ACCT 2102 1st Edition Lecture 33 Outline of Last LectureI. Total DM VarianceII. Direct Labor VarianceIII. DL Variances ExampleOutline of Current Lecture:IV. Comprehension QuizCurrent Lecture: Comprehension Quiz #8 (Chapter 11)1) I Just Cleaned Up This Mess is a manufacturer of cleaning products. During the period just ended, $62,400 in direct materials purchased were used in production. The direct material price variance for the period was $4,800 unfavorable; the total direct material variance was $14,400 unfavorable. The cost of direct material was expected to be $6 per pound. 3,800 actual direct laborhours were logged during production. The direct labor cost was expected to be $16 per unit of product. Additional information related to direct labor is as follows:Standard direct labor rate $8 per direct labor hourDirect labor efficiency variance $1,600 favorableTotal direct labor variance $680 unfavorablea) Total number of units produced during the period was ____.b) The standard quantity of material allowed to produce one unit of product was ____ pounds per unit.c) The actual direct labor rate was _____ per hour.DM price = qty purchased (actual – std)DM price = (qty purch x actual) – (qty purch x std)4,800 = 62,400 – (qty purch x $6)qty purch = 9,600 lbsDM qty = std (qty used – qty allowed)9,600 = $6 (9,600 – qty allowed)qty allowed = 8,000 lbsDM total = DM price + DM qty14,400 = 4,800 + DM qtyDM qty = 9,600These notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.DL rate = hrs logged (actual – std)2,280 = 3,800 (actual - $8)actual = $8.60/DL hrDL eff = std (hrs logged – hrs allowed)-1,600 = $8 [3,800 – 2(output)]output = 2,000 units DL total = DL rate + DL eff680 = -1,600 + DL rateDL rate = 2,280a) Total number of units produced during the period was 2,000.b) The standard quantity of material allowed to produce one unit of product was 4 pounds per unit.c) The actual direct labor rate was $8.60 per hour.2) Part of your company’s accounting database was destroyed when Godzilla attacked the city. Through careful recreation of data, you have been able to determine that during the previous period, 20,000 units of product were produced. Raw Materials Inventory increased by 2,000 ounces during the period. Reports show that the direct material price variance was a favorable $120,000 for the period and direct material variances was a favorable $40,000. The actual price paid for direct material during the period was $14 per pound, which was $3 less per pound than expected. The quantity allowed per unit of output was ____ ounces.Std price = $17 ($14 + $3)Actual = $14DM price = qty purch (act – std) *qty used = 40,000 – 2,000 = 38,000<120,000> = qty purch (14 – 17) DM qty = std (qty used – qty allowed)qty purch = 40,000 DM qty = 17 [38,000 – 20,000 (output)]*If it says RM Inv decreased, then: qty used = 40,000 + 2,000 = 42,000Total DM variance = (qty used x actual) – (qty allowed x std)<40,000> = (38,000 x 14) – (qty allowed x 17)qty allowed = 33,647qty allowed = 20,000 x output33,647 = 20,000 x outputoutput = 1.68The quantity allowed per unit of output was 1.68 ounces.3) Are You Playing to Win?, LLC, a manufacturer of motivational wall art uses standard costing for the single product the company makes and sells. The following data are for the month of October:Standard cost per DL hour $8Actual DL hours logged 3,800Labor efficiency variance $1,600 FDL input ratio 2 hours per unitTotal labor variance $680 UThe total number of units produced during October was _____.DL total = DL rate + DL eff680 = DL rate + -1,600DL rate = 2,280DL rate = hrs logged (act – std) DL eff = std (hrs logged – hrs allowed)2,280 = 3,800 (act – 8) -1,600 = 8 [3,800 – 2(output)]actual = $8.60 output = 2,000 unitsThe total number of units produced during October was
View Full Document
Unlocking...