Ch 11 practice problems

# In october 5000 meters of raw material were purchased

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11. In October, 5,000 meters of raw material were purchased at an actual cost of \$4.50 per meter. During October, 4,850 meters of the raw material were used to produce 2,400 units of the completed product. Standards call for 2 meters of the raw material for each unit of the completed product. The standard price of the raw material is \$4.70 per meter. The materials variances for October were: A. Choice A B. Choice B C. Choice C D. Choice D Materials price variance = AQ (AP - SP) = 5,000 (\$4.50 - \$4.70) = \$1,000 F SQ = 2 x 2,400 = 4,800 Materials quantity variance = SP (AQ - SQ) = \$4.70 (4,850 - 4,800) = \$235 U

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12. Discover Motor Company uses a standard cost system to collect costs related to the production of its toothpick motors. The direct labor standard for each toothpick motor is 1.25 hours at a standard cost of \$9.50 per hour. During the month of May, Discover's toothpick motor production used 5,900 direct labor-hours at a total direct labor cost of \$54,575. This resulted in production of 4,800 toothpick motors for May. What is Discover's labor efficiency variance for the month of May? SH = 1.25 x 4,800 = 6,000 Direct labor efficiency variance = SR (AH - SH) = \$9.50 (5,900 - 6,000) = \$950 F 13. The following labor standards have been established for a particular product: The following data pertain to operations concerning the product for the last month: What is the labor efficiency variance for the month? SH = 5.0 x 1,400 = 7,000 Direct labor efficiency variance = SR (AH - SH) = \$19.85 (7,300 - 7,000) = \$5,955 U

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