Chapter 8 - Presentation Solutions 2009

Chapter 8 - Presentation Solutions 2009 - Chapter 8 –...

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Unformatted text preview: Chapter 8 – Presentation Solutions Brief Exercise 8-2 1. Number of chopping blocks.................................................. 4,000 Number of board feet per chopping block............................ × 2.5 Standard board feet allowed................................................ 10,000 Standard cost per board foot................................................ × \$1.80 Total standard cost............................................................... \$18,000 Actual cost incurred.............................................................. \$18,700 Standard cost above............................................................. 18,000 Total variance—unfavorable................................................. \$ 700 2. 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) \$18,700 11,000 board feet × \$1.80 per board foot 10,000 board feet × \$1.80 per board foot = \$19,800 = \$18,000 ↑ ↑ ↑ Price Variance, \$1,100 F Quantity Variance, \$1,800 U Total Variance, \$700 U Alternatively: Materials price variance = AQ (AP – SP) 11,000 board feet (\$1.70 per board foot* – \$1.80 per board foot) = \$1,100 F *\$18,700 ÷ 11,000 board feet = \$1.70 per board foot. Materials quantity variance = SP (AQ – SQ) \$1.80 per board foot (11,000 board feet – 10,000 board feet) = \$1,800 U Chapter 8 Presentation Solutions Page 1 Brief Exercise 8-3 1. Number of meals prepared................................ 6,000 Standard direct labor-hours per meal................ × 0.20 Total direct labor-hours allowed......................... 1,200 Standard direct labor cost per hour.................... × \$9.50 Total standard direct labor cost.......................... \$11,400 Actual cost incurred............................................ \$11,500 Total standard direct labor cost (above)............ 11,400 Total direct labor variance.................................. \$ 100 Unfavorable 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) 1,150 hours × \$10.00 per hour 1,150 hours × \$9.50 per hour 1,200 hours × \$9.50 per hour = \$11,500 = \$10,925 = \$11,400 ↑ ↑ ↑ Rate Variance, \$575 U Efficiency Variance, \$475 F Total Variance, \$100 U Alternatively, the variances can be computed using the formulas: Labor rate variance = AH(AR – SR) = 1,150 hours (\$10.00 per hour – \$9.50 per hour) = \$575 U Labor efficiency variance = SR(AH – SH) = \$9.50 per hour (1,150 hours – 1,200 hours) = \$475 F Chapter 8 Presentation Solutions Page 2 Brief Exercise 8-4...
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Chapter 8 - Presentation Solutions 2009 - Chapter 8 –...

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