PROBLEM 11-1B
(a) Total materials variance:
( AQ X AP )
(20,000 X $5.95)
$119,000
–
–
( SQ X SP )
(19,400* X $6.00)
$116,400
=
$2,600 U
( AQ X AP )
(20,000 X $5.95)
$119,000
–
–
( AQ X SP )
(20,000 X $6.00)
$120,000
=
$1,000 F
Materials quantity variance:
( AQ X SP )
(20,000 X $6.00)
$120,000
–
–
( SQ X SP )
(19,400 X $6.00)
$116,400
=
$3,600 U
Total labor variance:
–
–
( SH X SR )
(19,400* X $13.00)
$252,200
=
$4,560 U
Labor price variance:
( AH X AR )
(19,600 X $13.10)
$256,760
–
–
( AH X SR )
(19,600 X $13.00)
$254,800
=
$1,960 U
( AH X SR )
(19,600 X $13.00)
$254,800
–
–
( SH X SR )
(19,400 X $13.00)
$252,200
=
$2,600 U
(b) Total overhead variance:
Actual
Overhead
($68,800 + $50,000)
$118,800
–
–
Overhead
Applied
(19,400 X $6.00*)
$116,400
=
$2,400 U
PROBLEM 11-2B
(a) 1. Total materials variance:
( AQ X AP )
(21,000 X $3.70)
$77,700
–
–
( SQ X SP )
(22,000 X $3.50)
$77,000
=
$700 U
( AQ X AP )
(21,000 X $3.70)
$77,700
–
–
( AQ X SP )
(21,000 X $3.50)
$73,500
=
$4,200 U
Materials quantity variance:
( AQ X SP )
(21,000 X $3.50)
$73,500
–
–
( SQ X SP )
(22,000 X $3.50)
$77,000
=
$3,500 F
2. Total labor variance:
( AH X AR )
(3,450 X $11.50)
$39,675
–
–
( SH X SR )
(3,600 X $12.00)
$43,200
=
$3,525 F
( AH X AR )
(3,450 X $11.50)
$39,675
–
–
( AH X SR )
(3,450 X $12.00)
$41,400
=
$1,725 F
Labor quantity variance:
( AH X SR )
(3,450 X $12.00)
$41,400
–
–
( SH X SR )
(3,600 X $12.00)
$43,200
=
$1,800 F
(b) Total overhead variance:
Actual
Overhead
$94,800
–
–
Overhead
Applied
$100,800
(3,600 X $28*)
=
$6,000 F
*($16 + $12)
PROBLEM 11-2B (Continued)
(c) HUANG COMPANY
Income Statement
For the Month Ended July 31, 2014
Sales revenue ……………………………………………. $270,000
Cost of goods sold (at standard) …………………. 221,0001
Gross profit (at standard) ……………………………. 49,000
Variances
Materials price …………………………………….. $ 4,200 U
PROBLEM 11-3B
(a) 1. Total materials variance:
( AQ X AP )
(76,000 X $7.20)
$547,200
–
–
( SQ X SP )
(78,500* X $6.75)
$529,875
=
$17,325 U
*15,700 X 5
Materials price variance:
( AQ X AP )
(76,000 X $7.20)
$547,200
–
–
( AQ X SP )
(76,000 X $6.75)
$513,000
=
$34,200 U
Materials quantity variance:
( AQ X SP )
(76,000 X $6.75)
$513,000
–
–
( SQ X SP )
(78,500 X $6.75)
$529,875
=
$16,875 F
2. Total labor variance
( AH X AR )
(14,800 X $11.20)
$165,760
–
–
( SH X SR )
(15,700 X $11.45)
$179,765
=
$14,005 F
( AH X AR )
(14,800 X $11.20)
$165,760
–
–
( AH X SR )
(14,800 X $11.45)
$169,460
=
$3,700 F
Labor quantity variance:
( AH X SR )
(14,800 X $11.45)
$169,460
–
–
( SH X SR )
(15,700 X $11.45)
$179,765
=
$10,305 F
(b) Total overhead variance:
Actual
Overhead
$169,000
($120,000 + $49,000)
–
–
Overhead
Applied
$147,580
(15,700 X $9.40*)
=
$21,420 U
*$6.25 + $3.15
PROBLEM 11-3B (Continued)
(c) The following variances are more than 5% from standard:
Materials price variance. The actual price of $7.20 is 6.7% higher than
the standard price of $6.75.
Labor quantity variance. The actual hours of 14,800 is 5.7% under the
standard hours of 15,700.
would be $10,305 ÷ $179,765 = 5.7%.
The unfavorable materials price variance was caused by paying more
than the standard cost for the materials purchased. This unfavorable
variance may have been caused by price increases or the purchase of
PROBLEM 11-4B
(a) $10,000 ÷ 200,000 = $.05; $1.00 – $.05 = $.95 standard materials price
per pound. OR
(b) $23,750 ÷ $.95 = 25,000 pounds; 200,000 + 25,000 = 225,000 standard
(c) Standard hours allowed are 90,000 (45,000 X 2).
(d) $10,080 ÷ $12 = 840 hours over standard; 90,000 standard hours +
(e) $18,168 ÷ 90,840 = $.20; $12.00 – $.20 = $11.80 actual rate per hour.
(f) $713,800 ÷ 86,000 = $8.30 predetermined overhead rate per direct
labor hour.
(h) 90,000 X $8.30 = $747,000 overhead applied.
$213,750 + direct labor $1,080,000 + overhead applied $747,000 =
$2,040,750.
PROBLEM 11-5B
(a) Materials price variance:
( AQ X AP )
(2,530 X $2.00*)
$5,060
–
–
( AQ X SP )
(2,530 X $1.80)
$4,554
=
$506 U
*$5,060 ÷ 2,530
Materials quantity variance:
( AQ X SP )
(2,530 X $1.80)
$4,554
–
–
( SQ X SP )
(2,500 X $1.80)
$4,500
=
$54 U
Labor price variance:
(AH X AR)
(1,240 X $21*)
$26,040
–
–
(AH X SR)
(1,240 X $20.50)
$25,420
=
$620 U
*$26,040 ÷ 1,240
Labor quantity variance:
(AH X SR)
(1,240 X $20.50)
$25,420
–
–
( SH X SR )
(1,250* X $20.50)
$25,625
=
$205 F
*2,500 X .5
(b) Total overhead variance:
Actual Overhead
$15,800
[($10,100 + $5,700)
–
–
–
Overhead Applied
$16,250
(1,250 X $13*)
=
$450 F
*($8 + $5)
PROBLEM 11-5B (Continued)
(c)
BONITA LABS
Income Statement
For the Month Ended May 31, 2014
Service revenue …………………………………………….. $55,000
Cost of service provided (at standard)
($18.55 X 2,500) ………………………………………….. 46,375
Gross profit (at standard) ……………………………….. 8,625
Variances
Materials price ………………………………………… $ 506 U
Materials quantity ……………………………………. 54 U
wrong shipping method or rising prices.
The unfavorable materials quantity variance could be caused by inex-
*PROBLEM 11-6B
(a) 1. Raw Materials Inventory (8,100 X $4.00) ……… 32,400
2. Work in Process Inventory
(8,250* X $4.00) ……………………………………… 33,000
3. Factory Labor (5,200 X $9.00) ……………………. 46,800
Labor Price Variance
4. Work in Process Inventory
(5,500 X $9.00) ………………………………………. 49,500
5. Manufacturing Overhead …………………………... 87,500
6. Work in Process Inventory
(5,500 X $15.40) …………………………………….. 84,700
7. Finished Goods Inventory
8. Accounts Receivable ………………………………… 270,000
*PROBLEM 11-6B (Continued)
(b)
Raw Materials Inventory
Materials Price Variance
Work in Process Inventory
(1) 32,400
(2) 32,400
(1) 2,430
(2) 33,000
(4) 49,500
(6) 84,700
(7) 167,200
Factory Labor
Materials Quantity Variance
Finished Goods Inventory
(3) 46,800
(4) 46,800
(2) 600
(7) 167,200
(8) 167,200
Manufacturing Overhead
Labor Price Variance
Cost of Goods Sold
(5) 87,500
(6) 84,700
(3) 1,040
(8) 167,200
Labor Quantity Variance
(4) 2,700
(c) Overhead Variance (1) …………………………………………… 2,800
(d) FRIO MANUFACTURING COMPANY
Income Statement
For the Month Ended January 31, 2014
Sales revenue ………………………………………………… $270,000
Cost of goods sold (at standard)
(5,500 X $30.40) ………………………………………….. 167,200
Gross profit (at standard) ……………………………….. 102,800
Variances