Principles of Cost Accounting
17th Edition
ISBN: 9781305087408
Author: Edward J. Vanderbeck, Maria R. Mitchell
Publisher: Cengage Learning
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Textbook Question
Chapter 8, Problem 9E
Computing labor variances
Fill in the missing figures for each of the following independent cases:
(Round all rates to the nearest cent and all totals to the nearest dollar.)
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1.What is the labor rate variance ( indicate the effect of each variance by selecting "f" for favorable, U for unfavorable, and None for no effect and round your final answer to the nearest whole number)
2. What is the variable overhead efficiency variance ? ( indicate the effect of each variance by selecting "f" for favorable, U for unfavorable, and None for no effect and round your final answer to the nearest whole number)
3. what is the variable overhead rate variance?
Which of the following equations can be used to compute a labor rate variance (where AH = actual hours; SH = standard hours allowed; AR = actual rate; SR = standard rate)?
Multiple Choice
[SH x (AR – SR)]
[AH - (AR – SR)]
[AH x (AR – SR)]
[SH - (AR – SR)]
Determine the direct materials quantity and direct labor time variances. Round your per unit computations to two decimal places and round your answers to the
nearest dollar, if required. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.
Direct materials quantity variance
Direct labor time variance
Chapter 8 Solutions
Principles of Cost Accounting
Ch. 8 - How does a standard cost accounting system work,...Ch. 8 - What is the difference between the standard cost...Ch. 8 - Prob. 3QCh. 8 - What are the specific procedures on which a...Ch. 8 - How are standards for materials and labor costs...Ch. 8 - What is a variance?Ch. 8 - How do price and quantity variances relate to...Ch. 8 - How do rate and efficiency variances relate to...Ch. 8 - Prob. 9QCh. 8 - How does a materials purchase price variance...
Ch. 8 - Prob. 11QCh. 8 - Prob. 12QCh. 8 - When a company uses a standard cost system, are...Ch. 8 - What two factors must be considered when breaking...Ch. 8 - What might cause the following materials...Ch. 8 - What might cause the following labor variances?
An...Ch. 8 - Prob. 17QCh. 8 - Prob. 18QCh. 8 - Prob. 19QCh. 8 - Prob. 20QCh. 8 - When does a flexible-budget variance occur?
Ch. 8 - Why is it important to determine flexible-budget...Ch. 8 - Prob. 23QCh. 8 - What is the significance of a production-volume...Ch. 8 - If production is more or less than the standard...Ch. 8 - At the end of the current fiscal year, the trial...Ch. 8 - What variances from the four-variance method are...Ch. 8 - What is the primary difference between the...Ch. 8 - What are the four variances in the four-variance...Ch. 8 - In all of the exercises involving variances, use F...Ch. 8 - Prob. 2ECh. 8 - Prob. 3ECh. 8 - Prob. 4ECh. 8 - Prob. 5ECh. 8 - Computing materials variances D-List Calendar Co....Ch. 8 - Computing labor variances LIFT Inc. manufactures...Ch. 8 - Standard cost summary; materials and labor cost...Ch. 8 - Computing labor variances Fill in the missing...Ch. 8 - Standard unit cost and journal entries The normal...Ch. 8 - Making journal entries Assume that during the...Ch. 8 - Using variance analysis and interpretation Last...Ch. 8 - Using variance analysis and interpretation Last...Ch. 8 - Journalizing standard costs in two departments...Ch. 8 - Calculating factory overhead The standard capacity...Ch. 8 - Determining Budgeted Overhead The overhead...Ch. 8 - Calculating factory overhead: two variances Munoz...Ch. 8 - Calculating factory overhead: two variances...Ch. 8 - The normal capacity of a manufacturing plant is...Ch. 8 - Calculating amount of factory overhead applied to...Ch. 8 - Georgia Gasket Co. budgets 8,000 direct labor...Ch. 8 - (Appendix) Calculating factory overhead: four...Ch. 8 - (Appendix) Calculating factory overhead: three...Ch. 8 - Materials and labor variances Branca Inspections...Ch. 8 - Materials and labor variances Fausto Fabricators...Ch. 8 - Zippy Inc. manufactures a fuel additive, Surge,...Ch. 8 - Calculation of materials and labor variances
Fritz...Ch. 8 - High-End Products Inc. uses a standard cost system...Ch. 8 - RDI Products Co. manufactures a variety of...Ch. 8 - The standard cost summary for the most popular...Ch. 8 - Carlo Lee Corp. has established the following...Ch. 8 - USD Inc. has established the following standard...Ch. 8 - Allocation of variances
Costa Brava Manufacturing...Ch. 8 - On May 1, Athens Inc. began the manufacture of a...Ch. 8 - The standard specifications for an electric motor...Ch. 8 - Cardiff Inc. manufactures men’s sport shirts for...Ch. 8 - Fargo Co. manufactures products in batches of 100...Ch. 8 - Prob. 15PCh. 8 - (Appendix) Overhead variances—four variance
Mobile...Ch. 8 - Shinto Corp. uses a standard cost system and...Ch. 8 - Kamen Manufacturing Co. estimates the following...Ch. 8 - Prob. 19PCh. 8 - Jillian Manufacturing Inc. manufactures a single...Ch. 8 - Cost and production data for Binghamton Beverages...
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- Acme Inc. has the following information available: A. Compute the material price and quantity, and the labor rate and efficiency variances. B. Describe the possible causes for this combination of favorable and unfavorable variances.arrow_forwardHow much of the $0.24 excess unit cost is traceable to apparent inefficient use of labor time?Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Do not round intermediate calculations. Round your final answers to 2 decimal places.arrow_forwardFor each of the following independent cases, fill in the missing amounts in the table: Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Case A B с D E T Direct Labor Rate Direct Labor Efficiency Direct Labor Spending Variance Variance Variance $ $ $ 1,350 U 1,400 F 1,600 F U U 1,250 U $ $ 5A5A5A $ $ 2,400 F U |F 1,100 U 1,700 F 1,750 U $ $ $ $ 2,300 U 3,000 F 3,700 U 2,550 U EUarrow_forward
- Trini Company set the following standard costs per unit for its single product Direct materials (30 pounds @ $4.40 per pound) Direct labor (6 hours @ $14 per hour) Variable overhead (6 hours @ $8 per hour) Fixed overhead (6 hours @ $11 per hour) $ 132.00 84.00 48.00 66.00 $ 330.00 Standard cost per unit Overhead is applied using direct labor hours. The standard overhead rate is based on a predicted activity level of 80% of the company's capacity of 50,000 units per quarter. The following additional information is available. Production (in units) Standard direct labor hours (6 DLH per unit) Budgeted overhead (flexible budget) Fixed overhead Variable overhead Operating Levels 70% 80% 90% 35,000 210,000 40,000 240,000 45,000 270,000 $ 2,640,000 $ 1,680,000 $ 2,640,000 $ 2,640,000 $ 1,920,000 $ 2,160,000 During the current quarter, the company operated at 90% of capacity and produced 45,000 units; actual direct labor totaled 266,000 hours. Units produced were assigned the following…arrow_forwardFor each of the following independent cases, fill in the missing amounts in the table: (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).arrow_forwardLooking at the excel worksheet please answers these three fallowing questions: B-1. What is the labor efficiency variance? Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). The amount of the labor efficiency variance ? U c-1. What is the variable overhead efficiency variance? Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). The amount of the variable overhead efficiency variance U c-2. What is the variable overhead rate variance? Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). The amount of the variable overhead rate variance Uarrow_forward
- 2. For labour cost in the lab: a. Compute a labour rate variance and a labour efficiency variance. (Do not round intermediate calculations. Round "Efficiency variance" answer to 2 decimal places. Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).) Labour rate variance Labour efficiency variancearrow_forwardRequired: Compute the following cost variances from the available data. (Indicate the effect of each variance by selecting "Favorable" or "Unfavorable". Select "None" and enter "0" for no effect (l.e., zero variance). Do not round Intermediate calculations.) Direct-material price variance Direct-material purchase price variance Direct-material quantity variance Direct-labor rate variance Direct-labor efficiency variance Variable-overhead spending variance Variable-overhead efficiency variance Fixed-overhead budget variance Fixed-overhead volume variance Answer is not complete. $ Unfavorable (4,200) S (4,200) Unfavorable S (2,100) Unfavorable $ (4,400) Unfavorable $ (11,200) Unfavorable 2,750 Favorable Unfavorable Unfavorable $ $ (1,260.00) $ (5,700) 00000000arrow_forwardHaliburton Mills Inc. is a large producer of men's and women's clothing. The company uses standard costs for all of its products. The standard costs and actual costs for a recent period are given below for one of the company's product lines (per unit of product): Standard Cost Actual Cost Direct materials: Standard: 2.0 metres at $4.50 per metre Actual: 2.4 metres at $4.25 per metre Direct labour: Standard: 2.4 hours at $3.50 per hour Actual: 2.0 hours at $3.85 per hour $ 9.00 $10.20 8.48 7.70 Variable manufacturing overhead: Standard: 2.4 hours at $3.00 per hour Actual: 2.0 hours at $3.65 per hour 7.20 7.30 Fixed manufacturing overhead: Standard: 2.4 hours at $3.90 per hour Actual: 2.0 hours at $3.95 per hour Total cost per unit 9.36 7.90 $33.96 $ 33.10 Actual costs: 4,580 units at $33.10 Standard costs: 4,500 units at $33.96 Difference in cost-favourable $148,950 152,820 $ 3,870 During this period, the company produced 4,500 units of product. A comparison of standard and actual costs…arrow_forward
- arker Plastic, Incorporated, manufactures plastic mats to use with rolling office chairs. Its standard cost information for last year llows: Direct materials (plastic) Direct labor Variable manufacturing overhead (based on direct labor hours) Fixed manufacturing overhead ($345,800 910,000 units) arker Plastic had the following actual results for the past year: Number of units produced and sold Number of square feet of plastic used Cost of plastic purchased and used Number of labor hours worked Direct labor cost Variable overhead cost Fixed overhead cost 1,040,000 11,400,000 $ 9,120,000 308,000 $ 3,449,600 $ 689,000 $365,000 Standard Unit C $9.96 3.15 0.66 0.38arrow_forwardThe formula to compute the direct labor rate variance is to calculate the difference between: (Choose one of the following) Actual costs + (Actual hours × Standard rate). Actual costs – Standard cost. (Actual hours × Standard rate) – Standard costs. Actual costs – (Actual hours × Standard rate).arrow_forwardc. What is spending variance for wages and salaries? Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). The amount of the spending variance for wages and salaries d. What is spending variance for total expenses? Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). The amount of the spending variance for total expensesarrow_forward
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