Chapter 10 Standard Costs and Variances
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166. Leerar Corporation makes a product with the following standard costs:
In December the company produced 4,200 units using 34,870 ounces of the direct material
and 1,900 direct labor-hours. During the month, the company purchased 39,700 ounces of the
direct material at a total cost of $111,160. The actual direct labor cost for the month was
$35,530 and the actual variable overhead cost was $3,990. The company applies variable
overhead on the basis of direct labor-hours. The direct materials purchases variance is
computed when the materials are purchased.
Required:
a. Compute the materials quantity variance.
b. Compute the materials price variance.
c. Compute the labor efficiency variance.
d. Compute the direct labor rate variance.
e. Compute the variable overhead efficiency variance.
f. Compute the variable overhead rate variance.
Chapter 10 Standard Costs and Variances
Chapter 10 Standard Costs and Variances
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167. Diamond Company produces a single product. The company has set the following
standards for materials and labor:
During the past month, the company purchased 7,000 pounds of direct materials at a cost of
$17,500. All of this material was used in the production of 1,300 units of product. Direct labor
cost totaled $36,750 for the month. The following variances have been computed:
Required:
1. For direct materials:
a. Compute the standard price per pound of materials.
b. Compute the standard quantity allowed for materials for the month’s production.
c. Compute the standard quantity of materials allowed per unit of product.
2. For direct labor:
a. Compute the actual direct labor cost per hour for the month.
b. Compute the labor rate variance.
Chapter 10 Standard Costs and Variances
Chapter 10 Standard Costs and Variances
168. The following materials standards have been established for a particular product:
The following data pertain to operations concerning the product for the last month:
Required:
a. What is the materials price variance for the month?
b. What is the materials quantity variance for the month?
Chapter 10 Standard Costs and Variances
169. 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?
Chapter 10 Standard Costs and Variances
170. The standards for product U31 call for 7.1 liters of a raw material that costs $12.10 per
liter. Last month, 1,900 liters of the raw material were purchased for $23,180. The actual
output of the month was 200 units of product U31. A total of 1,200 liters 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?
Chapter 10 Standard Costs and Variances
171. The following labor standards have been established for a particular product:
The following data pertain to operations concerning the product for the last month:
Required:
a. What is the labor rate variance for the month?
b. What is the labor efficiency variance for the month?
Chapter 10 Standard Costs and Variances
172. The following direct labor standards have been established for product E45O:
The following data pertain to last month’s operations:
Required:
a. What was the labor rate variance for the month?
b. What was the labor efficiency variance for the month?
Chapter 10 Standard Costs and Variances
173. The standards for product C54L specify 4.5 direct labor-hours per unit at $12.40 per
direct labor-hour. Last month 1,560 units of product C54L were produced using 7,000 direct
labor-hours at a total direct labor wage cost of $86,100.
Required:
a. What was the labor rate variance for the month?
b. What was the labor efficiency variance for the month?
Chapter 10 Standard Costs and Variances
174. The following standards for variable overhead have been established for a company that
makes only one product:
The following data pertain to operations for the last month:
Required:
a. What is the variable overhead rate variance for the month?
b. What is the variable overhead efficiency variance for the month?
Chapter 10 Standard Costs and Variances
175. Imme Corporation’s variable overhead is applied on the basis of direct labor-hours. The
company has established the following variable overhead standards for product I81Z:
The following data pertain to the most recent month’s operations during which 1,360 units of
product I81Z were made:
Required:
a. What was the variable overhead rate variance for the month?
b. What was the variable overhead efficiency variance for the month?
Chapter 10 Standard Costs and Variances
176. Stelluti Corporation’s variable overhead is applied on the basis of direct labor-hours. The
standard cost card for product H67F specifies 7.8 direct labor-hours per unit of H67F. The
standard variable overhead rate is $6.50 per direct labor-hour. During the most recent month,
400 units of product H67F were made and 2,900 direct labor-hours were worked.
The actual variable overhead incurred was $20,155.
Required:
a. What was the variable overhead rate variance for the month?
b. What was the variable overhead efficiency variance for the month?
Chapter 10 Standard Costs and Variances
177. 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!
Chapter 10 Standard Costs and Variances
178. 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!
Chapter 10 Standard Costs and Variances
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179. Buis Corporation, which makes landing gears, has provided the following data for a
recent month:
Required:
Determine the rate and efficiency variances for the variable overhead item supplies and
indicate whether those variables are favorable or unfavorable. Show your work!
Chapter 10 Standard Costs and Variances
180. 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!
= (-310 hours) $8.80 per hour = $2,728 F