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Chapter 12
Chapter 12
REVIEW 12-14
(a)
TLV = (AH AR) (SHA SR)
TLV = (4,100 $14.40) ((2,000 2) $14.00) = $59,040 $56,000 = $3,040 U
Labour Price Variance
Direct Labour
(hours)
Actual
Hours
4,100
$59,040
Actual
Rate
$14.40
Actual
Hours
4,100
Standard
Rate
$14.00
$57,400
$1,640 U
Labour Quantity Variance
Direct Labour
(hours)
Standard
Actual
Quantity
Price
4,100
$14.00
$57,400
Standard Standard
Quantity
Price
4,000
$14.00
$56,000
$1,400 U
(b)
Total overhead variance = $81,300 $84,000* = $2,700 Favourable
*4,000 hours X $21.00
EXERCISE 12-28
(a) (1)
Total actual overhead cost
Overhead
Budgeted
Overhead
Budget
Variance
= ($16,000 + $11,500) +
$1,500
= $29,000
(2) Actual variable overhead cost= Actual Overhead Fixed Overhead
= $29,000 $12,000
= $17,000
(3) Variable overhead cost
applied
Normal
Fixed
Overhead X Capacity
Hours
Rate
$5
(2,300*
Standard
Hours
Allowed
2,000)
= $1,500 U
*$11,500 $5 per hour = 2,300 hours
(b)
PROBLEM 12-40A
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
Note: This question might be less challenging if you use the matrix as
show on the next page. Start by filling in all the numbers you know, and
then break each one into its components using the information from the
standard cost card. This works well for materials and labour, but is less
effective for overhead variances.
(2)
(3)
Actual Quantity
Actual Price
138,000 $2.95 =
$407,100
Actual Quantity
Standard Price
138,000 $3 = $414,000
Standard Quantity
Standard Price
22,500 6 $3 =
$405,000
Price Variance
(1) (2)
$6,900 F
Quantity Variance
(2) (3)
$9,000 U
Total Variance
(1) (3)
$2,100 U
(2)
(3)
Actual Hours
Actual Rate
19,400 $5.25 = $101,850
Actual Hours
Standard Rate
19,400 $5 = $97,000
Standard Hours
Standard Rate
22,500 0.8 $5 =
$90,000
Price Variance
(1) (2)
$4,850 U
Quantity Variance
(2) (3)
$7,000 U
Total Variance
(1) (3)
$11,850 U
PROBLEM 12-41A
(a) See below for the solution using formulas.
Material Variances
Price Variance
Quantity Variance
(AQ AP)
(AQ SP)
(SQA SP)
20,500 $4.90
20,500 $5.00
19,600 $5.00
$100,450
$102,500
$98,000
$2,050 F
$4,500 U
$2,450 U
Total Material Variance
Labour Variances
Price Variance
Quantity Variance
(AH AR)
(AH SR)
(SHA SR)
19,600 $12.20
19,600 $12.00
19,600 $12.00
$239,120
$235,200
$235,200
$3,920 U
$0
$3,920 U
Total Labour Variance
Actual per unit materials cost: $100,450 20,500 kg = $4.90/kg (AP)
Standard quantity of materials: 9,800 units 2 kg = 19,600 kg (SQ)
Actual per unit direct labour cost: $239,120 19,600 = $12.20 (AR)
Standard quantity of labour: 9,800 2 hours = 19,600 hours (SH)
$2,450 U
$3,920 U
$3,920 U
PROBLEM 12-45A
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
PROBLEM 12-48A
(c)
(d)
PROBLEM 12-54B
$0.61
4
5
$9,150
$9,760
$610 F
Labour Variances
Price Variance
Quantity Variance
(AH AR)
(AH SR)
(SHA SR)
7,3001
2
7,5007 $4.80
7,500 $5.00
$5.00
8
$36,000
$37,500
$36,50011
$1,500 F9
$1,000 U10
$500 F
Total Labour Variance
$0.95
7,300
$0.95
$8,00017
$7,12514
$6,93513
$875 U16
$190 U15
$1,065 U
Total Variable Overhead Variance
Fixed Overhead Variances
Budget Variance
Volume Variance
Actual
Static budget
(SHA PDOHR)
10,000
$0.60
7,300
$0.60
22
19
18
$6,429
$6,000
$4,380
$429 U21
$1,620 U20
$2,049 U
Total Fixed Overhead Variance
Calculations:
Direct materials price variance (given)
Direct materials quantity variance (given)
Direct labour price variance:
7
$36,000 $4.80 = 7,500 hours
9
7,500 ($4.80 $5.00) =
Direct labour quantity variance:
Total variance price variance =
10
$500F $1,500F =
PROBLEM 12-54B (Continued)
$200 F
$610 F
$1,500 F
$1,000 U
$190 U
15
16
$875 U
Total variable overhead variance is represented by over- or underapplied overhead. Spending variance = under-applied overhead
variable overhead efficiency variance, or $1,065U $190U.
Fixed overhead volume variance:
Overhead rate = $1.55 $0.95 = $0.60
Actual quantity of hours = 7,500
Standard number of hours = 7,500 200
Normal capacity = 10,000
20
$0.60 (10,000 7,300) =
Fixed overhead budget variance:
21
($2,256 U $1,065 U) $1,620 U =
Total fixed overhead variance:
($1,620 U $492 F) =
$1,620 U
$429 F
$1,191 U