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Chapter 8

# Chapter 8 - Exercise 8-6(30 minutes 1 Actual Quantity of...

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Unformatted text preview: Exercise 8-6 (30 minutes) 1 Actual Quantity of Input, at Actual Price Actual Quantity of Input, at Standard Price Standard Quantity Allowed for Actual Output, at Standard Price (AQ × AP) (AQ × SP) (SQ × SP) 20,000 ounces × \$2.40 per ounce 20,000 ounces × \$2.50 per ounce 18,000 ounces* × \$2.50 per ounce = \$48,000 = \$50,000 = \$45,000 ↑ ↑ ↑ Price Variance, \$2,000 F Quantity Variance, \$5,000 U Total Variance, \$3,000 U *2,500 units × 7.2 ounces per unit = 18,000 ounces Alternatively: Materials price variance = AQ (AP – SP) 20,000 ounces (\$2.40 per ounce – \$2.50 per ounce) = \$2,000 F Materials quantity variance = SP (AQ – SQ) \$2.50 per ounce (20,000 ounces – 18,000 ounces) = \$5,000 U Exercise 8-6 (continued) 2 Actual Hours of Input, at the Actual Rate Actual Hours of Input, at the Standard Rate Standard Hours Allowed for Actual Output, at the Standard Rate (AH × AR) (AH × SR) (SH × SR) \$10,800 900 hours × \$10 per hour 1,000 hours* × \$10 per hour = \$9,000 = \$10,000 ↑ ↑ ↑ Rate Variance, \$1,800 U Efficiency Variance, \$1,000 F Total Variance, \$800 U *2,500 units × 0.4 hour per unit = 1,000 hours Alternatively: Labor rate variance = AH (AR – SR) 900 hours (\$12 per hour* – \$10 per hour) = \$1,800 U *10,800 ÷ 900 hours = \$12 per hour Labor efficiency variance = SR (AH – SH) \$10 per hour (900 hours – 1,000 hours) = 1,000 F Exercise 8-11 (60 minutes) 1. a....
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Chapter 8 - Exercise 8-6(30 minutes 1 Actual Quantity of...

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