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Demo for Chapter 8

# Demo for Chapter 8 - Chapter 8 DemoProblem1...

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Chapter 8 Demo Problem 1 Material Variances    Harmon Household Products, Inc., manufactures a number of  consumer items for general household use. One of these  products, a chopping block, requires an expensive hardwood.  During a recent month, the company manufactured 4,000  chopping blocks using 11,000 board feet of hardwood. The  hardwood cost the company \$18,700.  The company's standards for one chopping block are 2.5 board  feet of hardwood, at a cost of \$1.80 per board foot.  Required:   1. What cost for wood should have been incurred to make  4,000 chopping blocks? How much greater or less is this  than the cost that was incurred?  2. Break down the difference computed in (1) above into a  materials price variance and a materials quantity variance.  1

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Chapter 8 1. Number of chopping blocks  4,000     Number of board feet per chopping  block  x 2.5           Standard board feet allowed  10,000     Standard cost per board foot  x \$1.80           Total standard cost  \$018,00           Actual cost incurred  \$ 18,700     Standard cost above  18,000           Total variance-unfavorable  \$ 700        2.  Actual Quantity of  Inputs, at Actual  Price  Actual Quantity of  Inputs, at Standard
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