Question

exercise 21-9, 21-10,29-11

972 Chapter 21 Fexible Budgets and Standard Costs Exercise 21- Standard unit cost: total Cost variance A manufactured product has the following information for June. Actual Standard C2 48,500 lbs. $8.10 per Ib 15,700 hrs, $16.50 per hr $198,000 Direct materials Direct labor Overhead . Units manufactured... 6 Ibs a $8 per Ib 2 hrs.$16 per hr 2 hrs. $12 per hr 8.000 Compute the (1) standard cost per unit and (2) total cost variance for June. Indicate whether the Cost vari- ance is favorable or unfavorable. Refer to the information in Exercise 21-8 and compute the (1) direct materials price and (2) direct materi- als quantity variances. Indicate whether cach variance is favorable or unfavorable. Exercise 21-9 Direct materials variances P2 Refer to the information in Exercise 21-8 and compute the (1) direct labor rate and (2) direct labor effi- ciency variances. Indicate whether each variance is favorable or unfavorable. Exercise 21-10 Direct labor vartances P2 Exercise 21-11 Hutto Corp. has set the following standard direct materials and direct labor co0sts per unit for the product it manufactures. Direct materials and direct labor variances P2 Direct materials (15 lbs.$4 per Ib.) Direct labor (3 hrs. @$15 per hr.)- $60 45 During May the company incurred the following actual costs to produce 9,000 units. Direct materials (138,000 lbs. @ $3.75 per lb) Direct labor (31,000 hrs. $15.10 per hr.) $517,500 468.100 Compute the (1) direct materials price and quantity variances and (2) direct labor rate and efficiency vari- ances. Indicate whether each variance is favorable or unfavorable.

Answer 1

21-8	Calculation of total Cost variance for June
	Total Actual cost:
	Direct material	392850
	Direct Labor	259050
	Overhead	198000
	Total Actual Cost	849900
	Less: Standard cost for 8000 units	832000	(8000*104)
	Total Cost variance for June	17900	Unfavourable
21-9	Direct material price variance	(SR-AR)*AQ	(8-8.1)*48500
			4850	Unfavourable
	Direct material quantity variance	(SQ-AQ)*SR	(48000-48500)*8
			4000	Unfavourable
21-10	Direct labor rate variance	(SR - AR)*Actual labor hours	(16-16.5)*15700
			7850	Unfavourable
	Direct labor efficiency variance	(SH - AH)*SR	(16000-15700)*16
			4800	Favourable