306 CH 7 Practice Probs

# 306 CH 7 Practice Probs - Lion Company's direct labor costs...

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Lion Company's direct labor costs for the month of January were as follows: What was Lion's direct labor efficiency variance? Actual rate = Direct labor cost Actual direct labor-hours = \$126,000 20,000 = \$6.30 Labor rate variance = Actual hours × (Actual rate - Standard rate) \$3,000 = 20,000 × (\$6.30 - Standard rate) Standard rate = \$6.15 Labor efficiency variance = Standard rate × (Actual hours - Standard hours) = \$6.15 × (20,000 - 21,000) = \$6,150 favorable Matt Company uses a standard cost system. Information for raw materials for Product RBI for the month of October follows: What is the materials purchase price variance? Materials price variance = Actual quantity purchased × (Actual price - Standard price) = 2,000 × (\$1.55 - \$1.60) = \$100 favorable

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Ravena Labs., Inc. makes a single product which has the following standards: Variable manufacturing overhead is applied on the basis of direct labor hours. The following data are available for October: 3,750 units of compound were produced during the month. There was no beginning direct materials inventory. The ending direct materials inventory was 2,000 ounces. Direct materials purchased: 12,000 ounces for \$225,000.
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## This note was uploaded on 02/15/2010 for the course ACCT 300 taught by Professor Az during the Spring '10 term at Arizona Western College.

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306 CH 7 Practice Probs - Lion Company's direct labor costs...

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