CHAPTER 11
SOLUTIONS TO PROBLEMS: SET B
(a) Total materials variance:
( AQ X AP )
(20,000 X $5.95)
–
( SQ X SP )
(19,400* X $6.00)
Materials price variance:
(20,000 X $5.95)
(20,000 X $6.00)
( AQ X AP )
–
( AQ X SP )
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
–
–
=
$1,960 U
( AH X SR )
–
*9,700 X 2
(b) Total overhead variance:
=
Actual
Overhead
–
Overhead
Applied
PROBLEM 11-1B
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
Materials price variance:
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 )
$39,675
–
–
=
$1,725 F
–
( SH X SR )
(b) Total overhead variance:
Actual
Overhead
$94,800
–
–
Overhead
Applied
$100,800
=
$6,000 F
$77,700
–
=
$4,200 U
( AQ X SP )
–
( SQ X SP )
PROBLEM 11-2B (Continued)
(c) HUANG COMPANY
Income Statement
For the Month Ended July 31, 2017
Sales revenue ……………………………………………. $270,000
Cost of goods sold (at standard) …………………. 221,0001
Gross profit (at standard) ……………………………. 49,000
Variances
Materials price …………………………………….. $ 4,200 U
Materials quantity ………………………………… 3,500 F
Labor price …………………………………………. 1,725 F
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
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
Labor price variance:
$165,760
–
$169,460
=
$3,700 F
( AH X AR )
(14,800 X $11.20)
–
( AH X SR )
(14,800 X $11.45)
(b) Total overhead variance:
Actual
Overhead
–
Overhead
Applied
$21,420 U
$547,200
–
$513,000
=
$34,200 U
( AQ X SP )
$513,000
–
–
( SQ X SP )
$529,875
=
$16,875 F
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.
The unfavorable materials price variance was caused by paying more
than the standard cost for the materials purchased. This unfavorable
PROBLEM 11-4B
(a) $10,000 ÷ 200,000 = $.05; $1.00 – $.05 = $.95 standard materials price
(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 +
840 hours = 90,840 actual hours worked. OR
(e) $18,168 ÷ 90,840 = $.20; $12.00 – $.20 = $11.80 actual rate per hour.
(h) 90,000 X $8.30 = $747,000 overhead applied.
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
(b) Total overhead variance:
Actual Overhead
$15,800
[($10,100 + $5,700)
–
–
–
Overhead Applied
$16,250
(1,250 X $13*)
=
$450 F
–
$54 U
(AH X AR)
–
–
$620 U
(1,240 X $20.50)
–
–
$205 F
PROBLEM 11-5B (Continued)
(c) BONITA LABS
Income Statement
For the Month Ended May 31, 2017
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
(d) The unfavorable materials price variance could be caused by using the
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
Materials Price Variance
[8,100 X ($3.70 – $4.00)] ………………….. 2,430
Accounts Payable (8,100 X $3.70) ……….. 29,970
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
[5,200 X ($9.20 – $9.00)] …………………………. 1,040
Factory Wages Payable
(5,200 X $9.20) ………………………………… 47,840
4. Work in Process Inventory
(5,500 X $9.00) ………………………………………. 49,500
5. Manufacturing Overhead …………………………... 87,500
Accounts Payable ……………………………… 87,500
6. Work in Process Inventory
(5,500 X $15.40) …………………………..………… 84,700
Manufacturing Overhead ……………………. 84,700
*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
(c) Overhead Variance (1) …………………………………………… 2,800
(d) FRIO MANUFACTURING COMPANY
Income Statement
For the Month Ended January 31, 2017
Sales revenue ………………………………………………… $270,000
Cost of goods sold (at standard)
(5,500 X $30.40) ………………………………………….. 167,200
Gross profit (at standard) ……………………………….. 102,800
Variances
Materials price ………………………………………… $2,430 F
Manufacturing Overhead
(5) 87,500
(8) 167,200
(4) 2,700
*PROBLEM 11-7B
Overhead controllable variance:
Actual
Overhead
–
Overhead
Budgeted
Overhead volume variance:
Fixed Overhead
X
Normal
Capacity
–
Standard
Hours
*PROBLEM 11-8B
Overhead controllable variance:
Actual
Overhead
–
Overhead
Budgeted
–
*PROBLEM 11-9B
Overhead controllable variance:
Actual
Overhead
$169,000
–
–
Overhead
Budgeted
$174,455
=
$5,455 F
*PROBLEM 11-10B
Overhead controllable variance:
Actual Overhead
$15,800
–
–
Overhead Budgeted
$16,000