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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