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116. Seiler & Associates is a consulting firm specializing in business location studies. The
results for last year, along with the budget, are as follows:
Required: (Be sure to indicate whether the variance is favorable or unfavorable.)
a. Prepare a flexible budget using billable hours as the measure of output.
b. Prepare a sales activity variance analysis.
c. Compute the sales price variance.
117. The standard direct labor cost for room cleaning at Hoffman Hotels is $2.50 per room ($10
per hour in wages divided by 4 rooms cleaned per hour). Actual labor costs were $11,330 for the
month. During the period there were 1,100 labor hours worked; 3,920 rooms were cleaned during
the month.
Required: (Be sure to indicate whether the variance is favorable or unfavorable.)
a. Compute the labor price variance for the period.
b. Compute the labor efficiency variance for the period.
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118. The Glenwood Chemicals produces a product by mixing three ingredients to make a
finished product. The standard cost of producing a 50-gallon drum of the product is $19.50. The
standard materials mix and related standard cost of each chemical used in a 50-gallon batch are:
The quantities of chemicals purchased and used during the current production period are shown
in the schedule below. A total of 520 batches were manufactured during the current production
period. The costs and chemical usage variations at the end of the production period are:
Required: (Be sure to indicate whether the variance is favorable or unfavorable.)
a. If variances are recorded at the earliest possible moment, what is the material price variance (in
total and for each ingredient)?
b. What is the material efficiency variance (in total and for each ingredient)?
c. What is the materials yield variance (in total and for each ingredient)?
d. What is the materials mix variance (in total and for each ingredient)?
119. Stoughton Enterprises produces two products, Standard and Deluxe. Actual and budgeted
information for the year is provided below:
Required: (Be sure to indicate whether the variance is favorable or unfavorable.)
a. Compute the sales activity variance for each product.
b. Compute the sales mix variance for each product.
c. Compute the sales quantity variance for each product.
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120. The next year’s budget for Gemma, Inc., is given below:
At the end of the year, the total fixed costs and the variable costs per unit were exactly as
budgeted, but the following units per product line were sold:
Required: (Be sure to indicate whether the variance is favorable or unfavorable.)
a. Compute the sales activity variance for each product.
b. Compute the sales mix variance for each product.
c. Compute the sales quantity variance for each product.
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121. The next year’s budget for Durand, Inc., is given below:
At the end of the year, the total fixed costs and the variable costs per unit were exactly as
budgeted, but the following units per product line were sold:
Required:
(Be sure to indicate whether the variance is favorable or unfavorable.)
a. Compute the sales activity variance for each product.
b. Compute the market share variance for each product.
c. Compute the industry volume variance for each product.
122. The Stangle Company had the following expectations:
Required: (Be sure to indicate whether the variance is favorable or unfavorable.)
a. Compute Stangle’s sales activity variance.
b. Compute Stangle’s market share variance.
c. Computer Stangle’s industry volume variance.
123. Crammond, Inc., builds storage boxes to custom order. Materials include 20 board feet of
lumber at $1.25/board foot. Standards call for 2 hours of labor at $15/hr.
During March, 4,200 boxes were built. Materials purchased totaled $103,890 for 86,300 units of
lumber. Actual lumber usage in production was 82,310 units. The March payroll was $139,360 for
9,150 hours.
Required: (Be sure to indicate whether the variance is favorable or unfavorable.)
a. Compute the direct material price variance.
b. Compute the direct material quantity variance.
c. Compute the direct labor rate variance.
d. Compute the direct labor efficiency variance.
124. The data below relate to a product of Yorktown Company.
Required: (Be sure to indicate whether the variance is favorable or unfavorable.)
a. Compute the direct material price variance.
b. Compute the direct material quantity variance.
c. Compute the direct labor rate variance.
d. Compute the direct labor efficiency variance.
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125. A company’s direct labor standards for a given operation and the actual results for the
current period are provided below:
Standard rates:
Advanced: $18 per hour
Trained: $15 per hour
Novice: $10 per hour
Actual Results:
Units produced: 4,000
Labor used:
2,200 hours of Advanced workers
4,300 hours of Trained workers
1,900 hours of Novice workers
Required: (Be sure to indicate whether the variance is favorable or unfavorable.)
a. Compute the labor efficiency variances for each worker level.
b. Compute the labor mix variances for each worker level.
c. Compute the labor yield variances for each worker level.
126. 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.
127. Dullen Corporation has provided the following data concerning its most important raw
material, compound I51D:
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.
128. 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.
129. Dull Corporation applies overhead to products based on machine-hours. The denominator
level of activity is 8,600 machine-hours. The budgeted fixed manufacturing overhead costs are
$286,380. In October, the actual fixed manufacturing overhead costs were $274,330 and the
standard machine-hours allowed for the actual output were 8,400 machine-hours.
Required:
a. Compute the budget variance for October. Show your work!
b. Compute the volume variance for October. Show your work!
130. Hereford Corporation has provided the following data for February.
Required:
a. Compute the budget variance for February. Show your work!
b. Compute the volume variance for February. Show your work!
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131. 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 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.