East Sun manufactures wooden tables that have a standard materials cost of three feet of lumber at $2.00 per foot. During October, 9,000 feet of lumber costing $2.15 per foot were used in making 2,800 tables. Calculate the materials price and quantity variances.

East Sun manufactures wooden tables that have a standard materials cost of three feet of lumber at $2.00 per foot. During October, 9,000 feet of lumber costing $2.15 per foot were used in making 2,800 tables. Calculate the materials price and quantity variances.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter9: Standard Costing: A Functional-based Control Approach

Section: Chapter Questions

Problem 20E: Jameson Company produces paper towels. The company has established the following direct materials...

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Jameson Company produces paper towels. The company has established the following direct materials and direct labor standards for one case of paper towels: During the first quarter of the year, Jameson produced 45,000 cases of paper towels. The company purchased and used 135,700 pounds of paper pulp at 0.38 per pound. Actual direct labor used was 91,000 hours at 12.10 per hour. Required: 1. Calculate the direct materials price and usage variances. 2. Calculate the direct labor rate and efficiency variances. 3. Prepare the journal entries for the direct materials and direct labor variances. 4. Describe how flexible budgeting variances relate to the direct materials and direct labor variances computed in Requirements 1 and 2.
Corolla Manufacturing has a standard cost for steel of $20 per pound for a product that uses 4 pounds of steel. During September, Corolla purchased and used 4,200 pounds of steel to make 1,040 units. They paid $20.75 per pound for the steel. Compute the direct materials price variance, the direct materials quantity variance, and the total direct materials cost variance for the month of September. What would change if Corolla had made 2,200 units?
Ed Co. manufactures two types of O rings, large and small. Both rings use the same material but require different amounts. Standard materials for both are shown. At the beginning of the month, Edve Co. bought 25,000 feet of rubber for $6.875. The company made 3,000 large O rings and 4,000 small O rings. The company used 14,500 feet of rubber. A. What are the direct materials price variance, the direct materials quantity variance, and the total direct materials cost variance? B. If they bought 10,000 connectors costing $310, what would the direct materials price variance be for the connectors? C. If there was an unfavorable direct materials price variance of $125, how much did they pay per toot for the rubber?
Case made 24,500 units during June, using 32,000 direct labor hours. They expected to use 31,450 hours per the standard cost card. Their employees were paid $15.75 per hour for the month of June. The standard cost card uses $15.50 as the standard hourly rate. A. Compute the direct labor rate and time variances for the month of June, and also calculate the total direct labor variance. B. If the standard rate per hour was $16.00, what would change?
At the beginning of the year, Lopez Company had the following standard cost sheet for one of its chemical products: Lopez computes its overhead rates using practical volume, which is 80,000 units. The actual results for the year are as follows: (a) Units produced: 79,600; (b) Direct labor: 158,900 hours at 18.10; (c) FOH: 831,000; and (d) VOH: 112,400. Required: 1. Compute the variable overhead spending and efficiency variances. 2. Compute the fixed overhead spending and volume variances.
Botella Company produces plastic bottles. The unit for costing purposes is a case of 18 bottles. The following standards for producing one case of bottles have been established: During December, 78,000 pounds of materials were purchased and used in production. There were 15,000 cases produced, with the following actual prime costs: Required: 1. Compute the materials variances. 2. Compute the labor variances. 3. CONCEPTUAL CONNECTION What are the advantages and disadvantages that can result from the use of a standard costing system?
Illinois Company is a medium-sized company that makes dresses. During the month of June, 8,575 dresses were made. All material purchases were used to make the dresses. The company had this information: standard per dress of 6 yards of material at $6.20 per yard. The actual quantity was 52,000 yards at a cost of $325,520. Compute the direct materials price variance, the direct materials quantity variance, and the total direct materials cost variance.
Shasta Fixture Company manufactures faucets in a small manufacturing facility. The faucets are made from brass. Manufacturing has 70 employees. Each employee presently provides 38 hours of labor per week. Information about a production week is as follows: Instructions Determine (a) the standard cost per unit for direct materials and direct labor; (b) the direct materials price variance, direct materials quantity variance, and total direct materials cost variance; and (c) the direct labor rate variance, direct labor time variance, and total direct labor cost variance.
April Industries employs a standard costing system in the manufacturing of its sole product, a park bench. They purchased 60,000 feet of raw material for $300,000, and it takes S feet of raw materials to produce one park bench. In August, the company produced 10,000 park benches. The standard cost for material output was $100,000, and there was an unfavorable direct materials quantity variance of $6,000. A. What is April Industries standard price for one unit of material? B. What was the total number of units of material used to produce the August output? C. What was the direct materials price variance for August?
Cardiff Inc. manufactures men’s sport shirts for large stores. It produces a single quality shirt in lots of a dozen according to each customer’s order and attaches the store’s label. The standard costs for a dozen shirts include the following: During October, Cardiff worked on three orders for shirts. Job cost records for the month disclose the following: The following information is also available: Cardiff purchased 95,000 yards of materials during October at a cost of $53,200. The materials price variance is recorded when goods are purchased, and all inventories are carried at standard cost. Direct labor incurred amounted to $112,750 during October. According to payroll records, production employees were paid $10.25 per hour. Overhead is applied on the basis of direct labor hours. Factory overhead totaling $22,800 was incurred during October. A total of $288,000 was budgeted for overhead for the year, based on estimated production at the plant’s normal capacity of 48,000 dozen shirts per year. Overhead is 60% fixed and 40% variable at this level of production. There was no work in process at October 1. During October, Lots 30 and 31 were completed, and all materials were issued for Lot 32, which was 80% completed as to labor and overhead. Required: Prepare a schedule computing the October total standard cost of Lots 30, 31, and 32. Prepare a schedule computing the materials price variance for October and indicate whether it is favorable or unfavorable. For each lot produced during October, prepare schedules computing the following (indicate whether favorable or unfavorable): Materials quantity variance in yards. Labor efficiency variance in hours. (Hint: Don’t forget the percentage of completion.) Labor rate variance in dollars. Prepare a schedule computing the total flexible-budget and production-volume overhead variances for October and indicate whether they are favorable or unfavorable. Give some reasons as to why the production-volume variance may be unfavorable and why it is important to correct the situation.
Smith Industries uses a cost system that carries direct materials inventory at a standard cost. The controller has established these standards for the cost of one basket (unit): Smith Industries made 3,000 baskets in July and used 15,500 pounds of material to make these units. Smith Industries paid $39,370 for the 15,500 pounds of material. A. What was the direct materials price variance for July? B. What was the direct materials quantity variance for July? C. What is the total direct materials cost variance? D. If Smith Industries used 15,750 pounds to make the baskets, what would be the direct materials quantity variance?
Marymount Company makes one product. In the month of April, it made 3,500 units. Workers were paid $32 per hour for labor, for a total of $718,848. The standard hours per unit are 6.4, and the standard labor wage rate is $38.40 per hour. A. What are the actual hours worked? B. What are the standard hours for the units made? C. What is the direct labor rate variance for April? D. What Is the direct labor time variance for April? E. What is the total direct labor variance for April?