122. The following information relates to the month of April for The Marilyn Manufacturing
Company, which uses a standard cost accounting system.
Required: (Be sure to indicate whether the variances are favorable or unfavorable.)
a. What is the variable overhead efficiency variance?
b. What is the fixed overhead spending variance?
c. What is the fixed production volume variance?
123. The following information relates to the month of April for The Marilyn Manufacturing
Company, which uses a standard cost accounting system.
Required: (Be sure to indicate whether the variances are favorable or unfavorable.)
a. What is the variable overhead efficiency variance?
b. What is the variable overhead price variance?
c. What is the fixed production volume variance?
124. The data below relate to a product of Benoit Company.
Required: (Be sure to indicate whether the variances are favorable or unfavorable.)
a. Compute the direct material price variance.
b. Compute the direct material usage variance.
c. Compute the direct labor rate variance.
d. Compute the direct labor efficiency variance.
125. The data below relate to a product of Valois Company.
Required: (Be sure to indicate whether the variances are favorable or unfavorable.)
a. What is the variable overhead efficiency variance?
b. What is the variable overhead price variance?
c. What is the fixed overhead budget variance?
d. What is the fixed production volume variance?
126. The following standards have been established for a raw material used to make product
P62:
The following data pertain to a recent month’s operations:
Required:
a. What is the materials price variance for the month?
b. What is the materials quantity variance for the month?
127. The following data for November have been provided by Rickenbaker Corporation, a
producer of precision drills for oil exploration:
Required:
Compute the variable overhead rate variances for indirect labor and for power for November.
Indicate whether each of the variances is favorable (F) or unfavorable (U). Show your work!
128. The following data have been provided by Tiano Corporation:
Required:
Compute the variable overhead rate variances for lubricants and for supplies. Indicate whether
each of the variances is favorable (F) or unfavorable (U). Show your work!
129. Vitko Corporation makes automotive engines. For the most recent month, budgeted
production was 6,000 engines. The standard power cost is $8.80 per machine-hour. The
company’s standards indicate that each engine requires 6.1 machine-hours. Actual production
was 6,400 engines. Actual machine-hours were 38,730 machine-hours. Actual power cost totaled
$350,628.
Required:
Determine the rate and efficiency variances for the variable overhead item power cost and
indicate whether those variances are unfavorable or favorable. Show your work!
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130. The Lahn Company produces and sells a single product. Standards have been established
for the product as follows:
Direct materials: 5 pounds @ $3.50 per pound = $17.50
Direct labor: 3 hours @ $5.50 per hour = $16.50
Actual cost and usage figures for the past month follow:
Required:
Prepare journal entries to record:
a. The purchase of raw materials.
b. The usage of raw materials in production.
c. The incurrence of direct labor cost.
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131. The following standards have been established for a raw material used in the production
of product O99:
The following data pertain to a recent month’s operations:
Required:
a. What is the materials price variance for the month?
b. What is the materials quantity variance for the month?
c. Prepare journal entries to record the purchase and use of the raw material during the month.
(All raw materials are purchased on account.)
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132. The standards for product J42 call for 3.6 feet of a raw material that costs $14.00 per feet.
Last month, 5,500 feet of the raw material were purchased for $76,175. The actual output of the
month was 1,260 units of product J42. A total of 4,800 feet of the raw material were used to
produce this output.
Required:
a. What is the materials price variance for the month?
b. What is the materials quantity variance for the month?
c. Prepare journal entries to record the purchase and use of the raw material during the month.
(All raw materials are purchased on account.)
133. Compound Y23Z is used by Mcfadin Corporation to make one of its products. The
standard cost of compound Y23Z is $38.70 per ounce and the standard quantity is 4.6 per unit of
output. Data concerning the compound in the most recent month appear below:
The raw material was purchased on account.
Required:
a. Record the purchase of the raw material in a journal entry.
b. Record the use of the raw material in production in a journal entry.
134. The standards for product A22G specify 8.2 direct labor-hours per unit at $11.90 per direct
labor-hour. Last month 200 units of product A22G were produced using 1,700 direct labor-hours at
a total direct labor wage cost of $20,060.
Required:
a. What was the labor rate variance for the month?
b. What was the labor efficiency variance for the month?
c. Prepare a journal entry to record direct labor costs during the month, including the direct labor
variances.
135. Wahlen Corporation has provided the following data concerning its direct labor costs for
November:
Required:
Prepare the journal entry to record the incurrence of direct labor costs.
136. Explain the difference between operating budgets, financial budgets, and flexible
budgets.
137. Explain the difference between the sales volume variance and the production volume
variance.
138. Explain how standards and budgets are different.
139. Explain two reasons why splitting production costs into price and efficiency variances is
beneficial for management control.
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140. Explain two reasons for preparing a variance analysis.
141. The Clayton Company uses a standard cost system in which manufacturing overhead
costs are applied to units of the company’s single product on the basis of standard direct labor–
hours (DLHs). The standard cost card for the product follows:
The following data pertain to last year’s activities:
• The company manufactured 18,000 units of product during the year. A total of 70,200 yards of
material was purchased during the year at a cost of $3.75 per yard. All of this material was used to
manufacture the 18,000 units.
• The company worked 29,250 direct labor-hours during the year at a cost of $7.80 per hour.
• The denominator activity level was 22,500 direct labor-hours.
• Budgeted fixed manufacturing overhead costs were $135,000 while actual manufacturing
overhead costs were $133,200.
• Actual variable overhead costs were $61,425.
Required:
a. Compute the direct materials price and quantity variances for the year.
b. Compute the direct labor rate and efficiency variances for the year.
c. Compute the variable overhead rate and efficiency variances for the year.
d. Compute the fixed manufacturing overhead budget and volume variances for the year.
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142. Mountain Manufacturing uses a standard cost system in which manufacturing overhead is
applied to units of product on the basis of standard machine-hours. At standard, each unit of
product requires one machine-hour to complete. The standard variable overhead is $1.75 per
machine-hour and Budgeted Fixed Manufacturing Costs are $300,000 per year. The denominator
level of activity is 150,000 machine-hours, or 150,000 units. Actual data for the year were as
follows:
Required:
a. What are the predetermined variable and fixed manufacturing overhead rates for the year?
b. Compute the variable overhead rate and efficiency variances for the year.
c. Compute the fixed manufacturing overhead budget and volume variances for the year.