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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:
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
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
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
*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
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
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
