ACCT 225 - Assignment 7-3

ACCT 225 - Assignment 7-3 - Problem 8-13A 1 A. Actual...

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Unformatted text preview: Problem 8-13A 1 A. Actual Quantity of Input at Actual Price (AQ AP) Actual Quantity of Input, at Standard Price (AQ SP) 11500 ounces $22.00 per ounce $253,000 Price Variance $16,100 F $236,900 (236900/11500=20.60 B. 2 A. Yes, the contract probably should be signed. The new price of $20.60 per oun Actual Hours of Input, at the Actual Rate (AH AR) 5,600 hours $12.00 per hour Actual Hours of Input, at the Standard Rate (AH SR) 35 technicians 160 hours 5,600 hours $11.90 per hour per technician = 5,600 hours = $67,200 $560 F $66,640 Total Variance $1106 U B. 3 No, the new labor mix probably should not be continued. Although it decrease Actual Hours of Input, at the Actual Rate (AH AR) $16,416 Spending Variance, $864 F Total Varia $36 U Both the labor efficiency variance and the variable overhead efficiency variance are com Actual Quantity of Input, at Standard Price (AQ SP) 11500 ounces $22.00 per ounce $253,000 Standard Quantity Allowed for Actual Output, at Standard Price (SQ SP) 12000 ounces = (6000 oz x 2.0 per ounce) $22.00 per ounce $264,000 Quantity Variance, $11000 U w price of $20.60 per ounce is substantially lower than the old price of $22.00 per ounce, resulting i Standard Hours Actual Hours of Input, at the Standard Rate (AH SR) Allowed for Actual Output, at the Standard Rate (SH SR) 5,460 $11.90 per hour hours $11.90 per hour $66,640 Efficiency Variance, $1666 U $64,974 ariance 06 U ued. Although it decreases the average hourly labor cost from $12.00 to $11.90, thereby causing a Actual Hours of Input, at the Standard Rate (AH SR) 5,760 hours $3.00 per hour $17,280 36 technicians 160 hours per technician = 5,600 hours Standard Hours Allowed for Actual Output, at the S (SH SR) 5460 hours $3.00 per hour $16,380 ariance, Efficiency Variance, F Total Variance, $36 U $900 U fficiency variance are computed by comparing actual laborhours to standard laborhours. If the labo oz x 2.0 per ounce) 22.00 per ounce, resulting in a favorable price variance of $16,100 for the month. 4200 units 1.3 hours per technician = 5,460 hrs $11.90, thereby causing a $560 favorable labor rate variance, this savings is more than offset by a la Standard Hours for Actual Output, at the Standard Rate (SH SR) 5460 hours $3.00 per hour $16,380 4200 units 1.3 hours per unit dard laborhours. If the labor efficiency variance is unfavorable, then the variable overhead efficienc ore than offset by a large unfavorable labor efficiency variance for the month. The new labor mix inc le overhead efficiency variance will be unfavorable. e new labor mix increases overall labor costs. ...
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