Question
The following data is given for the Nalika Company: Budgeted production 26,000 units Actual production 27,500 units Materials: Standard price per ounce $6.50 Standard ounces
The following data is given for the Nalika Company:
| Budgeted production | 26,000 units |
| Actual production | 27,500 units |
| Materials: |
|
| Standard price per ounce | $6.50 |
| Standard ounces per completed unit | 8 |
| Actual ounces purchased and used in production | 228,000 |
| Actual price paid for materials | $1,504,800 |
| Labor: |
|
| Standard hourly labor rate | $22 per hour |
| Standard hours allowed per completed unit | 6.6 |
| Actual labor hours worked | 183,000 |
| Actual total labor costs | $4,020,000 |
| Overhead: |
|
| Actual and budgeted fixed overhead | $1,029,600 |
| Standard variable overhead rate | $24.50 per standard labor hour |
| Actual variable overhead costs | $4,520,000 |
Overhead is applied on standard labor hours.
1. The direct labor rate variance is:
| a. | 6,000U |
| b. | 6,000F |
| c. | 33,000F |
| d. | 33,000U |
2. The direct labor time variance is:
| a. | 6,000F |
| b. | 6,000U |
| c. | 33,000U |
| d. | 33,000F |
The Rupa Corporation had 8,200 actual direct labor hours at an actual rate of $12.40 per hour. Original production had been budgeted for 1,100 units, but only 1,000 units were actually produced. Labor standards were 7.6 hours per completed unit at a standard rate of $13.00 per hour.
3. Compute the labor rate variance.
| a. | 4,920U |
| b. | 4,920F |
| c. | 4,560U |
| d. | 4,560U |
4. Compute the labor time variance.
| a. | 9,880F |
| b. | 9,880U |
| c. | 7,800U |
| d. | 7,800F |
|
| Standard | Actual |
| Material Cost Per Yard | $2.00 | $2.10 |
| Standard Yards per Unit | 4.5 yards | 4.75 yards |
| Units of Production |
| 9,500 |
5. Calculate the Total Direct Materials cost variance using the above information:
| a. | $9,262.50 Unfavorable |
| b. | $9,262.50 Favorable |
| c. | $3,780.00 Unfavorable |
| d. | $3,562.50 Favorable |
6. Calculate the Direct Materials Price variance using the above information:
| a. | $1,795.50 Favorable |
| b. | $378.00 Favorable |
| c. | $4,512.50 Unfavorable |
| d. | $378.00 Unfavorable |
7. Calculate the Direct Materials Quantity variance using the above information:
| a. | $4,512.50 Unfavorable |
| b. | $4,512.50 Favorable |
| c. | $4,750 Unfavorable |
| d. | $4,750 Favorable |
|
| Standard | Actual |
| Rate | $12.00 | $12.25 |
| Hours | 18,500 | 17,955 |
| Units of Production |
| 9,450 |
8. Calculate the Total Direct Labor Variance using the above information
| a. | $2,051.25 Favorable |
| b. | $2,051.25 Unfavorable |
| c. | $2,362.50 Unfavorable |
| d. | $2,362.50 Favorable |
9. Calculate the Direct Labor Time Variance using the above information
| a. | $2,362.50 Favorable |
| b. | $2,362,50 Unfavorable |
| c. | $6,540.00 Favorable |
| d. | $6,540.00 Unfavorable |
10. Calculate the Direct Labor Rate Variance using the above information
| a. | $4,488.75 Unfavorable |
| b. | $6,851.25 Favorable |
| c. | $4,488.75 Favorable |
| d. | $6,851.25 Unfavorable |
11. Which of the following is not a reason for a direct materials quantity variance?
| a. | Malfunctioning equipment |
| b. | Purchasing of inferior raw materials |
| c. | Increased material cost per unit |
| d. | Spoilage of materials |
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Applications Of Statistical Sampling To Auditing
Authors: Alvin A. Arens, James K. Loebbecke
1st Edition
0130391565, 978-0130391568
