Chapters 10 & 11 Demonstration Problems Page 1 Please send comments and corrections to me at [email protected] Demo 10/11-1 The following actual and standard cost data for Direct Materials and Direct Labor relate to the production of 2,000 units of a product: Actual Costs Standard Costs Direct Materials: 4,200 lbs. @ $4.90 4,000 lbs. @ $5.20 Direct Labor : 5,700 hrs. @ $9.30 6,000 hrs. @ $9.50 Determine the following variances: a. Material Price Variance. b. Material Usage Variance. c. Labor Rate Variance. d. Labor Efficiency Variance. Demo 10/11-2 Marshfield Company considers 8,000 direct labor hours or 4,000 units of product its normal monthly capacity. Its standard Variable and Fixed Manufacturing Overhead rates are $4 and $7, respectively, per Direct Labor hour. During the current month, $31,500 of Variable Manufacturing Overhead cost and $51,600 Fixed Manufacturing Overhead cost were incurred in working 7,500 Direct Labor hours to produce 3,600 units of product. The Fixed Manufacturing Overhead budget was $56,000. Determine the following variances, and indicate whether each is favorable or unfavorable: a. Variable Overhead Spending Variance. b. Variable Overhead Efficiency Variance. c. Fixed Overhead Budget Variance. d. Fixed Overhead Volume Variance.Chapters 10 & 11 Demonstration Problems Page 2 Please send comments and corrections to me at [email protected] Demo 10/11-3 The following summary data relate to the operations of Dobson Company for April, during which 9,000 finished units were produced. Normal monthly capacity was 20,000 Direct Labor hours and the Fixed Manufacturing Overhead budget for April was $50,000. Std. Unit Costs Actual Total Costs Direct Materials: Standard (4 lbs. @ $2.20/lb.) $8.80 Actual (38,000 lbs. @ $2.00/lb.) $76,000 Direct Labor:: Standard (2 hrs. @ $11.00/hr.) 22.00 Actual (18,500 hrs. @ $11.30/hr.) 209,050 Variable Manufacturing Overhead: Standard (2 hrs. @ $3.00/hr.) 6.00 Actual 54,900 Fixed Manufacturing Overhead: Standard (2 hrs. @ $2.50/hr.) 5.00 Actual _______ 52,000 Total $41.80 $391,000 Determine the following variances and indicate whether each is favorable or unfavorable: a. Material Price and Usage Variances. b. Labor Rate and Efficiency Variances. c. Variable Overhead Spending and Efficiency Variances. d. Fixed Overhead Budget and Volume Variances.Chapters 10 & 11 Demonstration Problems Page 3 Please send comments and corrections to me at [email protected] Demo 10/11-4 The following summary data relate to the operations of Randolph Company for July, during which 4,500 finished units are produced: Std. Unit Costs Actual Total Costs Direct Materials: Standard (0.6 lb. @ $9.00/lb.) $ 5.40 Actual (3,000 lbs. @ $9.40/lb.) $ 28,200 Direct Labor:: Standard (0.8 hr. @ $12.80/hr.) 10.24 Actual (3,800 hrs. @ $12.50/hr.) 47,500 Variable Manufacturing Overhead: Standard (0.8 hr. @ $ 7.50/hr.) 6.00 Actual 30,100 Fixed Manufacturing Overhead*: Standard (0.8 hr. @ $22.50/hr.) 18.00 Actual _______ 88,700 Total $39.64 $194,500 * Fixed overhead budget is $90,000 at normal monthly capacity of 4,000 direct labor hours. Determine the following variances and indicate whether each is favorable or unfavorable: a. Material Price and Usage Variances. b. Labor Rate and Efficiency Variances. c. Variable Overhead Spending and Efficiency Variances. d. Fixed Overhead Budget and Volume Variances.Chapters 10 & 11 Demonstration Problems Page 4 Please send comments and corrections to me at [email protected] Demo 10/11-5 The following summary data relate to the operations of Brown Company for May, during which 2,000 finished units were produced. Normal monthly capacity was 1,100 Direct Labor hours and the Fixed Manufacturing Overhead budget for April was $6,600. Std. Unit Costs Actual Total Costs Direct Materials: Standard (3 lbs. @ $2.00/lb.) $6.00 Actual (6,400 lbs. @ $2.20/lb.) $14,080 Direct Labor:: Standard (.5 hrs. @ $14.00/hr.) 7.00 Actual (950 hrs. @ $13.70/hr.) 13,015 Variable Manufacturing Overhead: Standard (.5 hrs. @ $4.00/hr.) 2.00 Actual 4,300 Fixed Manufacturing Overhead: Standard (.5 hrs. @ $6.00/hr.) 3.00 Actual ______ 6,820 Total $18.00 $38,215 Determine the following variances and indicate whether each is favorable or unfavorable: a. Material Price and Usage Variances. b. Labor Rate and Efficiency Variances. c. Variable Overhead Spending and Efficiency Variances. d. Fixed Overhead Budget and Volume
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