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Chapter 9 Problems.docx 

Cost Accounting Homework Problems Chapter 9 1. Belcher Company produces a salt taffy. Recently, the company adopted the following standards for one bag of taffy: Direct materials (6.3 oz a $0.20) Direct labor (0.08 hr. @ $18.00) Standard prime cost $1.26 1.44 $2.70 During the first week of operation, the company experienced the following actual results: a. Bags of taffy produced: 143,000 b. Ounces of direct materials purchased: 901,200 ounces at $0.21 per ounce. c. There are no beginning or ending inventories of direct materials d. Direct labor: 11,300 hours at $17.30. Instructions: 1. Compute the price and the usage variances for direct materials. 2. Compute the rate and the efficiency variances for direct labor. 2. Westerfield, Inc. uses a standard costing system and develops its overhead rates from the current annual budget. The budget is based on an expected annual output of 120,000 units requiring 480,000 direct labor hours. (Practical capacity is 500,000 hours.) Annual budgeted overhead costs total $787,200, of which $556,800 is fixed overhead. A total of 119,400 units using 478,000 direct labor hours were produced during the year. Actual variable overhead costs for the year were $230,600, and actual fixed overhead costs were $556,250. Dashboard Calendar To Do Notifications Inbox

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Standard Material Price		$                   0.20
Standard Quantity	143,000*6.3	900,900
Actual Quantity Purchased		901,200
Actual Quantity used		901,200
Actual Matrial Price		$                   0.21
Material Price Variance	AQ(AP-SP)
	(Actual Price	-	Standard Price)	*	Actual Quantity
	$                                      0.21	-	$                       0.20	*	901200
	$                                    9,012	Unfavorable
Material Quantity Variance	SP(AQ-SQ)
	(Actual Quantity	-	Standard Qty)	*	Standard Price
	901,200	-	900,900	*	$                       0.20
	$                                    60.00	Unfavorable
Yes, since rate is better than earlier and net variance is favorable
Standard Hour Rate		$                 18.00
Standard Hour	143,000*0.08	11,440
Actual Hours		11,300
Actual Hour Rate		$                 17.30
Labor Rate Variance	AH(AR-SR)
	(Actual Rate	-	Standard Rate)	*	Actual Hours
	$                                    17.30	-	$                    18.00	*	11300
	$                                    7,910	Favorable
Labor Efficiency Variance	SR(AH-SH)
	(Actual Quantity	-	Standard Qty)	*	Standard Price
	11,300	-	11,440	*	$                     18.00
	$                                    2,520	Favorable