Accounting Chapter 8 19 Variable overhead is assigned to blood tests on the basis

259.

The Collins Corporation uses standard costing and has established the following direct

material and direct labor standards for each unit of the single product it makes:

• Direct materials: 4 gallons at $8 per gallon

• Direct labor: 1 hour at $16 per hour

During July, the company made 6,000 units of product and incurred the following costs:

• Direct materials purchased: 26,800 gallons at $8.20 per gallon

• Direct materials used: 25,200 gallons

• Direct labor used: 5,600 hours at $15.30 per hour

The direct materials purchases variance is computed when the materials are purchased.

The materials quantity variance for July was:

260.

The Collins Corporation uses standard costing and has established the following direct

material and direct labor standards for each unit of the single product it makes:

• Direct materials: 4 gallons at $8 per gallon

• Direct labor: 1 hour at $16 per hour

During July, the company made 6,000 units of product and incurred the following costs:

• Direct materials purchased: 26,800 gallons at $8.20 per gallon

• Direct materials used: 25,200 gallons

• Direct labor used: 5,600 hours at $15.30 per hour

The direct materials purchases variance is computed when the materials are purchased.

The labor rate variance for July was:

261.

The Collins Corporation uses standard costing and has established the following direct

material and direct labor standards for each unit of the single product it makes:

• Direct materials: 4 gallons at $8 per gallon

• Direct labor: 1 hour at $16 per hour

During July, the company made 6,000 units of product and incurred the following costs:

• Direct materials purchased: 26,800 gallons at $8.20 per gallon

• Direct materials used: 25,200 gallons

• Direct labor used: 5,600 hours at $15.30 per hour

The direct materials purchases variance is computed when the materials are purchased.

The labor efficiency variance for July was:

8-804

262.

Berends Corporation makes a product with the following standard costs:

Standard

Quantity

or Hours

Standard

Price or

Rate

Direct materials

9.2

pounds

$3.00 per

pound

Direct labor

0.3 hours

$17.00

per hour

Variable overhead

0.3 hours

$3.00 per

hour

The company reported the following results concerning this product in April.

Actual output

8,800

units

Raw materials used

in production

78,150

pounds

Purchases of raw

materials

85,900

pounds

Actual direct labor-

hours

2,560

hours

Actual cost of raw

materials purchases

$240,520

Actual direct labor

cost

$39,424

Actual variable

overhead cost

$6,912

The company applies variable overhead on the basis of direct labor-hours. The direct

materials purchases variance is computed when the materials are purchased.

The materials quantity variance for April is:

8-805

8-806

263.

Berends Corporation makes a product with the following standard costs:

Standard

Quantity

or Hours

Standard

Price or

Rate

Direct materials

9.2

pounds

$3.00 per

pound

Direct labor

0.3 hours

$17.00

per hour

Variable overhead

0.3 hours

$3.00 per

hour

The company reported the following results concerning this product in April.

Actual output

8,800

units

Raw materials used

in production

78,150

pounds

Purchases of raw

materials

85,900

pounds

Actual direct labor-

hours

2,560

hours

Actual cost of raw

materials purchases

$240,520

Actual direct labor

cost

$39,424

Actual variable

overhead cost

$6,912

The company applies variable overhead on the basis of direct labor-hours. The direct

materials purchases variance is computed when the materials are purchased.

The materials price variance for April is:

8-808

264.

Berends Corporation makes a product with the following standard costs:

Standard

Quantity

or Hours

Standard

Price or

Rate

Direct materials

9.2

pounds

$3.00 per

pound

Direct labor

0.3 hours

$17.00

per hour

Variable overhead

0.3 hours

$3.00 per

hour

The company reported the following results concerning this product in April.

Actual output

8,800

units

Raw materials used

in production

78,150

pounds

Purchases of raw

materials

85,900

pounds

Actual direct labor-

hours

2,560

hours

Actual cost of raw

materials purchases

$240,520

Actual direct labor

cost

$39,424

Actual variable

overhead cost

$6,912

The company applies variable overhead on the basis of direct labor-hours. The direct

materials purchases variance is computed when the materials are purchased.

The labor efficiency variance for April is:

8-810

265.

Berends Corporation makes a product with the following standard costs:

Standard

Quantity

or Hours

Standard

Price or

Rate

Direct materials

9.2

pounds

$3.00 per

pound

Direct labor

0.3 hours

$17.00

per hour

Variable overhead

0.3 hours

$3.00 per

hour

The company reported the following results concerning this product in April.

Actual output

8,800

units

Raw materials used

in production

78,150

pounds

Purchases of raw

materials

85,900

pounds

Actual direct labor-

hours

2,560

hours

Actual cost of raw

materials purchases

$240,520

Actual direct labor

cost

$39,424

Actual variable

overhead cost

$6,912

The company applies variable overhead on the basis of direct labor-hours. The direct

materials purchases variance is computed when the materials are purchased.

The labor rate variance for April is:

8-811

8-812

266.

Berends Corporation makes a product with the following standard costs:

Standard

Quantity

or Hours

Standard

Price or

Rate

Direct materials

9.2

pounds

$3.00 per

pound

Direct labor

0.3 hours

$17.00

per hour

Variable overhead

0.3 hours

$3.00 per

hour

The company reported the following results concerning this product in April.

Actual output

8,800

units

Raw materials used

in production

78,150

pounds

Purchases of raw

materials

85,900

pounds

Actual direct labor-

hours

2,560

hours

Actual cost of raw

materials purchases

$240,520

Actual direct labor

cost

$39,424

Actual variable

overhead cost

$6,912

The company applies variable overhead on the basis of direct labor-hours. The direct

materials purchases variance is computed when the materials are purchased.

The variable overhead efficiency variance for April is:

8-813

8-814

267.

Berends Corporation makes a product with the following standard costs:

Standard

Quantity

or Hours

Standard

Price or

Rate

Direct materials

9.2

pounds

$3.00 per

pound

Direct labor

0.3 hours

$17.00

per hour

Variable overhead

0.3 hours

$3.00 per

hour

The company reported the following results concerning this product in April.

Actual output

8,800

units

Raw materials used

in production

78,150

pounds

Purchases of raw

materials

85,900

pounds

Actual direct labor-

hours

2,560

hours

Actual cost of raw

materials purchases

$240,520

Actual direct labor

cost

$39,424

Actual variable

overhead cost

$6,912

The company applies variable overhead on the basis of direct labor-hours. The direct

materials purchases variance is computed when the materials are purchased.

The variable overhead rate variance for April is:

8-815

268.

Longview Hospital performs blood tests in its laboratory. The following standards have

been set for each blood test performed:

Standard Quantity or Hours

Standard Price or Rate

Direct materials

2.0 plates

$2.75 per plate

Direct labor

0.2 hours

$15.00 per hour

Variable overhead

0.2 hours

$7.00 per hour

During May, the laboratory performed 1,500 blood tests. On May 1 there were no direct

materials (plates) on hand; after a plate is used for a blood test it is discarded. Variable

overhead is assigned to blood tests on the basis of standard direct labor-hours. The

following events occurred during May:

• 3,600 plates were purchased for $9,540

• 3,200 plates were used for blood tests

• 340 actual direct labor-hours were worked at a cost of $5,550

The direct materials purchases variance is computed when the materials are purchased.

The materials price variance for May is:

8-817

8-818

269.

Longview Hospital performs blood tests in its laboratory. The following standards have

been set for each blood test performed:

Standard Quantity or Hours

Standard Price or Rate

Direct materials

2.0 plates

$2.75 per plate

Direct labor

0.2 hours

$15.00 per hour

Variable overhead

0.2 hours

$7.00 per hour

During May, the laboratory performed 1,500 blood tests. On May 1 there were no direct

materials (plates) on hand; after a plate is used for a blood test it is discarded. Variable

overhead is assigned to blood tests on the basis of standard direct labor-hours. The

following events occurred during May:

• 3,600 plates were purchased for $9,540

• 3,200 plates were used for blood tests

• 340 actual direct labor-hours were worked at a cost of $5,550

The direct materials purchases variance is computed when the materials are purchased.

The materials quantity variance for May is:

8-819

8-820

270.

Longview Hospital performs blood tests in its laboratory. The following standards have

been set for each blood test performed:

Standard Quantity or Hours

Standard Price or Rate

Direct materials

2.0 plates

$2.75 per plate

Direct labor

0.2 hours

$15.00 per hour

Variable overhead

0.2 hours

$7.00 per hour

During May, the laboratory performed 1,500 blood tests. On May 1 there were no direct

materials (plates) on hand; after a plate is used for a blood test it is discarded. Variable

overhead is assigned to blood tests on the basis of standard direct labor-hours. The

following events occurred during May:

• 3,600 plates were purchased for $9,540

• 3,200 plates were used for blood tests

• 340 actual direct labor-hours were worked at a cost of $5,550

The direct materials purchases variance is computed when the materials are purchased.

The labor rate variance for May is: