# Accounting Chapter 17 Virginia Enterprises Produces Two Products Standard

Document Type
Test Prep
Book Title
Fundamentals of Cost Accounting 5th Edition
Authors
Michael Maher, Shannon Anderson, William Lanen
17-121
123.
Virginia Enterprises produces two products, Standard and Deluxe. Actual and budgeted
information for the year is provided below:
Standard
Deluxe
Budget
Actual
Budget
Unit sales
4,000
5,600
12,000
Sales
\$6,000
\$7,560
\$12,000
Variable costs
2,400
2,800
\$6,000
124.
The next year's budget for Temper, Inc., is given below:
17-122
Product 1
Product 2
Sales
\$945,000
\$688,500
Variable costs
459,900
297,000
Fixed costs
300,000
300,000
Net income
\$185,100
\$91,500
Units
126,000
54,000
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:
Product Line
Units
Sales
1
126,200
\$958,579
2
56,800
\$721,010
17-124
125.
17-125
126.
A chemical company produces a product used by manufacturers of plastics. Two basic
chemicals go into this product. The standards for one-liter of this product are:
Chemical 1: 800 ml. @ \$50 per liter
Chemical 2: 200 ml. @ \$200 per liter
During the last period, 5,000 liters of the solvent were produced and the company
purchased the following amounts of each chemical:
Chemical 1: 5,400 liters @ \$59.00 per liter
Chemical 2: 900 liters @ \$225.00 per liter
Because these chemicals are volatile, the company uses them immediately upon
purchase, so there are no beginning and ending inventories.
Required:
(Be sure to indicate whether the variance is favorable or unfavorable.)
17-126
127.
A company's direct labor standards for a given operation and the actual results for the
current period are provided below:
Standard rates:
17-127
17-128
128.
A company's direct labor standards for a given operation and the actual results for the
current period are provided below:
Standard rates:
Class A: \$24 per hour
Class B: \$12 per hour
Time to produce one unit:
Three (3) Class A workers at 20 minutes each
Two (2) Class B workers at 15-minutes each
Actual Results:
Units produced: 6,000
Labor used:
5,800 hours of Class A workers; total payroll: \$156,600
3,500 hours of Class B workers; total payroll: \$49,000
Required:
(Be sure to indicate whether the variance is favorable or unfavorable.)
17-131
129.
The Foggybottom 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:
Chemical
Std input
quantity
Std cost
per gal
Total
cost
A
30
\$0.25
\$7.50
B
20
0.45
9.00
C
10
0.30
3.00
60
\$19.50
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:
Chemical
Quantity
purchased
Total
cost
Quantity
used
A
17,800
\$4,365
16,600
B
13,000
6,240
11,880
C
5,500
1,520
5,140
36,300
\$33,620
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)?
17-134
130.
A company's direct labor standards for a given operation and the actual results for the
current period are provided below:
Standard rates:
Trained: \$15 per hour
Novice: \$10 per hour
Time to produce one unit:
One (1) Advanced worker at 30 minutes each =
30 minutes/unit
Three (3) Trained workers at 20 minutes each =
60 minutes/unit
Two (2) Novice workers at 15-minutes each =
30 minutes/unit
120 minutes/unit
131.
17-137
132.
Delaware Corporation has provided the following data for February.
Denominator level of
activity
4,400
machine-
hours
Budgeted fixed
costs
\$107,360
Standard machine-hours
allowed for the actual
output
4,200
machine-
hours
Actual fixed manufacturing
\$104,470
133.
Vegas 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
17-138
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:
\$211,680
cost
\$315,000
Actual machine-hours
126,000
Units produced
120,000
134.

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