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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