pizza and for 220 deliveries.

  Data concerning the pizzerias actual results in November appear below:

  	Actual Results
  Pizzas		1,660
  Deliveries		200
  Revenue	$	25,450
  Pizza ingredients	$	7,210
  Kitchen staff	$	5,850
  Utilities	$	885
  Delivery person	$	620
  Delivery vehicle	$	986
  Equipment depreciation	$	400
  Rent	$	1,870
  Miscellaneous	$	790

• 

2 Answer is complete but not entirely correct. Milano Pizza Flexible Budget Performance Report For the Month Ended November 30 Flexible Revenue and Spending Variances Budget 1,660 200 Actual Results 1,660 200 Activity Variances Planning Budget 5,560 2,200 X Pizzas Delivenes Revenue $ 25,450 s 550 F $ 24,900 $ 1,500F 23.400 Expenses Pizza ingredients Kitchen staff 7210 94 F 7,304 440U 6,864 5,850 60 F 5,850 X 0 None 5,850 X Utilities 885 223 F 1 108 30 U 1,078 Delivery person 620 0 None 620 62U x 882 00000000 986 56U 930 30 F 960 Delivery vehicle Equipment depreciation Rent 400 0 None 400 0 None 400 1,870 0 None 0 None 790 189F 15U Miscellaneous Total expense Net operating income 1,870 979 19,061 5,835 1,870 964 18 668 X 4,7328 450 X F 393U 18.611 6,839 IS 1,004 XF $ 1,103 XF