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    Standard Costing Quiz 2

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    Shafni Dulnuan
    The document contains two accounting problems related to standard costing. Problem 1 involves variances for material, labor, and variable overhead for a company that produced 2,000 units. It calculates price, quantity, spending, rate, and efficiency variances. Problem 2 does the same for a company that produced 2,100 units, calculating material, labor, and variable overhead variances.

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    Standard Costing Quiz 2

    Uploaded by

    Shafni Dulnuan
    19 views2 pages
    The document contains two accounting problems related to standard costing. Problem 1 involves variances for material, labor, and variable overhead for a company that produced 2,000 units. It calculates price, quantity, spending, rate, and efficiency variances. Problem 2 does the same for a company that produced 2,100 units, calculating material, labor, and variable overhead variances.

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    The document contains two accounting problems related to standard costing. Problem 1 involves variances for material, labor, and variable overhead for a company that produced 2,000 units. It calculates price, quantity, spending, rate, and efficiency variances. Problem 2 does the same for a company that produced 2,100 units, calculating material, labor, and variable overhead variances.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    19 views2 pages

    Standard Costing Quiz 2

    Uploaded by

    Shafni Dulnuan
    The document contains two accounting problems related to standard costing. Problem 1 involves variances for material, labor, and variable overhead for a company that produced 2,000 units. It calculates price, quantity, spending, rate, and efficiency variances. Problem 2 does the same for a company that produced 2,100 units, calculating material, labor, and variable overhead variances.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    Easter College

    Department of Business Management


    Easter Road, Guisad, Baguio City

    PROBLEM 1

    Shasha company produces single product. Variable manufacturing overhead is applied to products on
    the basis of direct labor hours. The standard costs for one unit of product are as follows:

    Direct materials: 6 ounces at $ 0.50 per ounce………………………………. $ 3.00

    Direct labor: 0.6 hours at $ 30 per hour………………………………………….$ 18.00

    Variable manufacturing overhead: 0.6 hours at $ 10.00 per hour……$ 6.00

    Total standard variable cost per unit……………………………………………….$ 27.00

    During June, 2000 units were produced. The costs associated with June’s operations were as follows:
    The standard materials in units is 12,000 ounces. The standard direct labors hours is 1,200.

    Material Purchased: 18,000 ounces at $ 0.60 per ounce……………………$ 10,800

    Material used in production: 18,000 ounces at $ 0.60 per ounce…….$ 10,800

    Direct labor: 1,100 hours at $ 30.50 per hour…………………………………..$ 33,550

    Variable manufacturing overhead costs incurred……………………………..$ 12,980

    REQUIRED:

    1. What is the material price variance?


    (AQ x AP)-(AQ x SP)
    =(18,000 x 0.60)-(18,000 x 0.50)
    =10,800-9000
    =1,800 U
    2. What is the material quantity variance?
    (AQ x SP)-(SQ x SP)
    =(18,000 x 0.50)-(12,000 x 0.50)
    =9,000-6,000
    =3,000 U

    3. What is the material spending variance?


    =1,800 U + 3,000 U
    =4, 800 U
    4. What is the labor rate variance?
    (AH x AR)-(AH x SR)
    =(1,100 x 30.50) – (1,100 x 30)
    =33,550-33,00
    =550 U
    5. What is the labor efficiency variance?
    (AH x SR)-(SH x SR)
    =(1,100 x 30)-(1,200 x 30)
    =33,000-36,000
    =3,000 F
    6. What is the labor spending variance?
    =550 U + 3,000 F
    =2,450 F

    7. What is the variable manufacturing overhead rate variance?


    (AH x AR)-(AH x SR)
    =12,980-(1,100 x 10)
    =12,980-11,000
    =1,980 U
    8. What is the variable manufacturing overhead efficiency variance?
    (AH x SR)-(SH x SR)
    =(1,100 x 10)-(1,200 x 10)
    =11,000-12,000

    Management Accounting
    Dulnuan,S.G
    Easter College
    Department of Business Management
    Easter Road, Guisad, Baguio City

    =1,000 F
    9. What is the variable manufacturing overhead spending variance?
    =1,980 U + 1,000 F
    =980 U
    10. What is the TOTAL spending variance? (tip: pertains to net sum of material, labor and variable
    manufacturing overhead variances)
    =4,800 U + 2,450 F + 980 U
    =3,330 U

    PROBLEM 2

    Inputs Standard Quantity Standard Price

    Direct Materials…………………………………….3.0 pounds $ 4.00 per pound

    Direct Labor ………………………………………….0.50 hours $ 22.00 per hour

    Variable Manufacturing Overhead…………0.50 hours $ 6 per hour

    The standard direct labor hours is 1,050.

    Actual Results:

    Actual production………..2,100 units

    Actual Variable manufacturing overhead cost…. $ 5,100---------- $ 5 per hour

    Actual Quantity Actual Price

    Actual Direct materials costs…………………..6,350 pounds $ 4.10 per pound

    Actual Direct labor cost…………………………..1,020 hours $ 22.10 per hour

    REQUIRED:

    1. What is the materials quantity variance?


    =6350 x 4-3x 2,100 x4
    =25,400-25,200
    =200 U
    2. What is the materials price variance?
    =6,350 x 4.10-6350 x 4
    =26,035-25,400
    =635 U
    3. What is the labor efficiency variance?
    =1,020 x 22.10 – 1,020 x 22
    =22,542- 22,440
    =102 U
    4. What is the labor rate variance?
    =1,020 x 22 – 1,050 x 22
    =22,440- 23,100
    = 660 F
    ***2,100 x 0.50 hrs = 1,050
    5. What is the variable overhead efficiency variance?
    =5,100-(1,050 x 6)
    =5,100-6,300
    =1,200 F

    Management Accounting
    Dulnuan,S.G

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