Homework _11 fall 2009 ANSWERS - ORIE 3150 Homework #11 1....

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ORIE 3150 Homework #11 1. The following data applies to Wallace Shirt Company’s production facility in Lower Slobodia. Standards (per shirt) Material: 3 yards at $2 per yard Labor: 2 hours at $3 per hour Overhead: $130,000 budgeted, all fixed Actual Data Material: 25,000 yards of material were purchased and used in production. The cost was $2.10 per yard. Labor: 17,000 hours at $2.50 per hour Overhead: $112,000 actual overhead 10,000 shirts were budgeted for the month, but only 9,000 shirts were actually manufactured. a) Find the direct material price variance and the direct material quantity variance. DMPV = AQ(AP – SP) = 25000(2.10 – 2) = $2,500 U DMQV = SP(AQ – SQ) = 2(25000 – 27000) = $4,000 F b) Find the direct labor rate variance and the direct labor quantity variance. LPV = AH(AR – SR) = 17000(2.5 – 3) = $8,500 F LQV = SR(AH – SH) = 3(17000 – 18000) = $3,000 F
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2. Group Industries makes cookware, broken up into Consumer and Professional divisions. During the past year, the financial data for the Consumer Division were as follows: Sales $23,600,000 Cost of Goods Sold 12,180,000 8,100,000 Allocated Corporate Expenses: Interest 1,250,000 Allocated Corporate Expenses: Headquarters 1,000,000 Division Operating Assets, start of 1 st quarter 12,000,000 Division Operating Assets, end of 1 st quarter 9,800,000 Division Operating Assets, end of 2 nd quarter 10,850,000 Division Operating Assets, end of 3 rd quarter 11,250,000 Division Operating Assets, end of 4 th quarter 12,000,000 a) What is the controllable margin for the Consumer Division? 23,600,000 – 12,180,000 – 8,100,000 = $3,320,000
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Homework _11 fall 2009 ANSWERS - ORIE 3150 Homework #11 1....

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