Timothy Company employs standard costing. The standards and actual operating data for the month are as...
Timothy Company employs standard costing. The standards and
actual operating data for the month are as follows:
| Standards | |
| Direct materials | 3.0 pounds per unit @ $4.50 per pound |
| Direct labor | 5.0 hours per unit @ $10.25 per hour |
| Standard quantity allowed | 10,500 pounds |
| Standard hours allowed | 17,500 hours |
| Actual | |
| Direct materials purchased | 11,000 pounds @ $4.25 per pound |
| Direct materials used | 10,700 pounds |
| Direct labor | 17,300 hours @ $10.20 per hour |
The overall direct materials variance is:
| A. |
none of these |
|
| B. |
$1,775 F |
|
| C. |
$1,775 UF |
|
| D. |
$500 UF |
|
| E. |
$500 F |
The materials quantity variance is:
| A. |
none of these |
|
| B. |
$900 F |
|
| C. |
$2,250 F |
|
| D. |
$900 UF |
|
| E. |
$2,250 UF |
The direct materials price variance is:
| A. |
$2,675 F |
|
| B. |
$2,750 F |
|
| C. |
$2,750 UF |
|
| D. |
$2,675 UF |
|
| E. |
none of these |
The labor efficiency variance is:
| A. |
$2,050 F |
|
| B. |
$2050 UF |
|
| C. |
$2,040 F |
|
| D. |
$2,040 UF |
|
| E. |
none of these |
The overall direct labor variance is:
| A. |
$2,915 F |
|
| B. |
$2,915 UF |
|
| C. |
none of these |
|
| D. |
$1,175 UF |
|
| E. |
$1,175 F |
The labor rate variance is:
| A. |
$875 F |
|
| B. |
$875 UF |
|
| C. |
$865 UF |
|
| D. |
$865 F |
|
| E. |
none of these |
|
Homework Answers
Answers
- Data:
--Actual
|
Quantity (AQ) |
Rate (AR) |
Actual Cost |
|
|
Direct Material |
10700 |
$ 4.25 |
$ 45,475.00 |
|
Direct labor |
17300 |
$ 10.20 |
$ 176,460.00 |
--Standard
|
Quantity (SQ) |
Rate (SR) |
Standard Cost |
|
|
Direct Material |
10500 |
$ 4.50 |
$ 47,250.00 |
|
Direct labor |
17500 |
$ 10.25 |
$ 179,375.00 |
- Overall direct material variance:
Correct Answer = Option ‘B’ $ 1775 F
|
Material Spending Variance |
||||||
|
( |
Standard Cost |
- |
Actual Cost |
) |
||
|
( |
$ 47,250.00 |
- |
$ 45,475.00 |
) |
||
|
1775 |
||||||
|
Variance |
$ 1,775.00 |
Favourable-F |
||||
Note: In Case the Variance is based on ‘quantity purchased’, the
above answer will be $ 500 F (Option ‘E’)
- Material Quantity Variance
Option ‘D’ $ 900 UF
|
Material Quantity Variance |
||||||
|
( |
Standard Quantity |
- |
Actual Quantity |
) |
x |
Standard Rate |
|
( |
10500 |
- |
10700 |
) |
x |
$ 4.50 |
|
-900 |
||||||
|
Variance |
$ 900.00 |
Unfavourable-U |
||||
- Direct Material price Variance
Option ‘A’ $ 2675F
|
Material Price Variance |
||||||
|
( |
Standard Rate |
- |
Actual Rate |
) |
x |
Actual Quantity |
|
( |
$ 4.50 |
- |
$ 4.25 |
) |
x |
10700 |
|
2675 |
||||||
|
Variance |
$ 2,675.00 |
Favourable-F |
||||
- Labor Efficeincy Variance
Option ‘A’ $ 2050 F
|
Labour Efficiency Variance |
||||||
|
( |
Standard Hours |
- |
Actual Hours |
) |
x |
Standard Rate |
|
( |
17500 |
- |
17300 |
) |
x |
$ 10.25 |
|
2050 |
||||||
|
Variance |
$ 2,050.00 |
Favourable-F |
||||
- Overall direct labor variance
Option ‘A’ $ 2915 F
|
Labor Spending Variance |
||||||
|
( |
Standard Cost |
- |
Actual Cost |
) |
||
|
( |
$ 179,375.00 |
- |
$ 176,460.00 |
) |
||
|
2915 |
||||||
|
Variance |
$ 2,915.00 |
Favourable-F |
||||
- Labor Rate Variance
Option ‘D’ $ 865 F
|
Labor Rate Variance |
||||||
|
( |
Standard Rate |
- |
Actual Rate |
) |
x |
Actual Labor Hours |
|
( |
$ 10.25 |
- |
$ 10.20 |
) |
x |
17300 |
|
865 |
||||||
|
Variance |
$ 865.00 |
Favourable-F |
||||
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