Handout - Standard Cost Variances I

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Pennsylvania State University *

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Accounting

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Apr 3, 2024

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Chp 10 – Standard Costing Variances I 1. Calculate the direct labor rate and direct labor efficiency variances using the following data. State whether they were favorable (F) or unfavorable (U). Write the entry to record the variances. Actual Hours 45,000 Standard Hours 50,000 Actual Rate $16 Standard Rate $14 2. Calculate the direct materials price and quantity variances given the following data: The company used 20,000 pounds of material costing $800,000 to produce 5,000 units. The standard number of pounds is 3.5 per unit and the standard price per unit is $42. Indicate whether the variances are favorable (F) or unfavorable (U). Write the entry to record the variances. 3. Calculate the direct labor rate and direct labor efficiency variances using the following data. State whether they were favorable (F) or unfavorable (U). Write the entry to record the variances. Actual Hours 1,230 Standard Hours 1,250 Actual Rate $ 12.50 Standard Rate $ 12.80 4. A company determined that the standard number of pounds per unit should be 5.0 and the standard price per pound should be $3.50. Despite these standards, the company actually used 13,325 pounds of material costing $53,300 to produce 2,700 units. Determine the direct materials price and direct materials quantity variances. State whether the variances are favorable or not. Write the entry to record the variances. 5. A company determined that the standard number of ounces per unit should be 5.0 and the standard price per ounce should be $0.75. The laborers actually used 13,325 ounces costing $9,800 to produce 2,700 units. Determine the direct materials price and quantity variances. State whether the variances are favorable or not. Write the entry to record the variances. 6. A company used 10,000 yards of material costing $500,000 to produce 1,000 units. The standard number of yards is 9.5 per unit and the standard price per yard is $52. Calculate the materials price and quantity variances and indicate whether the variances are favorable (F) or not. Write the entry to record the variances. 7. Calculate the direct labor rate and efficiency variances given the following data: Actual Hours = 40,000; Actual Labor Rate = $12; Standard Hours = 30,000; Standard Labor Rate = $15. Indicate whether the variances are favorable or not. Write the entry to record the variances. 8. A company made 6,000 chairs using 88,000 feet of leather costing a total of $607,200. The standard for one chair is 16 feet of leather at $7 per foot. Calculate the direct materials price and quantity variances. Indicate if the variances are favorable or not. Write the entry to record the variances.

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