Question

550,523 Selling and administrative expenses$ 30,654 The selling and administrative expenses in the planning budget for May would be: a. $30,840 b. $30,864 C. $35,294 d. $35,318 e. None of the above 11. At Stolen Horse Corporation, indirect labor is a variable cost that varies with direct labor hours. Last month's flexible budget performance report showed that actual indirect labor cost totaled $2,056 for the month and 5,140 direct labor hours were actually worked. The report also showed the spending variance for indirect labor was $257 unfavorable and the activity variance for indirect labor was $28 favorable. What was the amount of direct labor hours Stolen Horse budgeted for last month? a. 4,568 hours b. 5,078 hours C. 5,220 hours d. 5,713 hours e. None of the above 12. An unfavorable materials quantity variance indicates that: a. actual usage of material exceeds the standard material allowed for output. b. standard material allowed for output exceeds the actual usage of material. c. actual material price exceeds standard price. d. standard material price exceeds actual price, 13. If variable manufacturing overhead is applied on the basis of direct labor-hours and the variable overhead rate variance is favorable, then: a. the actual variable overhead rate exceeded the standard rate.

questions 11 & 12

Answer 1

The answer has been presented in the supporting sheet. For detailed answer refer to the supporting sheet.

Answer 3 Part 11) 4 The correct answer is C) 5220 Hours 5 6 Indirect labour rate variance = (actual rate -standard rate)* actual hours 7 (257+28) =((2056/5140)-standard rate)*5140 8 285/5140 = .4 - standard rate 9 standard rate =.4-.055447 10 = .344553 12 Direct labour effeciency variance = (actual hours - standrad hours)*standard rate 13 -28 = (5140 - standard hours) *0.344553 14 (-28/.344553) -5140 = -standard hours 15 standard hours = 5220 hours 16 17 Thus the correct answer is 5220 hours 18 19 Part 12) 20 The correct answer is 21 a) actual usage of material exceeds the standard material allowed per unit 22 23 Explanation 24 Material quantity variance is unfavourable when actual qty used is more than standard qty.