8 Standard Costing

1

Lesson 8 – Standard Costing – Solutions Problem No 1: (Pacific Furniture)

Actual Price = $259,120 ÷ 12,640 = $20.50 Direct Materials MPV M"V#MV

Direct a*r +V V

(20.50 – 20) × 12,640 (11,%50 – &50×16) × $20

$6,20 ! $,000 '

(1 – 20) × 2,25 *urs (2,25 – &50×) × $0

$2,25 ! $2,250 !

Problem No 2: (Chemical !nc")

1. Direct Materials MPV M"V#MV

Direct a*r +V V#!V

(.10 – ) × 100,000 (9%,0& – 9%10×10) × $

(21 – 20) × 4,900 (4,900 – 9%10×0.5) × $20

$10,000 ! $%1 '

4,900 ! $100'

2. a.

 b.

.

Materials (98,100×3) MPV A/P (100,000×3.10)

$294,300 10,000

WIP (98,100×3)   Ma M aterials(98,073×3)   M ME EV

$294,300

WIP (9810×0.!) × 20  "#  "#V

$310,000

294,219 81 $98,100 4,900

2 Waes/P (4,900×21) "%V

102,900 100

Problem No # ($ar% Flanagan)

1. Varia&e A&al'sis Atal 23,000 $874,000 30,000 244,000 19!,000 $49,000

%&its l+ #ee&e Variable st &tribti& ari& -ie+ sts  erati& I&e

%&its l+ #ee&e Variable st &tribti& ari& -ie+ sts erati& I&e

tati *+et 20,000 $800,000 !00,000 300,000 200,000 $100,000

tati b+et Varia&e 3,000 $74,000 130,000 % !,000 % !,000 $!1,000 % VV tati *+et 3,000 20,000 $120,000 % $800,000 7!,000 % !00,000

Atal 23,000 $874,000 30,000

-*V 0 $4,000 % !!,000 %

-* 23 ,00 0 92 0 ,00 0 ! 7 ! ,0 0 0

244,000

101,000 %

34 ! ,000

4!,000 -

300,000

19!,000 $49,000

!,000 - 200,000 $9,000 % $14!,000

0 $4!,000 -

200,000 $100,000

2. 56e atal P er &it is $38 ($874,00023,000) are+ t a b+ete+ $40 er &it. 56is re+ti& i& P a' elai& t6e 1! i&rease i& &it sales (23,000 Vs 20,000). V a' 6ae eee+e+ t6e b+et r a&' reas&s, i&l+i& i&+ii+al  rie i&reases i& aterials a&+ slies a&+ ssible i&eiie&ies i&eiie&ies bease  t6e 1! srt i& r+ti&. - l+ be less t6a& t6e b+et bease  +ela's i& la&&e+ salar' i&reases, i&reases, a+:ste&ts i& i&sra&e erae, a&+ t6er reas&s. Problem No &: ('oar Coman%)

1. ta&+ar+ ;" 6rs allrs 2. Atal ;" 6rs <r?e+

3

"EV = (Atal >rs @ ta&+ar+ >rs) × ta&+ar+ Prie 2,000 = (Atal >rs @ 4,000×0.!) × $20 Atal >rs = 38,00020 = 1,900 >rs

3. Atal ;" #ate "#V = (Atal #ate @ ta&+ar+ #ate) × Atal 6rs 1,900 = (Atal #ate @ $20) × 1,900 6rs Atal #ate = 39,9001,900 = $21 4. ta&+ar+ Ba&tit'  ;M all
. Atal Ba&tit'  ;M r6ase+ i& C MPV = (Atal Prie @ ta&+ar+ Prie) × ;M r6ase+ 3,2!0 = (Atal Prie × ;M r6ase+ @ ta&+ar+ Prie × ;M r6ase+) 3,2!0 = (8,2!0  $! × ;M r6ase+) ;M r6ase+ = !,000! = 13,000 C 7. Atal ;M rie er C = 13,000 C × Atal Prie = $8,2!0 Atal Prie = $!.2! • •

;ebit aria&es are &arable aria&e a&+ s6
Problem No *: (+,uafloat)

a). ;iretlabr rate aria&e r eber. "#V = (A. #ate @ . #ate) × A. >rs = (8.24 8.20) × 3,!00 = $1,40 % 300,703,!00 = $8.24

4  b). ;iretlabr eiie&' aria&e r eber. %&its lete+ !,00 ×  6rs er &it = 33,00 6rs Partial lete+ 800 × 0.7! ×  6rs = 3,00   37,200 "EV = (A. >rs @ . >rs) × . >rs = (3,!00 @ 37,200) × 4 8.20 = $!,740 ). Atal ?ilras  aterial se+ i& t6e r+ti& ress +ri& eber %&its lete+ !,00 × 8 Partial lete+ 800 × 8

= 44,800 C = ,400 !1,200 C

MFV = ( A.F @ .F) × . #ate 1!00 = ( A.F @ !1,200) × $! Atal Fa&tit' = !1,!00 C +). Atal rie ai+ er ?ilra  +iret aterial i& eber. Atal rie ai+ = 249,2!0  !0,000 = $ 4.98! er C e). 5tal a&ts  ;M a&+ ;" st tra&serre+ t -G i&e&tr' +ri& eber. ;M st tra&serre+ ;" st tra&serre+

!,00×$40($!×8) !,00×$49.20

$224,000 27!,!20 $499,!20

). 56e ttal a&t  ;M a&+ ;" st i& t6e e&+i& bala&e  WIP i&e&tr' at t6e e&+  eber. ;M 800×$40 = 32,000 ;" 800×7!×49.20 = 29,!20 $1,!20

  2. a.

MPV  b.

.

;iret Materials   MPV A/P

$2!0,000 $7!0 $249,2!0

(4.98! @ ! ) ×!0,000

$7!0 -

WIP (!1,200×!) MFV ;M (!1,!00×!)

$2!,000

WIP (37,200×$8.20)

$30!,040

294,219 2!7,!00

!  "#V

1,40 "%V Waes a'able

$!,740 300,70

Problem No -: (.our Coman%)

-ta/ar/ Price *r rate er uit * iut -ta/ar/ "uatit er uit * iut Actual 3uatit use/ er uit * *utut Actual rice *r rate er uit * iut Actual *utut Direct aterial rice ariace Direct aterial 3uatit ariace  7*tal * Direct aterial ariaces Direct la*r rate ariace Direct la*r e8ciec ariace  7*tal * Direct la*r ariaces

Direct a*r E ($20)

Direct Material $% er *u/

F ( 4 Hrs )

C (2.75 per unit) A ( 3 lbs)

.5 *urs $21 er *ur 10,000 uits    D (35,000 U) $100,000 ' $65,000 '

$& er *u/ 10,000 uits $0,000 ' B (20,000 U) $10,000 ' 

A.

MPV = (APP) PF 30,000 (-) = ($7  $8) PF Atal Ft' %se+ = Ft' Pr6ase+ AF = PF = 30,000 lbs Atal Ft' er &it  tt = 30,000  10,000 &its = 3 lbs er &it

*.

5tal ;MV = MPV D MFV 10,000(-) = 30,000(-) D MFV MFV = 20,000 %

.

MFV = (AF @ F) × P 20,000(%) = (30,000 @ F) × $8 F = 27,!00 lbs t+ Fa&tit' er &it = 27,!0010,000 &its = 2.7! lbs er &it

;.

5tal ;"V = "#V D "EV !,000(-) = "#V  100,000 (-) "#V = 3!,000 %

 

 E.

A. >rs = 10,000 &its × 3.! >rs = 3!,000 6rs "#V = (21 @ t+ #ate ) × 3!,000 3!,000 (%) = (21 @ t+ #ate) × 3!,000 t+ #ate = $20

-.

"EV = (3!,000 @ t+. >rs) × $20 100,000 - = (3!,000 @ t+. >rs) × $20 t+ >rs = 40,000 >rs t+ >r er &it 40,000  10,000 = 4 >rs r &it

Prble! " #4 ulli%&n 'ue C!p&n* r*/uces a sile lie * *ral :ear.

7

 7;e sta/ar/ c*sts *r *e suit are< Direct aterials< 5 ar/s * lac cl*t; at $1.%0 er ar/, 2.5 ar/s * :;ite cl*t; at $1.50 er ar/ Direct la*r< 2 ;*urs at $9.50 er ;*ur Duri 'eruar, 450 suits :ere r*/uce/.  7;e c*sts icurre/ /uri t;e *t; :ere< Materials urc;ase/< 2500 ar/s * lac cl*t; at $1.%5 er ar/ 1200 ar/s * :;ite cl*t; at $1.40 er ar/ Materials use/< 200 ar/s * lac cl*t; , 1200 ar/s * :;ite cl*t; Direct la*r< 960 ;*urs at $9.%0 er ;*ur +e3uire/< A. >*ute t;e aterial rice a/ 3uatit ariaces a/ reare all  ?*ural etries ass*ciate/ :it; /irect aterials *r t;e *t; * 'eruar @. >*ute t;e la*r rate a/ e8ciec ariaces a/ reare t;e  ?*ural etries t* rec*r/ t;e icurrece * /irect la*r c*sts.

-*luti* (P14) A.

Material Price Variace @lac (1.%5 1.%0) × 2,500 = $125 !

8

;ite

(1.40 1.50) × 1,200 = $120 '

Material "uatit Variace @lac (2,00 – (450×5= 2,250) × $1.%0 = $90 ! ;ite (1,200 – (450×2.5 =1,125) × $1.50 = $112.50 ! @lac 1. DM (2,500×1.%0) MPV A#P (2,500×1.%5) 2. BP (2,250×1.%0) M"V DM (2,00×1.%0) ;ite 1. DM (1,200 × 1.50) A#P (1,200 × 1.40)   MPV 2. BP (1,125×1.50) M"V DM ( 1,200 ×1.50)

4,500 125 4,625 4,050 120 4,140 1,%00 %,000

1,6%0 120

1,6%&.50 112.50 1,%00

@. +V V

(9.%0  9.50) × 960 = $2%% ! (960 – (450×2= 900)) × 9.50 = $5&0 !

1. D (960×9.50) +V Par*ll (960×9.%0)

9120 2%%

2. BP ( 900×9.5) V Par*ll (960×9.50)

%,550 5&0

9,40%

9,120

Prble! " #5

 7;e r*/ucti* aaer * Pippin C!p&n* eCercises aaeet  eCceti*  reie:i aterials usae a/ la*r e8ciec ariaces icurre/ /uri a ie :ee. is /ecisi* rule is t;at a ariace t;at is at least $5,000 *r at least 10 * sta/ar/ c*st

9

:;ic;eer is saller, s;*ul/ e iestiate/ t* /eterie t;e u/erli cause. Duri last :ee, t;e c*aEs *erati er*race iclu/e/ t;e *ll*:i. !its r*/uce/< 5,000 Direct aterial use/< (21,600 ls F $1%.20) Direct a*r ;*urs :*re/< (%,00 ;*ursF $12.0) -ta/ar/ c*st seciGcati*s *r eac; uit r*/uce/ are< Direct aterials< 4l at $1%.00 eac; Direct la*r< 1.6 ;*urs F $12.0 eac; +e3uire/< A. >alculate all c*st ariaces *r /irect aterials a/ /irect la*r @. -;*ul/ t;e r*/ucti* /eartet aaer iestiate eit;er * t;e ariaces *r :;ic; ;e is res*sileH >. B/eti t;ree *ssile causes * eac; * t;e ariaces *r :;ic; t;e aaer is res*sile.

-*luti* (P15) Direct Material MPV

(1%.20 – 1%) × 21,600

4,20 !

10

M"V

(21,600 – 5,000×4) × $1%

2%,%00 ! $,120 !

Direct a*r PV

(12.0 – 12.0) × %,00 (%,00 – %,000) × $12.0

V

0 ,690 ! $,690 !

@. M"V * $2%,%00 ! s;*ul/ e iestiate/ ecause it is reater t;a $5,000. V * $,690 is *t a siiGcat ariace as it is less t;a $5,000 a/ u/er 10 * sta/ar/ c*st. >.

M"V • • •

Material ieri*r 3ualit 'ault e3uiet Mistaes /uri r*/ucti*

V • • •

'ault e3uiet BeCeriece/ :*rers Ba/e3uate suerisi*

Prble! " #+

11

Ce!-&* C!p&n* r*/uces a i/ii/ual cleai s*let. ac; all* * s*let re3uires 1.2 all*s * a li3ui/ c;eical a/ 1.& *u/s * a c;eical c**u/. B a//iti* 0.2 /irect la*r ;*ur is ee/e/ *r eac; all* * s*let at a sta/ar/ rate * $%.90. 7;e li3ui/ c;eical is urc;ase/ i /rus at a c*st * $ er all* su?ect t* a 2 /isc*ut i ai/ *r :it;i 10 /as. 7;e c*aEs *lic is t* tae a/atae * all /isc*uts. 7;e c;eical c**u/ ;as a sta/ar/ c*st * $50 er 100 *u/s.

Duri 1990, t;e Gr eCeriece/ t;e *ll*:i< 

Actual Pr*/ucti* * s*let :as 109,100 all*s



Actual Purc;ases * ra: aterials< i3ui/ c;eical< 16,650 all*s at $494,22, >;eical c**u/< 21%,200 *u/s at $100,&2



Actual usae * ra: aterials< i3ui/ c;eical< 141,%0 all*s >;eical c**u/< 1%0,015 *u/s



Actual Direct a*r *urs< 2,100 ;*urs at $20&,900

+e3uire/< A. >alculate aterial rice a/ 3uatit ariaces @. >alculate t;e la*r rate a/ e8ciec ariace

-*luti* (P16)

12

A. MPV i3ui/ >;eical >;eical >**u/

• • •

(.02 – 2.94) × 16,650 (46 – 50) × 2,1%2

1,092 ! %,&2% '

$494,000 ÷ 16,650 = $.02 $ × 0.9% = 2.94 100,&2 ÷ 21%,200 = $ 0.46

@. M"V i3ui/ >;eical >;eical >**u/

• •

(141,%0 – 10,920) × 2.94 (1%0,015÷ 100 – 1%5,4&0÷100) × 50

2,0&5.40 ! 2,&2&.50 '

109,100 × 1.& = 1%5,4&0 109,100 × 1.2 = 10,920

>. +V +V

($9 – $%.90) × 2,100

$2,10 !

Actual *urs +ate = 20&,900 ÷ 2,100 = $9 D. V V

(2,100 – 21,%20) × $ %.90

$11,92 !

-ta/ar/ *urs = 109,100 × 0.20 = 21,%20

13

Prble! " #7 Fle!e! n/., auacturer a/ sells *ur I@ Jas; /ries :;*lesale t* c*uter retail c;ais a/ /irect areti *raiKati*s t;at :e sell t;e /ries as a ;*use ra/. 7;e /ries retail *r a aerae * $%.00 er uit a/ c*ete :it; :ell *: ra/s t;at retail *r et:ee $ 10 a/ $ 12 er /rie. 'leCe >'L ;as r*i/e/ t;e *ll*:i u/ete/ sta/ar/s *r t;e *t; * 'eruar 2010.

@u/ete/ aerae :;*lesale selli rice er /rie  7*tal /irect aterials sta/ar/ c*st er /rie Direct auacturi la*r< Direct auacturi sta/ar/ la*r c*st er ;*ur Aerae la*r r*/uctiit rate (/ries er ;*ur) Direct areti c*st er uit 'iCe/ *er;ea/ '*recaste/ sales *r t;e *t;

$4.00 $0.%5 $15.00 00 $0.0 $900,000 1,500,000 uits

L Marc; %t;, t;e ice resi/et * lai a/ c*tr*l ee/s :it; t;e eCecutie c*ittee t* /iscuss 'eruar results. e re*rts as *ll*:s. • • •

• •

!it sales t*tal %0 * la Actual aerae selli rice /eclie t* $.&0 Pr*/uctiit /r* t* 250 /ries er ;*ur. *:eer /ue t* a*rale aret c*/iti*s t;e actual rice * /irect aterials er uit /r* t* $0.%0. Actual /irect areti c*st :ere $0.0 er uit 'iCe/ *er;ea/ c*sts :ere $0,000 el*: la

 +e3uire/< 1. >alculate a) 'leCile u/et *erati ic*e ) 7*tal JeCile u/et ariace c) 7*tal sales *lue ariace 2. >alculate rice a/ e8ciec ariaces *r /irect auacturi la*r

14

Prble! " # 'e1en C!p&n* r*/uces a/ sells a secial *rula s;a**, arete/ u/er t;e lael * >lassi3ue. 7;e Gr uses a ?ust i tie iet*r sste. 7;e sta/ar/ c*sts *r t;e /irect aterial a/ /irect la*r ee/e/ *r eac; *ttle * s;a** are as *ll*:s.

Direct aterials Direct la*r

10 *uces × $0.15 er *uce 0.4 ;*urs × $12 er ;*ur

Duri t;e *t; * Ma, t;e c*a r*/uce/ 2,000 *ttles * s;a** a/ icurre/ t;e *ll*:i actual /irect auacturi c*sts< Purc;ases a/ usae * /irect aterials< 0,000 *uces at a t*tal c*st * $56,100 !sae * /irect la*r< 1,100 ;*urs at a t*tal c*st * $159,%20. +e3uire/< A. ;at :as t;e t*tal auacturi c*st ariace *r t;e GrEs Ma r*/ucti* er*raceH @. >*ute t;e *ll*:i c*st ariaces< 1. 2. . 4.

Material rice ariace Materials 3uatit ariace a*r rate ariace a*r e8ciec ariace

1!

Prble! " # &ri& C!p&n* r*/uces a lau/r /eteret *: as >leau.  7;e Gr uses a sta/ar/ c*st sste t* c*tr*l c*sts. 7;e sta/ar/ /irect aterials re3uire/ *r *e *C * >leau are as *ll*:s.

>;eical >**u/< 5 *u/s at $1.10 er *u/ >*taier< B *C at $0.05 er *C Duri Auust, t;e c*a urc;ase/ a/ use/ 110,000 *u/s * c;eical c**u/ at $1.25 eac; a/ 22,000 c*taiers at $.04 eac;.  7;e actual r*/ucti* * >leau a*ute/ t* 21,200 *Ces. +e3uire/< >*ute t;e aterial rice a/ aterial 3uatit ariaces

1

Prble! " 20 e!n 'ent C!p&n* r*/uces a tet :;ic; re3uires t:* tes * l*. l* '4 a/ l* "&. 7;e ra: aterial sta/ar/s are as *ll*:s. &teri&ls

l* '4 l* "&

t t* per unit 10 ar/s 6 ar/s

t&n&r /st

$14 er ar/ $24 er ar/

 7;e /irect la*r sta/ar/s are % ;*urs er tet at $10 er ;*ur.  7;ere :ere * eii *r e/i :*r i r*cess iet*ries. Actual r*/ucti* *r t;e ear are as *ll*:s. Dire/t &teri&ls Purc;ases Purc;ase Price

"*ln F4 122,000 ar/s $11.50 er ar/

@eii iet*r /i iet*r

%,000 ar/s 6,000 ar/s

Direct la*r< 95,200 ;*urs F $10.0 er ;*ur 12,000 tets :ere r*/uce/ /uri t;e ear +e3uire/< A. >alculate aterial rice a/ 3uatit ariaces. Price Variace l* '4 ($11.5 – $14) × 122,000 l* "& ($24.50 – $24) × &4,000

= $05,000 ' = $&,000 !

 7*tal MPV = $05,000  $ &,000 = $26%,000 ' "uatit Variace l* '4 (124,000 – 120,000) × $14 = $56,000 ! l* "& (&2,000 – &2,000) × $24 =0

"*ln 7 &4,000 ar/s $24.50 er ar/ ,000 ar/s 5,000 ar/s

17

 7*tal MPV = $56,000 ! @. >alculate t;e la*r rate a/ e8ciec ariaces. +V = ($10.0 – $10) × 95,200 = $2%,560 ! V = (95,200 – 96,000) × $ 10 = %,000 '  7*tal = 2%,560 – %,000 = $20,560

Prble! " 2#6 Cl /e C!p&n* is a lare r*/ucer a/ /istriut*r * acae/ ice. 7;e >*a uses sta/ar/ c*sts *r all * its /iNeret siKe/ acaes. 7;e sta/ar/ c*sts a/ actual c*sts *r t;e *t; * Auust are ie el*: *r *e * t;e c*aEs r*/uct lies (er uit * r*/uct) t&n&r Cst

Direct Materials< -ta/ar/< 25 all*s at $0.50 eac; Actual< 2% all*s at $0.60 eac; Direct a*r< -ta/ar/<  ;*ur at $10.00 er ;*ur Actual< 0.25 ;*ur at $10.%0 er ;*ur  7*tal >*st er uit

A/tu&l Cst

$12.50 $16.%0

.00 2.&0 $15.50

$19.50

18

Duri t;e *t; * Auust, t;e c*a r*/uce/ 1%,400 uits * r*/uct. A c*aris* * sta/ar/ a/ actual c*sts *r t;e eri*/ * a t*tal c*st asis is ie el*:. Actual >*sts -ta/ar/ c*sts !a*rale c*st ariace

1%,400 uits at $19.50 1%,400 uits at $15.50

$5%,%00 (25%,200) $&,600

 7;ere :as * iet*r * aterials * ;a/ at t;e eii * Auust. Duri t;e *t;, 515,200 all*s * aterials :ere urc;ase/, all * :;ic; :ere use/ i r*/ucti*. +e3uire/< A. *r /irect aterials 1. >*ute t;e rice a/ 3uatit ariaces *r Auust 2. Preare ?*ural etries t* rec*r/ all actiit relati t* /irect aterials *r Auust. @. *r /irect la*r 1. >*ute t;e rate a/ e8ciec ariaces. 2. Preare ?*ural etries t* rec*r/ t;e icurrece * /irect la*r c*st *r Auust.

Prble! " 22 Albert !&nu&/turin8 C!p&n* auactures a sile r*/uct. 7;e sta/ar/ c*st * *e uit * t;is r*/uct is<

Direct Materials< 6 eters at $1.50 Direct a*r< 1 ;*ur at $6.&5 Variale Ler;ea/< 1 ;*ur at $4.50  7*tal -ta/ar/ Variale >*st er uit

$9.00 $6.&5 $4.50 $20.25

19

Duri t;e *t; * Lct*er, 6,000 uits :ere r*/uce/. -electe/ c*st /ata relati t* t;e *t;Es r*/ucti* *ll*:< • • • • •

Materials Purc;ase/< 60,000 eters at $1.4 $%5,%00 Materials !se/ i Pr*/ucti*< %,000 eters Direct a*rOOOO ;*urs at $OOOOO er ;*ur $41,925 Variale Ler;ea/ >*st icurre/ $0,&1 Variale Ler;ea/ 8ciec Variace $ 2,250 !

 7;ere :as * eii iet*r * ra: aterial. 7;e ariale *er;ea/ rate is ase/ * /irect la*r ;*urs. +e3uire/< a) '*r /irect aterials, c*ute t;e rice a/ 3uatit ariaces *r t;e *t;, a/ reare ?*ural etries t* rec*r/ actiit *r t;e *t;. ) '*r /irect la*r, c*ute t;e rate a/ e8ciec ariaces *r t;e *t;, a/ reare a ?*ural etr t* rec*r/ la*r actiit *r t;e *t;. c) '*r ariale *er;ea/, c*ute t;e se/i ariaces *r t;e *t;, a/ r*e t;e e8ciec ariace ie a*e.

Prble! " 23

 7;e aaer * t;e @lac@err Deartet * +BM is u;a :it; t;e sales *r t;e acc*uti eri*/, ut *its *ut t* *u t;at *t; ariale a/ GCe/ c*sts ;ae a a*rale ariace as is s;*: i t;e *ll*:i aalsis Actual results



-tatic @u/et



-@ Variace

20

!its s*l/ -ales reeue

10,000 $1,%50,000

Variale c*sts

1,120,000

>M

&0,000

'iCe/ c*sts

&05,000

Lerati Bc*e

25,000

0.0 100. 0 60.5 0 9.5 0 %.1 0 1.40

12,000 0.0 2,000 $2,160,000 100. $(10,000 0 ) 1,1%%,000 55.0 6%,000 0 9&2,000 45.0 (242,0000 0 &10,000 2.9 5,000 0 262,000 12.1 (2&,000) 0

 7;e Pr*/uct Maaer ass *u t* iterret t;ese results. *u tell t;e Pr*/uct aaer t;at t;ere is a etter :a t* calculate ariaces. *u tell ;er t;at usi *l t;e static u/et *r ariace aalsis /*es *t ie t;e true icture. +e3uire/ Preare ariace aalsis *r t;e Pr*/uct Maaer usi JeCile u/et ariace aalsis. Clai t;e ariaces t* t;e r*/uct aaer.-;e *:s *t;i a*ut aaeet acc*uti.

21

A< Qaier >*a r*/uces a sile r*/uct. Variale auacturi *er;ea/ is alie/ t* r*/ucts * t;e asis * /irect la*r;*urs. 7;e sta/ar/ c*sts *r *e uit * r*/uct are as *ll*:s. (6 Mars) Direct aterials< 6 *uces at $0.50 er *uce Direct la*r< 1.% ;*urs at $10 er ;*ur Variale auacturi *er;ea/< 1.% ;*urs at $5 er ;*ur 7*tal sta/ar/ ariale c*st er uit

$.00 $1%.00 $9.00 $0.00

Duri Rue, 2000 uits :ere r*/uce/. 7;e c*sts ass*ciate/ :it;  RueEs *erati*s :ere as *ll*:s< Materials urc;ase/< 1%,000 *uces at $0.60 er *uce Materials use/ i r*/ucti*< 14,000 *uces Direct la*r< 4,000 ;*urs at $9.&5 er ;*ur Variale auacturi *er;ea/ c*sts icurre/

$10,%0 0 9,000 20,%00

+e3uire/< 1. >*ute t;e Materials ariaces. (2 Mars) MPV = (0.60 – 0.50) × 1%,000 = $1,%00 ! M"V = (14,000 – 12,000) × L.50 = $ 1,000 !  7*tal = $2,%00 ! 2. >*ute t;e la*r ariace.( 2 Mars) +V = (9.&5 – 10.00)× 4,000 = $ 1,000 ' V = (4,000 – ,600)× $10 = $ 4,000 !  7*tal= $,000 . >*ute t;e ariale auacturi *er;ea/ ariace. (2 Mars) Variale *er;ea/ se/i Variace = (5.20 – 5)×4,000 = $%00 ! Variale *er;ea/ e8ciec ariace = (4000 – ,600) × $5 = $2,000 !

22

 7*tal Variace = $2,%00