1.Majer Corporation makes a pr
1.Majer Corporation makes a product with the following standardcosts:
| Standard Quantity orHours | Standard Price orRate | Standard Cost PerUnit | |||||||
| Direct materials | 6.4 | ounces | $ | 3.00 | per ounce | $ | 19.20 | ||
| Direct labor | 0.4 | hours | $ | 13.00 | per hour | $ | 5.20 | ||
| Variable overhead | 0.4 | hours | $ | 5.00 | per hour | $ | 2.00 | ||
The company reported the following results concerning thisproduct in February.
| Originally budgeted output | 4,800 | units | |
| Actual output | 4,900 | units | |
| Raw materials used inproduction | 30,230 | ounces | |
| Actual direct labor-hours | 1,910 | hours | |
| Purchases of raw materials | 32,600 | ounces | |
| Actual price of rawmaterials | $ | 2.90 | per ounce |
| Actual direct labor rate | $ | 12.40 | per hour |
| Actual variable overheadrate | $ | 4.90 | per hour |
The company applies variable overhead on the basis of directlabor-hours. The direct materials purchases variance is computedwhen the materials are purchased.
The labor efficiency variance for February is:
Multiple Choice
$650 U
$650 F
$620 F
$620 U
2. Tharaldson Corporation makes a product with the followingstandard costs:
| Standard Quantity orHours | Standard Price orRate | Standard Cost PerUnit | |||||||
| Direct materials | 6.5 | ounces | $ | 2.00 | per ounce | $ | 13.00 | ||
| Direct labor | 0.2 | hours | $ | 23.00 | per hour | $ | 4.60 | ||
| Variable overhead | 0.2 | hours | $ | 6.00 | per hour | $ | 1.20 | ||
The company reported the following results concerning thisproduct in June.
| Originally budgeted output | 2,700 | units | |
| Actual output | 2,800 | units | |
| Raw materials used inproduction | 19,380 | ounces | |
| Purchases of raw materials | 21,400 | ounces | |
| Actual direct labor-hours | 500 | hours | |
| Actual cost of raw materialspurchases | $ | 40,660 | |
| Actual direct labor cost | $ | 12,050 | |
| Actual variable overheadcost | $ | 3,100 | |
The company applies variable overhead on the basis of directlabor-hours. The direct materials purchases variance is computedwhen the materials are purchased.
The labor rate variance for June is:
Multiple Choice
$616 F
$616 U
$550 F
$550 U
Answer:
- Question 1
–Working
|
Actual DATAfor |
4900 |
units |
|
|
Quantity(AQ) |
Rate(AR) |
ActualCost |
|
|
Direct labor |
1910 |
$ 12.40 |
$ 23,684.00 |
|
Standard DATAfor |
4900 |
units |
|
|
Quantity(SQ) |
Rate(SR) |
StandardCost |
|
|
[A] |
[B] |
[A x B] |
|
|
Direct labor |
( 0.4 hrs x 4900 units)=1960 hrs |
$ 13.00 |
$ 25,480.00 |
–Answer
|
Labour EfficiencyVariance |
||||||
|
( |
StandardHours |
– |
ActualHours |
) |
x |
StandardRate |
|
( |
1960 |
– |
1910 |
) |
x |
$ 13.00 |
|
650 |
||||||
|
Variance |
$ 650.00 |
Favourable-F |
||||
—Correct Answer = Option #2: $ 650F
- Question 2
–Working
|
Actual DATAfor |
2800 |
units |
|
|
Quantity(AQ) |
Rate(AR) |
ActualCost |
|
|
Direct labor |
500 |
$ 24.10 [12050 / 500] |
$ 12,050.00 |
|
Standard DATAfor |
2800 |
units |
|
|
Quantity(SQ) |
Rate(SR) |
StandardCost |
|
|
[A] |
[B] |
[A x B] |
|
|
Direct labor |
( 0.2 hrs x 2800 units)=560 hrs |
$ 23.00 |
$ 12,880.00 |
–Answer
|
Labor RateVariance |
||||||
|
( |
StandardRate |
– |
ActualRate |
) |
x |
Actual LaborHours |
|
( |
$ 23.00 |
– |
$ 24.10 |
) |
x |
500 |
|
-550 |
||||||
|
Variance |
$ 550.00 |
Unfavourable-U |
||||
—Correct Answer = Option #4 $ 550U
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