Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN: 9781305970663
Author: Don R. Hansen, Maryanne M. Mowen
Publisher: Cengage Learning
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Chapter 9, Problem 19E
Delano Company uses two types of direct labor for the manufacturing of its products: fabricating and assembly. Delano has developed the following standard mix for direct labor, where output is measured in number of circuit boards.
During the second week in April, Delano produced the following results:
Required:
- 1. Calculate the yield ratio.
- 2. Calculate the
standard cost per unit of the yield. - 3. Calculate the direct labor yield variance.
- 4. Calculate the direct labor mix variance.
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Gorman Company produced 13,000 book bags in June, and actual amounts were as follows:
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Gorman's standards were as follows:
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Requirement 1. Compute cost and efficiency variances for direct materials, direct labor, and variable overhead.
Requirements
1.
2.
Compute cost and efficiency variances for direct materials, direct labor, and variable overhead.
Compute the cost and volume variances for fixed overhead.
Select the formulas to calculate direct materials cost and efficiency variances, then enter the variance amounts and the total. (Abbreviations used: AC = actual cost; AQ = actual quantity; FOH = fixed overhead; SC = standard cost; SQ = standard quantity. Label ea
avorable (F) or unfavorable (U). Enter a "0" for any zero balances. For any $0 variances, leave the Favorable (F)/Unfavorable (U) input blank.)
Direct materials cost variance
Direct materials efficiency variance
=
Data table
Formula
Total…
Huron Company produces a cleaning compound known as Zoom. The direct materials and direct labor standards for one unit of Zoom
are given below:
Direct materials
Direct labor
1. Materials price variance
1. Materials quantity variance
Standard Quantity
or Hours
7.80 pounds
0.30 hours
2. Labor rate variance
2. Labor efficiency variance
Standard Price or Rate
$ 2.50 per pound
$ 6.00 per hour
Standard
Cost
During the most recent month, the following activity was recorded:
a. 9,300.00 pounds of material were purchased at a cost of $2.20 per pound.
b. All of the material purchased was used to produce 1,000 units of Zoom.
c. 200 hours of direct labor time were recorded at a total labor cost of $1,400.
Required:
1. Compute the materials price and quantity variances for the month.
2. Compute the labor rate and efficiency variances for the month.
Note: For all requirements, Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None"
for no effect (i.e.,…
Luma Incorporated has provided the following data concerning one of the products in its standard cost system.
Inputs
Direct materials
Standard Quantity or Hours per
Unit of Output
4.8 ounces
Standard Price or Rate
$6.90 per ounce
The company has reported the following actual results for the product for September:
Actual output
Raw materials purchased
Actual price of raw materials
Actual cost of raw materials purchased
Raw materials used in production
The raw materials price variance for the month is closest to: (Round your intermediate calculations to 2 decimal places.)
2,100 units
10,500 ounces
$ 7.80 per ounce
$ 81,900
10,090 ounces
Chapter 9 Solutions
Cornerstones of Cost Management (Cornerstones Series)
Ch. 9 - Discuss the difference between budgets and...Ch. 9 - What is the quantity decision? The pricing...Ch. 9 - Why is historical experience often a poor basis...Ch. 9 - Prob. 4DQCh. 9 - How does standard costing improve the control...Ch. 9 - The budget variance for variable production costs...Ch. 9 - Explain why the direct materials price variance is...Ch. 9 - The direct materials usage variance is always the...Ch. 9 - The direct labor rate variance is never...Ch. 9 - Prob. 10DQ
Ch. 9 - Prob. 11DQCh. 9 - What is the cause of an unfavorable volume...Ch. 9 - Prob. 13DQCh. 9 - Explain how the two-, three-, and four-variance...Ch. 9 - Prob. 15DQCh. 9 - Prob. 1CECh. 9 - Direct Materials Usage Variance Refer to...Ch. 9 - Refer to Cornerstone Exercise 9.1. Guillermos Oil...Ch. 9 - Kavallia Company set a standard cost for one item...Ch. 9 - Yohan Company has the following balances in its...Ch. 9 - Standish Company manufactures consumer products...Ch. 9 - Variances Refer to Cornerstone Exercise 9.6....Ch. 9 - Standish Company manufactures consumer products...Ch. 9 - Mangia Pizza Company makes frozen pizzas that are...Ch. 9 - Mangia Pizza Company makes frozen pizzas that are...Ch. 9 - Refer to Cornerstone Exercise 9.9. Required: 1....Ch. 9 - Quincy Farms is a producer of items made from farm...Ch. 9 - During the year, Dorner Company produced 280,000...Ch. 9 - Zoller Company produces a dark chocolate candy...Ch. 9 - Oerstman, Inc., uses a standard costing system and...Ch. 9 - Refer to the data in Exercise 9.15. Required: 1....Ch. 9 - Chypre, Inc., produces a cologne mist using a...Ch. 9 - Refer to Exercise 9.17. Chypre, Inc., purchased...Ch. 9 - Delano Company uses two types of direct labor for...Ch. 9 - Jameson Company produces paper towels. The company...Ch. 9 - Madison Company uses the following rule to...Ch. 9 - Laughlin, Inc., uses a standard costing system....Ch. 9 - Responsibility for the materials price variance...Ch. 9 - Which of the following is true concerning labor...Ch. 9 - A company uses a standard costing system. At the...Ch. 9 - Relevant information for direct labor is as...Ch. 9 - Which of the following is the most likely...Ch. 9 - Haversham Corporation produces dress shirts. The...Ch. 9 - Plimpton Company produces countertop ovens....Ch. 9 - Algers Company produces dry fertilizer. At the...Ch. 9 - Misterio Company uses a standard costing system....Ch. 9 - Petrillo Company produces engine parts for large...Ch. 9 - Business Specialty, Inc., manufactures two...Ch. 9 - Vet-Pro, Inc., produces a veterinary grade...Ch. 9 - Refer to the data in Problem 9.34. Vet-Pro, Inc.,...Ch. 9 - Energy Products Company produces a gasoline...Ch. 9 - Nuevo Company produces a single product. Nuevo...Ch. 9 - Ingles Company manufactures external hard drives....Ch. 9 - As part of its cost control program, Tracer...Ch. 9 - Aspen Medical Laboratory performs comprehensive...Ch. 9 - Leather Works is a family-owned maker of leather...
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What is variance analysis?; Author: Corporate finance institute;https://www.youtube.com/watch?v=SMTa1lZu7Qw;License: Standard YouTube License, CC-BY