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KTQT2 Chapter 10
KTQT2 Chapter 10
KTQT2 Chapter 10
$28,500
1,400 units
6,000 pounds Cost $16,500
($300) F
-$1,500 F
$2.75
$3.00
s production.
$1,200 U
5,600 pounds
4 pounds
3,500 hours
-$4,500 F
3,000 hours
$10 per hour
$1,500 U
Standard Quantity or Hours
Direct materials ?
Direct labor ?
Variable manufacturing overhead ?
Total standard cost per kit
Materials Used
Total standard cost*. ?
Actual costs incurred $10,000
Materials price variance ?
Materials quantity variance $600 U
Labor rate variance
Labor efficiency variance
Variable overhead rate variance
Variable overhead efficiency variance
*For the month’s production.
1. What was the total standard cost of the materials used during August?
Total standard cost for kits $21,000
Total standard cost of the materials used $11,400
2. How many yards of material are required at standard per kit?
Standard cost per kit $22.8
Yards per kits 3.8
3. What was the materials price variance for August if there were no beginning or ending inventories of materials?
Actual cost of material used $10,000
Standard cost of material used $11,400
Total variance -$1,400 F
Materials price variances -$2,000 F
4. What is the standard direct labor rate per hour?
Standard manufacturing variable overhead cost $1,600
Standard manufacturing variable overhead rate per direct labor- $2
Standard direct labor-hours for the month 800
Standard direct labor rate per hour $10
5. What was the labor rate variance for August? The labor efficiency variance?
Actual cost per kit produced $42.14
Total actual cost of production $21,070
Actual cost of direct labor $9,450
Labor rate variance $450 U
Labor efficiency variance $1,000 U
6. What was the variable overhead rate variance for August? The variable overhead efficiency variance?
Variable manufacturing overhead rate variance -$180 F
Variable overhead efficiency variance $200 U
7. Complete the standard cost card for one kit shown at the beginning of the problem
Standard Quantity or Hours
Direct materials 3.8 yards
Direct labor 1.6 hours
Variable manufacturing overhead 1.6 hours
Total standard cost per kit
Standard Price or Rate Standard Cost
$6 per yard $?
? ?
$2 per direct labor-hour?
$42
?
?
?
?
ad efficiency variance?
Standard Price or Rate Standard Cost
$6 per yard $22.80
$10 per hour $16
$2 per direct labor-hour $3.20
$42
Kits were manufactured and sold 500
Actual direct labor-hours 900
Difference between standard and actual cost per kit produced during A $0.14 U
Standard costs
Total Per Unit of Product
Direct materials $35,490 $18.20
Direct labor $7,020 3.60
Variable manufacturing overhead (based on direct labor-hours) $2,340 1.20
$23.00
Actual costs
Total Per Unit of Product
Direct materials (6,000 yards) $36,000 $18.00
Direct labor $7,600 3.80
Variable manufacturing overhead $3,800 1.90
$23.70
Sintering Finishing
Standard labor rate $20.00 $19.00 per hour
Actual direct labor-hours 1,200 2,850
Total labor cost $27,000 $59,850
Required:
1. Prepare a standard cost card for each product, showing the standard cost of direct materials and direct labor.
Standard quantity or hours Standard price or rate
Alpha8
Direct materials - X342 1.80 kilos $3.50
Direct materials - Y561 2.00 liters $1.40
Direct labor - Sintering 0.20 hours $20.00
Direct labor - Finishing 0.8 hours $19.00
Total
Zeta9
Direct materials - X342 3.00 kilos $3.50
Direct materials - Y561 4.50 liters $1.40
Direct labor - Sintering 0.35 hours $20.00
Direct labor - Finishing 0.9 hours $19.00
Total
2. Compute the materials quantity and price variances for each material.
Direct Materials Variances - Materials X342
Actual price $3.70
Actual quantity 14,000
Materials price variances = (AQ x AP) - (AQ x SP) $2,800 U
Standard quantity 8,700
Actual quantity 8,500
Materials quantity variances = (AQ x SP) - (SQ x SP) -$700 F
Direct Materials Variances - Materials Y561
Actual price $1.30
Actual quantity 15,000
Materials price variances = (AQ x AP) - (AQ x SP) -$1,500 F
Standard quantity 12,000
Actual quantity 13,000
Materials quantity variances = (AQ x SP) - (SQ x SP) $1,400 U
3. Compute the direct labor efficiency and rate variances for each operation.
Direct Labor Variances - Sintering
Standard hours 11.00
Labor efficiency variance = (AH × SR) − (SH × SR) $23,780 U
Actual direct labor rate $22.50
Labor rate variance = (AH × AR) − (AH × SR) $3,000 U
Direct Labor Variances - Finishing
Standard hours 32.30
Labor efficiency variance = (AH × SR) − (SH × SR) $53,536 U
Actual direct labor rate $21.00
Labor rate variance = (AH × AR) − (AH × SR) $5,700 U
al Standard Labor Time
Y561 Sintering Finishing
liters 0.20 hours 0.8 hours
liters 0.35 hours 0.9 hours
Alpha8s Zeta9s
Actual units 1,500 2,000