ElizabethHampton_ACG3341-1_Week8

# ElizabethHampton_ACG3341-1_Week8 - Exercise 7-22 Materials...

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Exercise 7-22: Materials and manufacturing labor variances Consider the following Data collected for Great Homes, Inc. Direct Materials Direct Manufacturing Labor Cost incurred: Actual inputs x actual prices \$200,000 90,000 Actual inputs x standard prices 214,000 86,000 Standard inputs allowed for actual output x standard prices 225,000 80,000 Compute the price, efficiency, and flexible-budget variances for direct materials and direct manufacturing labor. Actual Costs Incurred Flexible Budget Direct Materials \$200,000 \$214,000 \$225,000 <-------> <-------> \$14,000 F \$11,000 F Price Variance Efficiency variance <---------------------------------------------------------------------------------------> \$25,000 F Flexible-budget variance Actual Costs Incurred Flexible Budget Direct Manufacturing \$90,000 \$86,000 \$80,000 Labor <-------> <-------> \$4,000 U \$6,000 F Price Variance Efficiency variance <---------------------------------------------------------------------------------------> \$10,000 U Flexible-budget variance Actual Input Quantity x Budgeted Price Actual Input Quantity x Budgeted Price

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Exercise 7-23: Direct materials and direct manufacturing labor variances GloriaDee Inc. designs and manufactures T-shirts to brand-name clothes retailers in lots of one dozen. GloriaDee's May 2011 static budget and actual results for direct inputs are as follows: Static Budget Number of T-shirt Lots(1 lot= 1 dozen) 500 Per Lot of T-Shirts: Direct Materials 12 meters at \$1.50 per meter =\$18.00 Direct Manufacturing Labor 2 hours at \$8.00 per hour = \$16.00
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• Winter '13
• Cost Accounting, Direct material price variance, Direct manufacturing Labor, Direct Manufacturing

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