CHAPTER 25
SOLUTIONS TO PROBLEMS: SET B
(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
*9,700 X 2
Materials price variance:
( AQ X AP )
(20,000 X $5.95)
$119,000
–
–
( AQ X SP )
$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
PROBLEM 25-1B
(19,600 X $13.10)
–
(19,400* X $13.00)
$252,200
=
$4,560 U
$256,760
–
–
$254,800
=
$1,960 U
$254,800
–
$252,200
=
$2,600 U
$118,800
=
PROBLEM 25-2B
(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:
( AQ X AP )
(21,000 X $3.70)
$77,700
–
–
( AQ X SP )
(21,000 X $3.50)
$73,500
=
$4,200 U
( AQ X SP )
$73,500
–
–
( SQ X SP )
$77,000
=
( AH X AR )
(3,450 X $11.50)
–
–
( SH X SR )
(3,600 X $12.00)
$43,200
=
( AH X AR )
(3,450 X $11.50)
–
–
( AH X SR )
$41,400
=
$1,725 F
–
–
( SH X SR )
$43,200
–
PROBLEM 25-2B (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
PROBLEM 25-3B
(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
( AQ X AP )
$547,200
–
–
$513,000
=
$34,200 U
( AQ X SP )
$513,000
–
–
( SQ X SP )
$529,875
=
*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
( AH X AR )
(14,800 X $11.20)
$165,760
–
–
(14,800 X $11.45)
$169,460
=
$3,700 F
( AH X SR )
( SH X SR )
(15,700 X $11.45)
=
$10,305 F
$21,420 U
PROBLEM 25-3B (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.
PROBLEM 25-4B
(a) $10,000 ÷ 200,000 = $.05; $1.00 – $.05 = $.95 standard materials price
per pound. OR
200,000 X $1.00 = $200,000; $200,000 – $10,000 = $190,000; $190,000
÷ 200,000 = $.95.
(b) $23,750 ÷ $.95 = 25,000 pounds; 200,000 + 25,000 = 225,000 standard
quantity for 45,000 units or 5.0 pounds (225,000 ÷ 45,000) per unit. OR
$190,000 + $23,750 = $213,750; $213,750 ÷ $.95 = 225,000; 225,000 ÷
45,000 = 5.0 pounds per unit.
PROBLEM 25-5B
(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
(AH X AR)
–
–
$620 U
(1,240 X $20.50)
–
–
=
–
–
PROBLEM 25-5B (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
*PROBLEM 25-6B
(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
*5,500 X 1.5
3. Factory Labor (5,200 X $9.00) ……………………. 46,800
Labor Price Variance
5. Manufacturing Overhead …………………………... 87,500
Accounts Payable ……………………………… 87,500
6. Work in Process Inventory
*PROBLEM 25-6B (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
(c) Overhead Variance (1) …………………………………………… 2,800
Manufacturing Overhead ………………………………… 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
*PROBLEM 25-7B
Overhead controllable variance:
Actual
Overhead
($68,800 + $50,000)
$118,800
–
–
Overhead
Budgeted
[($50,000 + (19,400* X $3.50)]
$117,900
=
$900 U
–
*PROBLEM 25-8B
Overhead controllable variance:
Actual
Overhead
*PROBLEM 25-9B
Overhead controllable variance:
Actual
Overhead
$169,000
–
–
Overhead
Budgeted
$174,455
=
$5,455 F
*PROBLEM 25-10B
Overhead controllable variance:
Actual Overhead
$15,800
[($10,100 + $5,700)
–
–
–
Overhead Budgeted
$16,000
[(1,250* X $8) + $6,000]
=
$200 F