cost ch 9 - 93 1. MPV = (AP SP)AQ MPV = ($0.055...

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9–3 1. MPV = (AP – SP)AQ MPV = ($0.055 – $0.060)855,000 = $4,275 F MUV = (AQ – SQ)SP MUV = (855,000 – 825,000)$0.060 = $1,800 U AP × AQ SP × AQ SP × SQ $0.055 × 855,000 $0.060 × 855,000 $0.060 × 825,000 $4,275 F $1,800 U Price Variance Usage Variance 2. LRV = (AR – SR)AH LRV = ($2.25 – $2.00)7,800 = $1,950 U LEV = (AH – SH)SR LEV = (7,800 – 7,500)$2.00 = $600 U AR × AH SR × AH SR × SH $2.25 × 7,800 $2.00 × 7,800 $2.00 × 7,500 $1,950 U $600 U Rate Variance Efficiency Variance 3. Materials 51,300 Direct Materials Price Variance. .............. 4,275 Accounts Payable .................................... 47,025 Work in Process 49,500 Direct Materials Usage Variance. ................... 1,800 Materials ......................... 51,300 Work in Process 15,000 Direct Labor Efficiency Variance. .................. 600 Direct Labor Rate Variance. ........................... 1,950 Wages Payable .................................... 17,550
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9–4 1. Fixed overhead analysis: Applied FOH Actual FOH Budgeted FOH $0.375 × 1,144,000 $440,000 $412,500 $429,000 $27,500 U $16,500 F Spending Volume Note: Fixed OH rate = $412,500/1,100,000 = $0.375 per direct labor hour. The spending variance simply compares what should have been spent with the amount actually spent. One possible interpretation of the volume variance is that it is a measure of error in specifying the denominator volume. “We guessed wrong.” Another possibility is that it signals a gain (loss) from producing and selling more (less) than expected. If the denominator volume used was practical capacity, then it also becomes a measure of unused capacity. However, since the denominator volume is based on expected output and not practical output, the first two interpretations are more appropriate for this example. 2. Variable overhead analysis: Budgeted VOH Applied VOH Actual VOH $0.50 × 1,188,000 $0.50 × 5 × 228,800 $572,000 $594,000 $572,000 $22,000 F $22,000 U Spending Efficiency Note: VOH rate = $550,000/1,100,000 = $0.50 per direct labor hour. The variable overhead spending variance can occur because of changes in the prices of the
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cost ch 9 - 93 1. MPV = (AP SP)AQ MPV = ($0.055...

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