chapter_9 - Exercise94(20minutes) 1. Numberofitemsshipped.

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Exercise 9-4  (20 minutes) 1. Number of items shipped. .................................. 140,000 Standard direct labor-hours per item. ................   × 0.04     Total direct labor-hours allowed. ........................ 5,600 Standard variable overhead cost per hour. ........ × $2.80 Total standard variable overhead cost. .............. $15,680 Actual variable overhead cost incurred. ............. $15,950 Total standard variable overhead cost (above).   15,680     Total variable overhead variance. ...................... $        270     Unfavorable 2. 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) 5,800 hours × $2.75 per hour* 5,800 hours × $2.80 per hour  5,600 hours × $2.80 per hour  = $15,950 = $16,240 = $15,680 Variable overhead  spending variance,  $290 F Variable overhead  efficiency variance,  $560 U  Total variance, $270 U  *$15,950÷ 5,800 hours =$2.75 per hour Alternatively, the variances can be computed using the formulas: Variable overhead spending variance: AH(AR – SR) = 5,800 hours ($2.75 per hour – $2.80 per hour) = $290 F  Variable overhead efficiency variance: SR(AH – SH) = $2.80 per hour (5,800 hours – 5,600 hours) = $560 U 
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Exercise 9-8  (30 minutes) 1. a. Notice in the solution below that the materials price variance is  computed on the entire amount of materials purchased, whereas the  materials quantity variance is computed only on the amount of  materials used in production. Actual Quantity of  Inputs, at  Actual Price Actual Quantity of  Inputs, at  Standard Price Standard Quantity  Allowed for Output, at  Standard Price (AQ × AP) (AQ × SP) (SQ × SP) 70,000 diodes ×  $0.28 per diode 70,000 diodes ×  $0.30 per diode 40,000 diodes* ×  $0.30 per diode = $19,600 = $21,000 = $12,000 Price Variance,  $1,400 F 50,000 diodes × $0.30 per diode = $15,000 Quantity Variance,  $3,000 U *5,000 toys × 8 diodes per toy = 40,000 diodes Alternative Solution: Materials Price Variance = AQ (AP – SP) 70,000 diodes ($0.28 per diode – $0.30 per diode) = $1,400 F Materials Quantity Variance = SP (AQ – SQ) $0.30 per diode (50,000 diodes – 40,000 diodes) = $3,000 U
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Exercise 9-8  (continued) b. Direct labor variances: 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)
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This note was uploaded on 11/11/2011 for the course ACC 202 taught by Professor Sue during the Summer '10 term at Michigan State University.

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chapter_9 - Exercise94(20minutes) 1. Numberofitemsshipped.

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