Chapter 11 – Weygandt Managerial 7e
Challenge Exercises Solutions
Solution
CE11-1
(a)
Anders Painting Service
Variance Report – Purchasing Department
For the month ended XX
Actual
Gallons Actual Standard Price
Project Purchased Price Price__ Variance Explanation
Arrow Building 3,750 $76.00 $80.00 $15,000 F Poor quality paint purchased/cheaper
(b)
Anders Painting Service
Variance Report – Production Department
For the month ended XX
Actual Standard Standard Quantity
Project Gallons Gallons Price__ Variance Explanation
Arrow Building 3,750 3,500 $80.00 $20,000 U Poor quality paint/needed more
(c) Part 1:
Anders Painting Service
Variance Report – Purchasing Department
For the month ended XX
Actual
Gallons Actual Standard Price
Project Purchased Price Price__ Variance Explanation
Arrow Building 3,650 $78.50 $80.00 $ 5,475 F Paint cheaper than standard cost
CE 11-1 (continued)
(c)
Part 2: Anders Painting Service
Variance Report – Production Department
For the month ended XX
Actual Standard Standard Quantity
Project Gallons Gallons Price__ Variance Explanation
Arrow Building 3,650 3,500 $80.00 $12,000 U Average quality paint/needed more
Besler Building 3,800 4,000 $80.00 16,000 F Average quality paint/needed less
Part 3:
The change to the new supplier appears to be beneficial. Both the overall price variance and
quantity variance have improved. Further investigation would still be required into the quantity
variances for the Arrow Building and Cartwright Building projects.
Solution
CE 11-2
(a) 1.25 hours + .05 (1.25 hours) + .15 (1.25 hours) = 1.25 + .0625 + .1875 = 1.5 hours
(b) $50 + .12($50) + .20($50) = $50 + $6 + $10 = $66 per hour
(e) (1) (AQ x AP) – (AQ x SP) = Direct labor price variance
(80 pianos x 1.75 hours/piano x $62.25) – (80 pianos x 1.75 hours/piano x $66) =
$8,715 – $9,240 = $525 Favorable
CE 11-2 (continued)
(4) The part time piano tuner was hired at a cheaper labor rate but because he/she had less
experience, was not as fast at tuning the pianos. The savings due to the cheaper labor