Exercise 9.23
Exercise 9.24
Exercise 9.25
Exercise 9.26
Exercise 9.27
PROBLEMS
Problem 9.28
1. Direct materials: $4.20 × 9,800 = $41,160
2. Actual Cost Budgeted Cost Variance
3. MPV = (AP – SP)AQ
MPV = ($2.74 – $2.80)14,600 = $876 F
AP × AQ
= $2.74 × 14,600
= $40,004
SP × AQ
= $2.80 × 14,600
= $40,880
SP × SQ
= $2.80 × 14,700
= $41,160
Problem 9.28 (Concluded)
4. LRV = (AR – SR)AH
LRV = ($19.60 – $20.00)10,900 = $4,360 F
LEV = (AH – SH)SR
LEV = (10,900 – 10,780)$20.00 = $2,400 U
Problem 9.29
1. Standard fixed overhead rate = $770,000/(100,000 × 2)
2. Fixed: (97,000 × 2) × $3.85 = $746,900
Variable: (97,000 × 2) × $2.22 = $430,680
Problem 9.29 (Continued)
3. Fixed overhead analysis:
4. Variable overhead analysis:
Actual Fixed
Overhead
Budgeted Fixed
Overhead
Actual Variable
Overhead
Budgeted Variable
Overhead
Problem 9.29 (Concluded)
5. The efficiency and volume variances are the same as those of a four-variance
analysis; only a total spending variance can be computed. Thus, the three–
6. Work in Process ………………………………………….. 1,177,580
Variable Overhead Control ………………………. 430,680
Fixed Overhead Control ………………………….. 746,900
Variable Overhead Control …………………………... 435,600
Problem 9.30
1. MPV = (AP – SP)AQ
MPV = ($2.50 – $2.60)274,000
= $27,400 F
Problem 9.30 (Continued)
2. LRV = (AR – SR)AH
LRV = ($17.95 – $18.00)40,100
= $2,005 F
LEV = (AH – SH)SR
3. Fixed overhead analysis:
Actual Fixed
Overhead
Budgeted Fixed
Overhead
Applied Fixed
Overhead
Problem 9.30 (Continued)
4. Variable overhead analysis:
5. a. Materials ………………………………………. 712,400
Direct Materials Price Variance …. 27,400
Accounts Payable …………………….. 685,000
b. Work in Process ……………………………. 689,000
Actual Variable
Overhead
Budgeted Variable
Overhead
Problem 9.30 (Concluded)
f. Closing direct materials and direct labor variances:
Direct Materials Price Variance ………………… 27,400
Direct Labor Rate Variance ……………………… 2,005
Overhead:
Fixed Overhead Volume Variance ……………. 3,000
Variable Overhead Spending Variance …….. 1,700
Problem 9.31
1. Variable overhead efficiency variance = (AH – SH)SVOR
$24,000 = (1.3SH – SH)$2
2. LEV = (AH – SH)SR
$120,000 = (52,000 – 40,000)SR
3. SH = 2 × Units produced
Problem 9.32
1. MPV = (AP – SP)AQ
MPV = ($5.36 – $5.40)135,400 = $5,416 F
MUV = (AQ – SQ)SP
2. LRV = (AR – SR)AH
LRV = ($17.98 – $18.00)36,500 = $730 F
3. Two-variance analysis:
Actual Overhead
= $278,000
Budgeted Fixed
Overhead +
Problem 9.32 (Continued)
4. Four-variance analysis:
Variable overhead variances:
Formula approach:
Variable overhead spending variance = Actual VOH – (SVOR × AH)
= $168,000 – ($4.00 × 36,500)
Fixed overhead variances:
Actual Variable
Overhead
= $168,000
Budgeted Variable
Overhead
SVOR × AH
Actual Fixed
Overhead
= $110,000
Budgeted Fixed
Overhead
SFOR × AH
Problem 9.32 (Continued)
5. The company should discontinue the purchase of the inferior direct materials,
as it costs the company more. The budgeted cost of direct materials at the
20,600 units production level is $778,680 ($5.40 × 7 × 20,600), and the actual
6. Materials……………………………………………. 731,160
Direct Materials Price Variance ……… 5,416
Accounts Payable …………………………. 725,744
Work in Process ………………………………… 778,680
Direct Materials Usage Variance …………. 6,480
Problem 9.32 (Concluded)
Work in Process ……………………………………… 108,150
Fixed Overhead Control ……………………… 108,150
Variable Overhead Spending Variance …….. 22,000
Problem 9.33
1. Small staplers:
Standard Standard Standard
Price Usage Cost
Direct materials ………….. $ 1.60 0.375 lb. $ 0.60
Direct labor ………………… 8.00 0.100 hr. 0.80
Regular staplers:
Standard Standard Standard
Price Usage Cost
Direct materials ………….. $ 1.60 0.625 lb. $ 1.00
Direct labor ………………… 8.00 0.150 hr. 1.20
Problem 9.33 (Continued)
2. MPV = (AP – SP)AQ
MPV = ($1.55 – $1.60)56,000 = $2,800 F
MUV = (AQ – SQ)SP
MUV (Small) = [13,000 – (0.375 × 35,000)]$1.60 = $200 F
3. LRV = (AR – SR)AH
LRV = ($7.75 – $8.00)14,800 = $3,700 F
LEV = (AH – SH)SR
LEV (Small) = [3,600 – (0.1 × 35,000)]$8.00 = $800 U