Weygandt, Accounting Principles, 12e,
Chapter Twenty Five
Solutions to Challenge Exercises
Solution
CE25-1
(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 25-1 (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
Solution
CE 25-2
(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
(c) 1.5 x $66 = $99 per piano
(d) (AQ x SP) – (SQ x SP) = Direct labor quantity variance
$108.90 – $99 = $9.90 Unfavorable
(e) (1) (AQ x AP) – (AQ x SP) = Direct labor price variance
CE 25-2 (continued)
(4) The part time piano tuner was hired at a cheaper labor rate but because he/she had less