UCF-ACG2071 Ch. 11 Standard Costs and Variances

# UCF-ACG2071 Ch. 11 Standard Costs and Variances - SOLUTIONS...

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IN CLASS EXAMPLES CHAPTER 11 STANDARD COST VARIANCES SOLUTIONS EXAMPLE #1 Direct materials 10 pounds  x \$4.00 per pound \$40  Direct labor 2.0 hours x \$16.00 per hour \$32  Variable manufacturing  overhead  2.0 hours x \$3.00 per hour \$6  Fixed manufacturing overhead 2.0 hours x \$7.00 per hour \$14  Total standard cost per unit \$92 EXAMPLE #2 Direct Standard Standard Cost Materials Cost Per Hamburger one bun \$0.10 each \$0.10 one hamburger patty \$0.20 each \$0.20 one pickle \$0.03 per slice \$0.03 1/8 teaspoon onion \$0.08 per teaspoon \$0.01 1/4 teaspoon of mustard \$0.04 per teaspoon \$0.01 1/2 oz. of ketchup \$0.10 per oz. \$0.05 Total DM Standard Cost \$0.40 Direct Direct  Standard Cost Labor Time Labor Rate Per Hamburger 4 minutes / 20 burgers \$ 6 per hour     1 minute / 5 burgers     .20 minutes / 1 burger \$.10 per minute (\$6.00/60min) \$0.02     Total DL Standard Cost \$0.02 EXAMPLE #3 1. What is the standard quantity of material? Standard Quantity is what SHOULD have been used to produce the Actual output (6000 units of  finished product) 1

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6000 X 1.5 pounds = 9,000 pounds It should have taken 1.5 pounds for each of the 6000 units produced 2. What is the standard quantity of labor? 6000 X 2 hours = 12,000 hours It should have taken 2 hours of labor for each of the 6000 units produced 3. What is the materials price variance?   AQP(AP – SP) 8600 ( \$1.50 - \$1.52) = \$172F AQP = Actual Purchase Quantity AP = Actual Price per pound SP = Budgeted Price per pound It’s favorable because you paid less per pound than you planned.
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