Exercises Chapter 12-Standard Costing
1-2. Flying High Company manufactures model airplanes. During the month, it manufactured 10,000 airplanes. Each one used an average of 6.5 direct dire ct labor hours and an average of 1.5 1 .5 sheets of aluminum. It normally manufactures 7,500 airplanes. Materials and labor standards for making the airplanes are: Direct Materials (1 sheet of aluminum @ $10.00) Direct Materials (other accessories @ $8.75) Direct Labor (6 hours @ $7.00) 1.
$10.00 8.75 42.00
Compute the standard hours allowed for a volume of 10,000 airplanes. a. 60,000 hours b. 420,000 hours c. 70,000 hours d. 65,000 hours
2.
Compute the standard number of sheets of aluminum allowed for a volume of 10,000 airplanes. a. 15,000 sheets b. 10,000 sheets c. 7,500 sheets d. 11,250 sheets
3.
During the month of March, Baker's Express purchased 10,000 pounds of flour at $1 per pound. At the end of March, Baker's Express found that it had an unfavorable materials price variance of $500. The standard cost per pound must be a. $1.95 b. $1.00 c. $1.05 d. $0.95
4. During the month of March, Baker's Express purchased 10,000 pounds of flour at $1 per pound. At the end of March, Baker's Express found that it had a favorable fav orable materials price variance of $500. The s tandard cost per pound must be a. $0.95 b. $1.00 c. $1.05 d. $1.95 5. During June, Cisco Company produced 12,000 chainsaw blades. The standard quantity of material allowed per unit was 1.5 pounds of steel per blade at a standard cost of $8 per pound. Cisco determined that it had a favorable materials usage variance of $1,000 for June. J une. Calculate the actual quantity of materials Cisco used. a. 17,875 pounds b. 12,125 pounds c. 11,875 pounds d. 18,125 pounds
6. During June, Cisco Company produced 12,000 chainsaw blades. The standard quantity of material allowed per unit was 1.5 pounds of steel per blade at a standard cost of $8 per pound. The actual cost was $7 per pound. The actual pounds of steel that Cisco purchased were 19,50 0 pounds. All materials purchased were used. Calculate Cisco's materials usage variance. a. $10,500 U b. $12,000 F c. $12,000 U d. $10,500 F 7. Perfect Builders makes all sorts of moldings. Its standard quantity of material allowed is 1 foot of wood per 1 foot of molding at a standard price of $2.00 per foot. During August, it purchased 500,0 00 feet of wood at a cost of $1.90 per foot, which produced only 499,000 feet of molding. Calculate the materials price variance and the materials usage variance, respectively. a. $50,000 F and $2,000 U b. $49,900 U and $2,000 F c. $50,000 F and $1,900 U d. $49,900 F and $1,900 U 8. Mover Company has developed the following standards for one of its products: Direct materials: Direct labor:
7.5 pounds × $8 per pound 2 hours × $12 per hour
The following activity occurred during March: Materials purchased: Materials used: Units produced: Direct labor:
5,000 pounds costing $42,500 3,600 pounds 500 units 1,150 hours at $11.80/hour
The company records materials price variances at the time of purchase. The variable standard cost per unit for materials and labor is a. $98. b. $84. c. $74. d. $38. 9. Roberts Company uses a standard costing system. The following information pertains to direct materials for the July: Standard price per lb. Actual purchase price per lb. Quantity purchased Quantity used Standard quantity allowed for actual output Actual output
$18.00 $16.50 3,100 lbs. 2,950 lbs. 3,000 lbs. 1,000 units
Roberts Company reports its material price variances at the time of purchase. What is the material usage variance for Roberts Company? a. $900 F b. $1,950 F c. $2,850 F d. $900 U 10. During August, 10,000 units were produced. The standard quantity of material allowed per unit was 10 pounds at a standard cost of $3 per pound. If there was an unfavorable usage variance of $18,750 for August, the actual quantity of materials used must be a. 106,250 pounds. b. 93,750 pounds. c. 31,875 pounds. d. 23,438 pounds. 11. During September, 40,000 units were produced. The standard quantity of material allowed per unit was 5 pounds at a standard cost of $2.50 per pound. If there was a favorable usage variance of $25,000 for September, the actual quantity of materials used must have been a. 210,000 pounds. b. 190,000 pounds. c. 105,000 pounds. d. 95,000 pounds. 12. Max Company has developed the following standards for one of its products. Direct materials: Direct labor: Variable overhead:
15 pounds × $16 per pound 4 hours × $24 per hour 4 hours × $14 per hour
The following activity occurred during the month of October: Materials purchased: Materials used: Units produced: Direct labor:
10,000 pounds costing $170,000 7,200 pounds 500 units 2,300 hours at $23.60/hour
The company records materials price variances at the time of purchase. The direct materials price variance is a. $50,000 F. b. $50,000 U. c. $10,000 U. d. $10,000 F.
Figure 10-3.
Bortello Corporation produces high-quality leather boots. The company has a standard cost system and has set the following standards for materials and labor: Leather (12 strips @ $20) Direct labor (10 hours @ $12) Total prime cost
$240 $120 $360
During the year Bortello produced 125 boots. Actual leather purchased was 1,700 strips, at $16 per strip. There were no beginning or ending inventories of leather. Actual direct labor was 1,500 hours at $15 per hour. 13. Refer to Figure 10-3. Compute the materials price variance and the materials usage variance, respectively. a. $9,000 F and $1,200 U b. $9,300 U and $1,500 F c. $6,800 F and $4,000 U d. $6,800 U and $4,000 F 14. Refer to Figure 10-3. Calculate the labor rate variance and the labor efficiency variance, respectively. a. $4,500 U and $3,000 U b. $4,500 F and $3,000 F c. $4,500 U and $3,000 F d. $4,500 F and $3,000 U 15. Refer to Figure 10-3. Compute the total budget variances for materials and labor, respectively. a. $2,800 F and $7,500 F b. $2,800 F and $7,500 U c. $2,800 U and $7,500 U d. $2,800 U and $7,500 F 16. Refer to Figure 10-3. Compute the costs of leather and direct labor that should have been incurred for the production of 125 boots. a. $36,000 and $36,000 b. $46,500 and $37,500 c. $37,200 and $20,000 d. $30,000 and $15,000 Figure 10-5.
Seaside Company produces picture frames. During the year 190,000 picture frames were produced. Materials and labor standards for producing the picture frames are as follows: Direct materials (2 pieces of wood @ $2.25) Direct labor (2 hours @ $10)
$4.50 $20.00
Seaside purchased and used 400,000 pieces of wood at $2.00 each and its actual labor hours were 360,000 hours at a wage rate of $10.50.
17. Refer to Figure 10-5. What is the materials price variance? a. $100,000 F b. $112,500 U c. $135,000 F d. $170,000 U 18. Refer to Figure 10-5. What is the materials usage variance? a. $112,500 F b. $112,500 U c. $45,000 F d. $45,000 U 19. Refer to Figure 10-5. What is Seaside's labor rate variance? a. $180,000 F b. $180,000 U c. $225,000 U d. $217,500 F 20. Refer to Figure 10-5. What is Seaside's total labor variance? a. $20,000 F b. $20,000 U c. $112,500 F d. $120,000 U
21-22. Harnish Corporation is developing standards for its products. One product requires an input that is purchased for $55.00 per kilogram from the supplier. By paying cash, the company gets a discount of 8% off this purchase price. Shipping costs from the supplier's warehouse amount to $5.17 per kilogram. Receiving costs are $0.28 per kilogram. Each unit of output of the product requires 0.75 kilogram of this input. The allowance for waste and spoilage is 0.04 kilogram of this input for each unit of output. The allowance for rejects is 0.11 kilogram of this input for each unit of output. 21. The standard price per kilogram of this input should be: A. $55.00 B. $56.05 C. $53.95 D. $64.85 22. The standard quantity in kilograms of this input per unit of output should be: A. 0.75 B. 0.71 C. 0.90 D. 0.60
23-24. Schoenfeld Corporation is developing direct labor standards. The basic direct labor wage rate is $1 0.00 per hour. Employment taxes are 9% of the basic wage rate. Fringe benefits are $3.71 per direct labor-hour. A particular product requires 0.88 direct labor-hours per unit. The allowance for bre aks and personal needs is 0.06 direct labor-hours per unit. The allowance for cleanup, machine downtime, and rejects is 0.09 direct labor-hours per unit. 23. The standard rate per direct labor-hour s hould be: A. $4.61 B. $10.00 C. $5.39 D. $14.61 24. The standard direct labor-hours per unit should be: A. 0.88 B. 1.03 C. 0.73 D. 0.82 25-28. Reenu Company manufactures wigs out of used dental floss. The variable cost standards for wig production developed by Reenu are as follows:
Variable overhead at Reenu is based on direct labor-hours. The a ctual results for the month of October were as follows:
25. What is Reenu's materials price variance for October? A. $1,680 favorable C. $14,440 unfavorable B. $12,760 unfavorable D. $15,420 unfavorable 26. What is Reenu's labor efficiency variance for October? A. $2,700 favorable C. $9,900 unfavorable B. $7,200 unfavorable D. $27,600 favorable 27. What is Reenu's variable overhead rate variance for October? A. $3,400 favorable C. $8,250 unfavorable B. $4,850 unfavorable D. $26,400 favorable
