Name:

Course/Section:

Chapter 5

TRUE/FALSE

1. TRUE
2. TRUE
3. FALSE
4. FALSE
5. TRUE
6. FALSE
7. TRUE
8. TRUE
9. FALSE
10. FALSE
11. TRUE
12. TRUE
13. FALSE
14. TRUE
15. TRUE

COMPLETION

1. Total variance
2. Variable overhead efficiency variance
3. Mix
4. Practical standard
5. Price variance

PROBLEM 1

1. Answer: Material Price Variance 10,000 (favorable)

Material Quantity Variance 16,575 (unfavorable)

Solution:

2. Answer: labor rate variance 18,360(favorable)

Labor efficiency variance 43,350 (favorable)

Solution:

PROBLEM 2:

1. Answer: Budget Variance: 240

Volume Variance: 190
Solution:

2. Answer: Variable Spending Variance: 275

Variable efficiency variance: 75
FOH Spending Variance: 590
Volume Variance: 190

Solution:

3. Answer: Spending Variance: 315

Efficiency Variance: 75
Volume Variance: 190

Solution:

PROBLEM 3

a) Answer: 6,000

Solution:
Actual material cost 314,000
pieces at standard cost 320,000
Material purchase 6,000

b) Answer: 78,000

Solution:
3,900 units x 2o pieces per unit= 78,000 standard quantity allowed

c) Answer: 312,000

Solution:
Total standard cost of material (78,000 x 4) = 312,000

d) Answer: 79,600

Solution:
standard cost of actual material used 312,000 + 6,400 quantity variance = 318,400
318, 400/4 = 79, 600 actual pieces used

e) Answer: 4, 720

Solution:
Actual labor cost 40,120
(5,900 x 6) (35,400)
Labor rate variance 4, 720
f) Answer: 5,850

Solution: 3,900
X 1.5
5,850

g) Answer: 35,100

Solution: 5,850
X 6
35,100

h) Answer: 300

Solution:

Actual hours x standard rate 35,400

Standard cost of labor allowed (35,100)

Labor efficiency variance 300

i) Answer: 47,300

Solution:
(18,900 x 2.50) 47,250
50
Actual VOH 47,300

j) Answer: 18,720

Solution:
3,900 units
X 4.8 standard hours
18,720 MH allowed

k) Answer:450

Solution:

(18,720 x 2.50) 46,800

(18, 900 x 2.50) (47,250)

450
l) Answer: 19,000
X 3
57,000 bud. Fixed OH
m) Answer: 56,160

Solution:
3,900
X 4.8
18,720
X 3
56,160 applied fixed OH

n) Answer: 3,000

Solution:
Actual fixed OH 60,000
Budgeted fixed OH (57,000)
Fixed OH spending variance 3,000

o) Answer: 840

Solution:
Bud. Fixed OH 57,000
Applied fixed OH (57,160)
Volume variance 840

p) Answer: 4, 340

Solution:
Total actual OH (60,000 + 47,300) 107,300
Total Applied fixed OH (18,720 x 5.50) (102,960)
Total overhead variance 4,340
 Chapter 6

TRUE OR FALSE

1. FALSE
2. TRUE
3. TRUE
4. FALSE
5. TRUE
6. FALSE
7. TRUE
8. FALSE
9. TRUE
10. TRUE

COMPLETION

1. Operating budget
2. Financial budget
3. Pro-forma, financial statement
4. Production budget
5. DM, DL, overhead

PROBLEM 1

Answer: 366,00

Solution:

PROBLEM 2

Answer: total cash receipt 85,500

Total cash disbursement