Module 9 Homework
Waqas AhmedMaterials Variances
North Wind manufactures decorative weather vanes that have a standard materials cost of two pounds of raw materials at $1.50 per pound. During September 12,000 pounds of raw materials costing $1.57 per pound were used in making 5,700 weather vanes.
Determine the materials price and quantity variance.
Direct Labor Variances
Assume that Nortel manufactures specialty electronic circuitry through a unique photoelectronic process. One of the primary products, Model ZX40, has a standard labor time of 0.5 hour and a standard labor rate of $14.50 per hour. During February, the following activities pertaining to direct labor for ZX40 were recorded:
| Direct labor hours used | 2,200 |
| Direct labor cost | $36,000 |
| Units of ZX40 manufactured | 4,600 |
(a) Determine the labor rate variance.
(b) Determine the labor efficiency variance.
(c) Determine the total flexible budget labor cost variance.
Sales Variances
Presented is information pertaining to an item sold by Winding Creek General Store:
| Actual | Budget | |
|---|---|---|
| Unit sales | 140 | 115 |
| Unit selling price | $27 | $24 |
| Unit standard variable costs | (20) | (20) |
| Unit contribution margin | $7 | $4 |
| Revenues | $3,780 | $2,760 |
| Standard variable costs | (2,800) | (2,300) |
| Contribution margin at standard costs | $980 | $460 |
Compute the revenue, sales price, and the sales volume variances.
Multiple Product Performance Report
Storage Products manufactures two models of DVD storage cases: regular and deluxe. Presented is standard cost information for each model:
| Cost Components | Regular | Deluxe | ||
|---|---|---|---|---|
| Direct materials | ||||
| Lumber | 2 board feet × $3 = | $6.00 | 3 board feet × $3 = | $9.00 |
| Assembly kit | = | 2.00 | = | 2.00 |
| Direct labor | 1 hour × $4 = | 4.00 | 1.25 hours × $4 = | 5.00 |
| Variable overhead | 1 labor hr. × $2 = | 2.00 | 1.25 labor hrs. × $2 = | 2.50 |
| Total | $14.00 | $18.50 |
Budgeted fixed manufacturing overhead is $16,000 per month. During July, the company produced 7,000 regular and 3,000 deluxe storage cases while incurring the following manufacturing costs:
| Direct materials | $90,000 |
| Direct labor | 44,000 |
| Variable overhead | 18,000 |
| Fixed overhead | 18,500 |
| Total | $170,500 |
Prepare a flexible budget performance report for the July manufacturing activities.
Computation of Variable Cost Variances
The following information pertains to the standard costs and actual activity for Tyler Company for September:
| Standard cost per unit | |
| Direct materials | 4 units of material A × $2.00 per unit |
| 1 unit of material B × $3.00 per unit | |
| Direct labor | 3 hours × $8.00 per hour |
| Activity for September | |
| Materials purchased | |
| Material A | 3,400 units × $2.05 per unit |
| Material B | 800 units × $3.10 per unit |
| Materials used | |
| Material A | 3,050 units |
| Material B | 705 units |
| Direct labor used | 2,050 hours × $8.30 per hour |
| Production output | 700 units |
There were no beginning direct materials inventories.
(a) Determine the materials price and quantity variances.
(b) Determine the labor rate and efficiency variances.
11 years ago
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