Ch 9 EFILE - Chapter9 StandardCosts Problem912A(45minutes)...

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Chapter 9 Standard Costs Problem 9-12A  (45 minutes) 1. a. Actual Quantity of  Input, at Actual Price Actual Quantity  of Input, at  Standard Price Standard Quantity  Allowed for Output,  at Standard Price (AQ × AP) (AQ × SP) (SQ × SP) 60,000 pounds × $1.95 per pound 60,000 pounds × $2.00 per pound 45,000 pounds* × $2.00 per pound = $117,000 = $120,000 = $90,000 Price Variance, $3,000 F 49,200 pounds × $2.00 per pound = $98,400 Quantity Variance, $8,400 U *15,000 pools × 3.0 pounds per pool = 45,000 pounds Alternatively, the variances can be computed using the formulas: Materials price variance = AQ (AP – SP)  60,000 pounds ($1.95 per pound – $2.00 per pound) = $3,000 F Materials quantity variance = SP (AQ – SQ)  $2.00 per pound (49,200 pounds – 45,000 pounds) = $8,400 U 9-1
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Problem 9-12A  (continued) b. Actual Hours of  Input, at the  Actual Rate Actual Hours of Input,  at the Standard Rate Standard Hours  Allowed for Output, at  the Standard Rate (AH × AR) (AH × SR) (SH × SR) 11,800 hours × $7.00 per hour 11,800 hours × $6.00 per hour 12,000 hours* × $6.00 per hour = $82,600 = $70,800 = $72,000 Rate Variance,  $11,800 U Efficiency Variance,  $1,200 F Total Variance,  $10,600 U *15,000 pools × 0.8 hours per pool = 12,000 hours Alternatively, the variances can be computed using the formulas: Labor rate variance = AH (AR – SR)  11,800 hours ($7.00 per hour – $6.00 per hour) = $11,800 U Labor efficiency variance = SR (AH – SH)  $6.00 per hour (11,800 hours – 12,000 hours) = $1,200 F 9-2
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Problem 9-12A  (continued) c. Actual Hours of  Input, at the  Actual Rate Actual Hours of  Input, at the  Standard Rate Standard Hours  Allowed for Output, at  the Standard Rate (AH × AR) (AH × SR) (SH × SR) 5,900 hours × $3.00 per hour 6,000 hours* × $3.00 per hour $18,290 = $17,700 = $18,000 Rate Variance,  $590 U Efficiency Variance,  $300 F Total Variance,  $290 U *15,000 pools × 0.4 hours per pool = 6,000 hours Alternatively, the variances can be computed using the formulas: Variable overhead rate variance = AH (AR – SR) 5,900 hours ($3.10 per hour* – $3.00 per hour) = $590 U *$18,290 ÷ 5,900 hours = $3.10 per hour Variable overhead efficiency variance = SR (AH – SH)  $3.00 per hour (5,900 hours – 6,000 hours) = $300 F 9-3
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Problem 9-12A  (continued) 2. Summary of variances: Material price variance. ........................... $  3,000 F Material quantity variance. ...................... 8,400 U Labor rate variance. ................................ 11,800 U Labor efficiency variance. ....................... 1,200 F Variable overhead rate variance. ............ 590 U
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This note was uploaded on 02/02/2011 for the course ACCT 226 taught by Professor Smith during the Fall '10 term at South Carolina.

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Ch 9 EFILE - Chapter9 StandardCosts Problem912A(45minutes)...

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