Solutions Manual, Chapter 11 21
Problem 11-9 (continued)
2. Many students will miss parts 2 and 3 because they will try to use
product
costs as if they were
hourly
costs. Pay particular attention to
the computation of the standard direct labor time per unit and the
standard direct labor rate per hour.
Actual Hours of
Input, at the
Actual Rate
Actual Hours of
Input, at the
Standard Rate
Standard Hours
Allowed for Output,
at the Standard Rate
(AH × AR)
(AH × SR)
(SH × SR)
2,800 hours ×
$6.00 per hour*
3,000 hours** ×
$6.00 per hour*
$18,200
= $16,800
= $18,000
Rate Variance,
$1,400 U
Efficiency Variance,
$1,200 F
Spending Variance,
$200 U
*
2,850 standard hours ÷ 1,900 sets = 1.5 standard hours per set,
$9.00 standard cost per set ÷ 1.5 standard hours per set =
$6.00 standard rate per hour.
**
2,000 sets × 1.5 standard hours per set = 3,000 standard hours.
Alternatively, the variances can be computed using the formulas:
Labor rate variance = AH (AR – SR)
22 Managerial Accounting for Managers, 4th Edition
Problem 11-9 (continued)
3.
Actual Hours of
Input, at the
Actual Rate
Actual Hours of
Input, at the
Standard Rate
Standard Hours
Allowed for Output,
at the Standard Rate
(AH × AR)
(AH × SR)
(SH × SR)
2,800 hours ×
$2.40 per hour*
3,000 hours ×
$2.40 per hour*
$7,000
= $6,720
= $7,200
Rate Variance,
$280 U
Efficiency Variance,
$480 F
Spending Variance,
$200 F
*$3.60 standard cost per set ÷ 1.5 standard hours per set
= $2.40 standard rate per hour
Alternatively, the variances can be computed using the formulas:
Solutions Manual, Chapter 11 23
Problem 11-10 (45 minutes)
1.
Standard
Quantity or
Hours
Standard Price
or Rate
Standard
Cost
Alpha6:
Direct materials—X442 ……
1.8 kilos
$3.50 per kilo
$ 6.30
Direct materials—Y661 ……
2.0 liters
$1.40 per liter
2.80
Direct labor—Sintering …….
0.20 hours
$19.80 per hour
3.96
Direct labor—Finishing …….
0.80 hours
$19.20 per hour
15.36
Total …………………………..
$28.42
Zeta7:
Direct materials—X442 ……
3.0 kilos
$3.50 per kilo
$10.50
Direct materials—Y661 ……
4.5 liters
$1.40 per liter
6.30
Direct labor—Sintering …….
0.35 hours
$19.80 per hour
6.93
Direct labor—Finishing …….
0.90 hours
$19.20 per hour
17.28
Total …………………………..
$41.01
24 Managerial Accounting for Managers, 4th Edition
Problem 11-10 (continued)
2. The computations to follow will require the standard quantities allowed
for the actual output for each material.
Standard Quantity Allowed
Material X442:
Production of Alpha6 (1.8 kilos per unit × 1,500 units) ……
2,700 kilos
Production of Zeta7 (3.0 kilos per unit × 2,000 units) ……..
6,000 kilos
Total ……………………………………………………………………
8,700 kilos
Material Y661:
Production of Alpha6 (2.0 liters per unit × 1,500 units) …..
3,000 liters
Production of Zeta7 (4.5 liters per unit × 2,000 units) …….
9,000 liters
Total ……………………………………………………………………
12,000 liters
Direct Materials Variances—Material X442:
Direct Materials Variances—Material Y661:
Materials price variance = AQ (AP – SP)
Solutions Manual, Chapter 11 25
Problem 11-10 (continued)
3. The computations to follow will require the standard quantities allowed
for the actual output for direct labor in each department.
Standard Hours Allowed
Sintering:
Production of Alpha6 (0.20 hours per unit × 1,500 units) ..
300 hours
Production of Zeta7 (0.35 hours per unit × 2,000 units) ….
700 hours
Total ……………………………………………………………………
1,000 hours
Finishing:
Production of Alpha6 (0.80 hours per unit × 1,500 units) ..
1,200 hours
Production of Zeta7 (0.90 hours per unit × 2,000 units) ….
1,800 hours
Total ……………………………………………………………………
3,000 hours
Direct Labor Variances—Sintering:
Direct Labor Variances—Finishing:
Labor rate variance = AH (AR – SR)
Input, at Actual Price
Problem 11-11 (45 minutes)
1. a. Materials quantity variance = SP (AQ – SQ)
*
$3,200 units × 3 foot per unit
**
When used with the formula, unfavorable variances are
positive and favorable variances are negative.
Therefore, $55,650 ÷ 10,500 feet = $5.30 per foot
b. Materials price variance = AQ (AP – SP)
Solutions Manual, Chapter 11 27
Problem 11-11 (continued)
2. a. Labor rate variance = AH (AR – SR)
*
$36,750 ÷ 4,900 hours
**
$1,650 F + $800 U.
***
When used with the formula, unfavorable variances are
positive and favorable variances are negative.
b. Labor efficiency variance = SR (AH – SH)
*
When used with the formula, unfavorable variances are positive
and favorable variances are negative.
Alternative approach to parts (a) and (b):
Actual Hours of
Input, at the
Actual Rate
Actual Hours of Input,
at the Standard Rate
Standard Hours
Allowed for Output,
at the Standard Rate
(AH × AR)
(AH × SR)
(SH × SR)
4,900 hours* ×
$8.00 per hour
4,800 hours ×
$8.00 per hour
$36,750*
= $39,200
= $38,400
Rate Variance,
$2,450 F
Efficiency Variance,
$800 U*
Spending Variance,
$1,650 F*
*Given.
c. The standard hours allowed per unit of product are:
28 Managerial Accounting for Managers, 4th Edition
Problem 11-12 (45 minutes)
month would be:
Blood tests ……………………………..
1,800
Smears ………………………………….
2,400
Total ……………………………………..
4,200
Plates per test …………………………
× 2
Standard quantity allowed ………….
8,400
The variance analysis for plates would be:
Actual Quantity of
Input, at Actual Price
Actual Quantity
of Input, at
Standard Price
Standard Quantity
Allowed for Output,
at Standard Price
(AQ × AP)
(AQ × SP)
(SQ × SP)
12,000 plates ×
$2.50 per plate
8,400 plates ×
$2.50 per plate
$28,200
= $30,000
= $21,000
Price Variance,
$1,800 F
10,500 plates ×
$2.50 per plate =
$26,250
Quantity Variance,
$5,250 U
Alternatively, the variances can be computed using the formulas:
Solutions Manual, Chapter 11 29
Problem 11-12 (continued)
Note that all of the price variance is due to the hospital’s 6% quantity
discount. Also note that the $5,250 quantity variance for the month is
equal to 25% of the standard cost allowed for plates.
2. a. The standard hours allowed for tests performed during the month
would be:
Blood tests: 0.3 hour per test × 1,800 tests ……….
540
hours
Smears: 0.15 hour per test × 2,400 tests …………..
360
hours
Total standard hours allowed …………………………..
900
hours
The variance analysis would be:
Actual Hours of
Input, at the
Actual Rate
Actual Hours of Input,
at the Standard Rate
Standard Hours
Allowed for Output, at
the Standard Rate
(AH × AR)
(AH × SR)
(SH × SR)
1,150 hours ×
$14.00 per hour
900 hours ×
$14.00 per hour
$13,800
= $16,100
= $12,600
Rate Variance,
$2,300 F
Efficiency Variance,
$3,500 U
Spending Variance,
$1,200 U
Alternatively, the variances can be computed using the formulas:
30 Managerial Accounting for Managers, 4th Edition
Problem 11-12 (continued)
is traceable to inadequate supervision of assistants in the lab.
3. The variable overhead variances follow:
Actual Hours of
Input, at the
Actual Rate
Actual Hours of Input,
at the Standard Rate
Standard Hours
Allowed for Output,
at the Standard Rate
(AH × AR)
(AH × SR)
(SH × SR)
1,150 hours ×
$6.00 per hour
900 hours ×
$6.00 per hour
$7,820
= $6,900
= $5,400
Rate Variance,
$920 U
Efficiency Variance,
$1,500 U
Spending Variance,
$2,420 U
Alternatively, the variances can be computed using the formulas:
be favorable (or unfavorable).