Provide a standard cost summary providing the standard unit cost.

Question

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Answer 1

Question

Chapter 8, Problem 3E

a.

To determine

Provide a standard cost summary providing the standard unit cost.

a.

Expert Solution

Explanation of Solution

Materials—2 lb @ $8	$16
Labor—1 hr @ $10	$10
Factory overhead ($4,000 ÷ 1,000 units)	$4
Standard unit cost	$30

Figure (1)

b.

To determine

Examine the variances for materials and labor.

b.

Expert Solution

Explanation of Solution

Calculate material price variance:

Material price variance = [(Actual Price−Standard Price) × Actual Quantity]= [($8.50−$8)× 1,900]= $950U

Calculate materials quantity variance:

Materials quantity variance = [(Actual Quantity-Standard Quantity) × Standard price]= [1,900 lb−(1,000lb × 2 pounds)]× $8=$800 F

Calculate Labor rate variance:

Labor rate variance = [(Actual Price−Standard Price) × Actual Quantity]= [($10.20−$10)× 900]= $180U

Calculate labor efficiency variance:

labor efficiency variance = [(Actual Quantity−Standard Quantity) × Standard price]= [900−(1,000 × 1lb)]× $10=$1,000 F

c.

To determine

Prepare journal entries.

c.

Expert Solution

Explanation of Solution

(1)

Date	Account Title and Explanation	Debit ($)	Credit($)
	Work in Process (1,000 × 2lb × $8)	$16,000
	Materials Price Variance (1,900 × $0.50)	$950
	Materials Quantity Variance (100 × $8)		$800
	Materials (2,000 × $8.50)		$16,150
	(to record the entry for direct materials cost when the materials are issued into production)

Table (1)

(2)

Date	Account Title and Explanation	Debit ($)	Credit($)
	Work in Process (1,000 × 1 hr × $10)	$10,000
	Labor Rate Variance (900 × $.20)	$180
	Labor efficiency Variance (100 × $10)		$1,000
	Payroll (900 × $10.20)		$9,180
	(to record the entry for direct labor cost)

Table (2)

(3)

Date	Account Title and Explanation	Debit ($)	Credit($)
	Work in Process (1,000 × 1hr × $10)	$4,000
	Applied Factory overhead		$4,000
	(to record the entry applying factory overhead to work in process)

Table (3)

d.

To determine

Prepare the journal entry.

d.

Expert Solution

Explanation of Solution

Case 1 and case 2:

Date	Account Title and Explanation	Debit ($)	Credit($)
	Finished Goods (1,000 × $30)	$30,000
	Work in process		$30,000
	(to record the entry for finished goods at standard cost)

Table (4)

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Students have asked these similar questions

please solve and show full work with steps for better understanding Compute the direct materials variance, including its price and quantity variances. Note: Indicate the effect of each variance by selecting favorable, unfavorable, or no variance.

1. For direct materials: a. Compute the price and quantity variances. b. The materials were purchased from a new supplier who is anxious to enter into a long- term purchase contract. Would you recommend that the company sign the contract? Explain. 2. For labor employed in the production of Fruta: a. Compute the rate and efficiency variances. b. In the past, the 10 persons employed in the production of Fruta consisted of 4 senior workers and 6 assistants. During June, the company experimented with 5 senior workers and 5 assistants. Would you recommend that the new labor mix be continued? Explain. 3. Compute the variable overhead rate and efficiency variances. What relation can you see between this efficiency variance and the labor efficiency variance?

5) The following data relate to product no. 89 of Mansion Corporation. Direct material standard: 3 square feet at $2.50 per square foot Direct material purchased 30,000 square feet at $2.60 per square foot Direct material consumed: 29,200 square feet Manufacturing activity: 9,600 units completed Assume that the company computes variances at the earliest point in time. The direct-material quantity variance is: A) S1,040F B) S1,000U. C) S2,000F D) $1,000F. E) S1,040U.

Answer 2

Question

Chapter 8, Problem 3E

a.

To determine

Provide a standard cost summary providing the standard unit cost.

a.

Expert Solution

Explanation of Solution

Materials—2 lb @ $8	$16
Labor—1 hr @ $10	$10
Factory overhead ($4,000 ÷ 1,000 units)	$4
Standard unit cost	$30

Figure (1)

b.

To determine

Examine the variances for materials and labor.

b.

Expert Solution

Explanation of Solution

Calculate material price variance:

Material price variance = [(Actual Price−Standard Price) × Actual Quantity]= [($8.50−$8)× 1,900]= $950U

Calculate materials quantity variance:

Materials quantity variance = [(Actual Quantity-Standard Quantity) × Standard price]= [1,900 lb−(1,000lb × 2 pounds)]× $8=$800 F

Calculate Labor rate variance:

Labor rate variance = [(Actual Price−Standard Price) × Actual Quantity]= [($10.20−$10)× 900]= $180U

Calculate labor efficiency variance:

labor efficiency variance = [(Actual Quantity−Standard Quantity) × Standard price]= [900−(1,000 × 1lb)]× $10=$1,000 F

c.

To determine

Prepare journal entries.

c.

Expert Solution

Explanation of Solution

(1)

Date	Account Title and Explanation	Debit ($)	Credit($)
	Work in Process (1,000 × 2lb × $8)	$16,000
	Materials Price Variance (1,900 × $0.50)	$950
	Materials Quantity Variance (100 × $8)		$800
	Materials (2,000 × $8.50)		$16,150
	(to record the entry for direct materials cost when the materials are issued into production)

Table (1)

(2)

Date	Account Title and Explanation	Debit ($)	Credit($)
	Work in Process (1,000 × 1 hr × $10)	$10,000
	Labor Rate Variance (900 × $.20)	$180
	Labor efficiency Variance (100 × $10)		$1,000
	Payroll (900 × $10.20)		$9,180
	(to record the entry for direct labor cost)

Table (2)

(3)

Date	Account Title and Explanation	Debit ($)	Credit($)
	Work in Process (1,000 × 1hr × $10)	$4,000
	Applied Factory overhead		$4,000
	(to record the entry applying factory overhead to work in process)

Table (3)

d.

To determine

Prepare the journal entry.

d.

Expert Solution

Explanation of Solution

Case 1 and case 2:

Date	Account Title and Explanation	Debit ($)	Credit($)
	Finished Goods (1,000 × $30)	$30,000
	Work in process		$30,000
	(to record the entry for finished goods at standard cost)

Table (4)

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Answer 3

Question

Chapter 8, Problem 3E

a.

To determine

Provide a standard cost summary providing the standard unit cost.

a.

Expert Solution

Explanation of Solution

Materials—2 lb @ $8	$16
Labor—1 hr @ $10	$10
Factory overhead ($4,000 ÷ 1,000 units)	$4
Standard unit cost	$30

Figure (1)

b.

To determine

Examine the variances for materials and labor.

b.

Expert Solution

Explanation of Solution

Calculate material price variance:

Material price variance = [(Actual Price−Standard Price) × Actual Quantity]= [($8.50−$8)× 1,900]= $950U

Calculate materials quantity variance:

Materials quantity variance = [(Actual Quantity-Standard Quantity) × Standard price]= [1,900 lb−(1,000lb × 2 pounds)]× $8=$800 F

Calculate Labor rate variance:

Labor rate variance = [(Actual Price−Standard Price) × Actual Quantity]= [($10.20−$10)× 900]= $180U

Calculate labor efficiency variance:

labor efficiency variance = [(Actual Quantity−Standard Quantity) × Standard price]= [900−(1,000 × 1lb)]× $10=$1,000 F

c.

To determine

Prepare journal entries.

c.

Expert Solution

Explanation of Solution

(1)

Date	Account Title and Explanation	Debit ($)	Credit($)
	Work in Process (1,000 × 2lb × $8)	$16,000
	Materials Price Variance (1,900 × $0.50)	$950
	Materials Quantity Variance (100 × $8)		$800
	Materials (2,000 × $8.50)		$16,150
	(to record the entry for direct materials cost when the materials are issued into production)

Table (1)

(2)

Date	Account Title and Explanation	Debit ($)	Credit($)
	Work in Process (1,000 × 1 hr × $10)	$10,000
	Labor Rate Variance (900 × $.20)	$180
	Labor efficiency Variance (100 × $10)		$1,000
	Payroll (900 × $10.20)		$9,180
	(to record the entry for direct labor cost)

Table (2)

(3)

Date	Account Title and Explanation	Debit ($)	Credit($)
	Work in Process (1,000 × 1hr × $10)	$4,000
	Applied Factory overhead		$4,000
	(to record the entry applying factory overhead to work in process)

Table (3)

d.

To determine

Prepare the journal entry.

d.

Expert Solution

Explanation of Solution

Case 1 and case 2:

Date	Account Title and Explanation	Debit ($)	Credit($)
	Finished Goods (1,000 × $30)	$30,000
	Work in process		$30,000
	(to record the entry for finished goods at standard cost)

Table (4)

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Answer 4

Question

Chapter 8, Problem 3E

a.

To determine

Provide a standard cost summary providing the standard unit cost.

a.

Expert Solution

Explanation of Solution

Materials—2 lb @ $8	$16
Labor—1 hr @ $10	$10
Factory overhead ($4,000 ÷ 1,000 units)	$4
Standard unit cost	$30

Figure (1)

b.

To determine

Examine the variances for materials and labor.

b.

Expert Solution

Explanation of Solution

Calculate material price variance:

Material price variance = [(Actual Price−Standard Price) × Actual Quantity]= [($8.50−$8)× 1,900]= $950U

Calculate materials quantity variance:

Materials quantity variance = [(Actual Quantity-Standard Quantity) × Standard price]= [1,900 lb−(1,000lb × 2 pounds)]× $8=$800 F

Calculate Labor rate variance:

Labor rate variance = [(Actual Price−Standard Price) × Actual Quantity]= [($10.20−$10)× 900]= $180U

Calculate labor efficiency variance:

labor efficiency variance = [(Actual Quantity−Standard Quantity) × Standard price]= [900−(1,000 × 1lb)]× $10=$1,000 F

c.

To determine

Prepare journal entries.

c.

Expert Solution

Explanation of Solution

(1)

Date	Account Title and Explanation	Debit ($)	Credit($)
	Work in Process (1,000 × 2lb × $8)	$16,000
	Materials Price Variance (1,900 × $0.50)	$950
	Materials Quantity Variance (100 × $8)		$800
	Materials (2,000 × $8.50)		$16,150
	(to record the entry for direct materials cost when the materials are issued into production)

Table (1)

(2)

Date	Account Title and Explanation	Debit ($)	Credit($)
	Work in Process (1,000 × 1 hr × $10)	$10,000
	Labor Rate Variance (900 × $.20)	$180
	Labor efficiency Variance (100 × $10)		$1,000
	Payroll (900 × $10.20)		$9,180
	(to record the entry for direct labor cost)

Table (2)

(3)

Date	Account Title and Explanation	Debit ($)	Credit($)
	Work in Process (1,000 × 1hr × $10)	$4,000
	Applied Factory overhead		$4,000
	(to record the entry applying factory overhead to work in process)

Table (3)

d.

To determine

Prepare the journal entry.

d.

Expert Solution

Explanation of Solution

Case 1 and case 2:

Date	Account Title and Explanation	Debit ($)	Credit($)
	Finished Goods (1,000 × $30)	$30,000
	Work in process		$30,000
	(to record the entry for finished goods at standard cost)

Table (4)

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Answer 5

Chapter 8, Problem 3E

a.

To determine

Provide a standard cost summary providing the standard unit cost.

a.

Expert Solution

Explanation of Solution

Materials—2 lb @ $8	$16
Labor—1 hr @ $10	$10
Factory overhead ($4,000 ÷ 1,000 units)	$4
Standard unit cost	$30

Figure (1)

b.

To determine

Examine the variances for materials and labor.

b.

Expert Solution

Explanation of Solution

Calculate material price variance:

Material price variance = [(Actual Price−Standard Price) × Actual Quantity]= [($8.50−$8)× 1,900]= $950U

Calculate materials quantity variance:

Materials quantity variance = [(Actual Quantity-Standard Quantity) × Standard price]= [1,900 lb−(1,000lb × 2 pounds)]× $8=$800 F

Calculate Labor rate variance:

Labor rate variance = [(Actual Price−Standard Price) × Actual Quantity]= [($10.20−$10)× 900]= $180U

Calculate labor efficiency variance:

labor efficiency variance = [(Actual Quantity−Standard Quantity) × Standard price]= [900−(1,000 × 1lb)]× $10=$1,000 F

c.

To determine

Prepare journal entries.

c.

Expert Solution

Explanation of Solution

(1)

Date	Account Title and Explanation	Debit ($)	Credit($)
	Work in Process (1,000 × 2lb × $8)	$16,000
	Materials Price Variance (1,900 × $0.50)	$950
	Materials Quantity Variance (100 × $8)		$800
	Materials (2,000 × $8.50)		$16,150
	(to record the entry for direct materials cost when the materials are issued into production)

Table (1)

(2)

Date	Account Title and Explanation	Debit ($)	Credit($)
	Work in Process (1,000 × 1 hr × $10)	$10,000
	Labor Rate Variance (900 × $.20)	$180
	Labor efficiency Variance (100 × $10)		$1,000
	Payroll (900 × $10.20)		$9,180
	(to record the entry for direct labor cost)

Table (2)

(3)

Date	Account Title and Explanation	Debit ($)	Credit($)
	Work in Process (1,000 × 1hr × $10)	$4,000
	Applied Factory overhead		$4,000
	(to record the entry applying factory overhead to work in process)

Table (3)

d.

To determine

Prepare the journal entry.

d.

Expert Solution

Explanation of Solution

Case 1 and case 2:

Date	Account Title and Explanation	Debit ($)	Credit($)
	Finished Goods (1,000 × $30)	$30,000
	Work in process		$30,000
	(to record the entry for finished goods at standard cost)

Table (4)

Answer 6

Chapter 8, Problem 3E

a.

To determine

Provide a standard cost summary providing the standard unit cost.

a.

Expert Solution

Explanation of Solution

Materials—2 lb @ $8	$16
Labor—1 hr @ $10	$10
Factory overhead ($4,000 ÷ 1,000 units)	$4
Standard unit cost	$30

Figure (1)

Answer 7

Chapter 8, Problem 3E

a.

To determine

Provide a standard cost summary providing the standard unit cost.

Answer 8

a.

Expert Solution

Explanation of Solution

Materials—2 lb @ $8	$16
Labor—1 hr @ $10	$10
Factory overhead ($4,000 ÷ 1,000 units)	$4
Standard unit cost	$30

Figure (1)

Answer 9

a.

Expert Solution

Answer 10

a.

Expert Solution

Answer 11

Expert Solution

Answer 12

b.

To determine

Examine the variances for materials and labor.

b.

Expert Solution

Explanation of Solution

Calculate material price variance:

Material price variance = [(Actual Price−Standard Price) × Actual Quantity]= [($8.50−$8)× 1,900]= $950U

Calculate materials quantity variance:

Materials quantity variance = [(Actual Quantity-Standard Quantity) × Standard price]= [1,900 lb−(1,000lb × 2 pounds)]× $8=$800 F

Calculate Labor rate variance:

Labor rate variance = [(Actual Price−Standard Price) × Actual Quantity]= [($10.20−$10)× 900]= $180U

Calculate labor efficiency variance:

labor efficiency variance = [(Actual Quantity−Standard Quantity) × Standard price]= [900−(1,000 × 1lb)]× $10=$1,000 F

Answer 13

b.

To determine

Examine the variances for materials and labor.

Answer 14

b.

Expert Solution

Explanation of Solution

Calculate material price variance:

Material price variance = [(Actual Price−Standard Price) × Actual Quantity]= [($8.50−$8)× 1,900]= $950U

Calculate materials quantity variance:

Materials quantity variance = [(Actual Quantity-Standard Quantity) × Standard price]= [1,900 lb−(1,000lb × 2 pounds)]× $8=$800 F

Calculate Labor rate variance:

Labor rate variance = [(Actual Price−Standard Price) × Actual Quantity]= [($10.20−$10)× 900]= $180U

Calculate labor efficiency variance:

labor efficiency variance = [(Actual Quantity−Standard Quantity) × Standard price]= [900−(1,000 × 1lb)]× $10=$1,000 F

Answer 15

b.

Expert Solution

Answer 16

b.

Expert Solution

Answer 17

Expert Solution

Answer 18

c.

To determine

Prepare journal entries.

c.

Expert Solution

Explanation of Solution

(1)

Date	Account Title and Explanation	Debit ($)	Credit($)
	Work in Process (1,000 × 2lb × $8)	$16,000
	Materials Price Variance (1,900 × $0.50)	$950
	Materials Quantity Variance (100 × $8)		$800
	Materials (2,000 × $8.50)		$16,150
	(to record the entry for direct materials cost when the materials are issued into production)

Table (1)

(2)

Date	Account Title and Explanation	Debit ($)	Credit($)
	Work in Process (1,000 × 1 hr × $10)	$10,000
	Labor Rate Variance (900 × $.20)	$180
	Labor efficiency Variance (100 × $10)		$1,000
	Payroll (900 × $10.20)		$9,180
	(to record the entry for direct labor cost)

Table (2)

(3)

Date	Account Title and Explanation	Debit ($)	Credit($)
	Work in Process (1,000 × 1hr × $10)	$4,000
	Applied Factory overhead		$4,000
	(to record the entry applying factory overhead to work in process)

Table (3)

Answer 19

c.

To determine

Prepare journal entries.

Answer 20

c.

Expert Solution

Explanation of Solution

(1)

Date	Account Title and Explanation	Debit ($)	Credit($)
	Work in Process (1,000 × 2lb × $8)	$16,000
	Materials Price Variance (1,900 × $0.50)	$950
	Materials Quantity Variance (100 × $8)		$800
	Materials (2,000 × $8.50)		$16,150
	(to record the entry for direct materials cost when the materials are issued into production)

Table (1)

(2)

Date	Account Title and Explanation	Debit ($)	Credit($)
	Work in Process (1,000 × 1 hr × $10)	$10,000
	Labor Rate Variance (900 × $.20)	$180
	Labor efficiency Variance (100 × $10)		$1,000
	Payroll (900 × $10.20)		$9,180
	(to record the entry for direct labor cost)

Table (2)

(3)

Date	Account Title and Explanation	Debit ($)	Credit($)
	Work in Process (1,000 × 1hr × $10)	$4,000
	Applied Factory overhead		$4,000
	(to record the entry applying factory overhead to work in process)

Table (3)

Answer 21

c.

Expert Solution

Answer 22

c.

Expert Solution

Answer 23

Expert Solution

Answer 24

d.

To determine

Prepare the journal entry.

d.

Expert Solution

Explanation of Solution

Case 1 and case 2:

Date	Account Title and Explanation	Debit ($)	Credit($)
	Finished Goods (1,000 × $30)	$30,000
	Work in process		$30,000
	(to record the entry for finished goods at standard cost)

Table (4)

Answer 25

d.

To determine

Prepare the journal entry.

Answer 26

d.

Expert Solution

Explanation of Solution

Case 1 and case 2:

Date	Account Title and Explanation	Debit ($)	Credit($)
	Finished Goods (1,000 × $30)	$30,000
	Work in process		$30,000
	(to record the entry for finished goods at standard cost)