管理会计chapter 8答案

Practice and Quiz Eight

1．Standards that do not allow for machine breakdowns or other work interruptions and that require peak efficiency at all times are known as:

A) budgeted standards.B) ideal standards.C) normal standards.D) practical standards.

2. The "standard quantity allowed" is computed by multiplying the:

A) actual input in units by the standard output allowed.

B) actual output in units by the standard input allowed.

C) actual output in units by the standard output allowed.

D) standard output in units by the standard input allowed.

3. Marseille Company, a clothing manufacturer, uses a standard costing system. Each unit of a finished product contains 2 yards of cloth. However, there is unavoidable waste of 25%, calculated on input quantities, when the cloth is cut for assembly. The cost of the cloth is $6 per yard. The standard direct material cost for cloth per unit of finished product is:

A) $9.60.B) $12.00.C) $14.00.D) $15.00.

4. Lotus Company employs a standard cost system in which direct materials inventory is carried at standard cost. Lotus has established the following standards for the prime costs of one unit of

During June, Lotus purchased 330,000 pounds of direct material at a total cost of $2,343,000. The total factory wages for June were $1,600,000, 90 percent of which were for direct labor. Lotus manufactured 25,000 units of product during June using 302,000 pounds of direct material and 64,000 direct labor hours. The price variance for the direct material acquired by the company during June is:

A) $30,200 favorable.B) $30,200 unfavorable.C) $33,000 favorable.D) $33,000 unfavorable.

5. Lotus Company employs a standard cost system in which direct materials inventory is carried at standard cost. Lotus has established the following standards for the prime costs of one unit of

During June, Lotus purchased 330,000 pounds of direct material at a total cost of $2,343,000. The total factory wages for June were $1,600,000, 90 percent of which were for direct labor. Lotus manufactured 25,000 units of product during June using 302,000 pounds of direct material and 64,000 direct labor hours. The direct material quantity variance for June is:

A) $14,000 favorable.B) $14,000 unfavorable.C) $14,200 favorable.D) $14,200 unfavorable.

6. Lotus Company employs a standard cost system in which direct materials inventory is carried at standard cost. Lotus has established the following standards for the prime costs of one unit of product:

total factory wages for June were $1,600,000, 90 percent of which were for direct labor. Lotus manufactured 25,000 units of product during June using 302,000 pounds of direct material and 64,000 direct labor hours. The direct labor rate variance for June is:

A) $32,000 favorable.B) $32,000 unfavorable.C) $192,000 favorable.D) $192,000 unfavorable.

7. Lotus Company employs a standard cost system in which direct materials inventory is carried at standard cost. Lotus has established the following standards for the prime costs of one unit of product:

total factory wages for June were $1,600,000, 90 percent of which were for direct labor. Lotus manufactured 25,000 units of product during June using 302,000 pounds of direct material and 64,000 direct labor hours. The direct labor efficiency variance for June is:

A) $22,000 favorable.B) $22,000 unfavorable.C) $22,500 favorable.D) $22,500 unfavorable.

8. Danzig Company maintains warehouses that stock items carried by its e-retailer clients. When one of Danzig' clients receives an order from an online customer, the order is forward to Danzig. Danzig then pulls the item from the warehouse, packs it and ships it to the customer. Danzig uses a predetermined variable overhead rate based on direct labor-hours. According to the company's records, 0.04 direct labor-hours are required to fulfill an order for one item and the variable overhead rate is $3.25 per direct-labor hour. During August, Danzig shipped 120,000 orders using 4,600 direct labor-hours. The company incurred a total of $14,720 in variable overhead costs. The variable overhead spending variance during August was:

A) $230 favorable.B) $230 unfavorable.C) $650 favorable.D) $650 unfavorable.

9. Ventolin Company employs a standard cost system in which direct materials inventory is carried at standard cost. Ventolin has established the following standards for the prime costs of one unit of product:

During June, Ventolin purchased 165,000 pounds of direct material at a total cost of $1,171,500. The total factory wages for June were $800,000, 90 percent of which were for direct labor. Ventolin manufactured 25,000 units of product during June using 151,000 pounds of direct material and 32,000 direct labor hours. (Note that this is the same data that was provided for the previous question.) The direct labor rate variance for June is:

A) $16,000 favorable.B) $16,000 unfavorable.C) $96,000 favorable.D) $96,000 unfavorable.

10. V entolin Company employs a standard cost system in which direct materials inventory is carried at standard cost. Ventolin has established the following standards for the prime costs of one

During June, Ventolin purchased 165,000 pounds of direct material at a total cost of $1,171,500. The total factory wages for June were $800,000, 90 percent of which were for direct labor. Ventolin manufactured 25,000 units of product during June using 151,000 pounds of direct material and 32,000 direct labor hours. (Note that this is the same data that was provided for the previous question.) The direct labor efficiency variance for June is:

A) $11,000 favorable.B) $11,000 unfavorable.C) $11,250 favorable.D) $11,250 unfavorable.

11. A favorable materials price variance of $380 and an unfavorable materials quantity variance of $120 were reported during the current year. Based on these variances, you can conclude that:

A) the actual cost per unit of materials was less than the standard cost per unit.

B) the actual usage of materials was less than the standard allowed.

C) more materials were purchased than were used.

D) more materials were used than were purchased.

12. Ventolin Company employs a standard cost system in which direct materials inventory is carried at standard cost. Ventolin has established the following standards for the prime costs of one

The total factory wages for June were $800,000, 90 percent of which were for direct labor. Ventolin manufactured 25,000 units of product during June using 151,000 pounds of direct material and 32,000 direct labor hours. The price variance for the direct material acquired by the company during June is:

$15,100 favorable.B）$15,100 unfavorable.C）$16,500 favorable.D）$16,500 unfavorable. 13. Ventolin Company employs a standard cost system in which direct materials inventory is carried at standard cost. Ventolin has established the following standards for the prime costs of one

The total factory wages for June were $800,000, 90 percent of which were for direct labor. Ventolin manufactured 25,000 units of product during June using 151,000 pounds of direct material and 32,000 direct labor hours. (Note that this is the same data that was provided for the previous question.) The direct material quantity variance for June is:

$7,000 favorable.B）$7,000 unfavorable.C）$7,100 favorable.D）$7,100 unfavorable.

14. Marseille Company, a clothing manufacturer, uses a standard costing system. Each unit of a finished product contains 2 yards of cloth. However, there is unavoidable waste of 25%, calculated on input quantities, when the cloth is cut for assembly. The cost of the cloth is $6 per yard. The standard direct material cost for cloth per unit of finished product is:

A) $9.60.B) $12.00.C) $14.00.D) $15.00.

PROBLEM 1 Comprehensive Variance Analysis

Miller Toy Company manufactures a plastic swimming pool at its Westwood Plant. The plant has been experiencing problems for some time as shown by its June contribution format income

Janet Dunn, who has just been appointed general manager of the Westwood Plant, has been given instructions to “get things under control.” Upon reviewing the plant’s income statement, Ms. Dunn has concluded that the major problem lies in the variable cost of goods sold. She has been provided with the following standard cost per swimming pool:

Ms. Dunn has determined that during June the plant produced 15,500 pools and incurred the following costs:

a. Purchased 58,000 pounds of materials at a cost of $2.00 per pound.

b. Used 51,000 pounds of materials in production. (Finished goods and work in process inventories are insignificant and can be ignored.)

c. Worked 12,100 direct labor-hours at a cost of $10.20 per hour.

d. Incurred variable manufacturing overhead cost totaling $18,900 for the month. A total of 6,000 machine-hours was recorded.

It is the company’s policy to close all variances to cost of goods sold on a monthly basis.

Required:

1. Compute the following variances for June:

a. Direct materials price and quantity variances.

b. Direct labor rate and efficiency variances.

c. Variable overhead spending and efficiency variances.

2. Summarize the variances that you computed in (1) above by showing the net overall favorable or unfavorable variance for the month. What impact did this figure have on the company’s income statement? Show computations.

3. Pick out the two most significant variances that you computed in (1) above. Explain to Ms. Dunn possible causes of these variances.

PROBLEM 2 Basic Variance Analysis

Becton Labs, Inc., produces various chemical compounds for industrial use. One compound, called Fludex, is prepared by means of an elaborate distilling process. The company has developed

During November, the following activity was recorded by the company relative to production of Fludex:

a. Materials purchased, 12,500 ounces at a cost of $240,625.

b. There was no beginning inventory of materials; however, at the end of the month, 3,300 ounces of material remained in ending inventory.

c. The company employs 38 lab technicians to work on the production of Fludex. During November, each worked an average of 165 hours each at an average rate of $11.50 per hour.

d. Variable manufacturing overhead is assigned to Fludex on the basis of direct labor-hours. Variable manufacturing overhead costs during November totaled $20,378.

e. During November, 3,500 good units of Fludex were produced.

The company’s management is anxious to determine the efficiency of the Fl udex production activities.

Required:

1. For materials used in the production of Fludex:

a. Compute the price and quantity variances.

b. The materials were purchased from a new supplier who is anxious to enter into a long-term purchase contract. Would you recommend that the company sign the contract? Explain.

2. For direct labor employed in the production of Fludex:

a. Compute the rate and efficiency variances.

b. In the past, the 38 technicians employed in the production of Fludex consisted of 23 senior technicians and 15 assistants. During November, the company experimented with fewer senior technicians and more assistants in order to save costs. Would you recommend that the new labor mix be continued? Explain.

3. Compute the variable overhead spending and efficiency variances. What relation can you see between this efficiency variance and the labor efficiency variance?

答案

Problem 1 1. a.

Actual Quantity of Input, at Actual Price Actual Quantity of Input, at Standard Price Standard Quantity

Allowed for Actual

Output, at Standard Price

(AQ × AP) (AQ × SP) (SQ × SP)

58,000 pounds × $2.00 per pound 58,000 pounds × $2.05 per pound 46,500 pounds* × $2.05 per pound

= $116,000 = $118,900 = $95,325

*15,500 pools × 3.0 pounds per pool = 46,500 pounds

Alternative Solution:

Materials price variance = AQ (AP – SP)

58,000 pounds ($2.00 per pound – $2.05 per pound) = $2,900 F

Materials quantity variance = SP (AQ – SQ)

$2.05 per pound (51,000 pounds – 46,500 pounds) = $9,225 U

Actual Hours of Input, at the Actual

Rate Actual Hours of Input,

at the Standard

Rate

Standard Hours

Allowed for Actual

Output, at the

Standard Rate

(AH × AR) (AH × SR) (SH × SR)

12,100 hours

× $10.20 per hour

12,100 hours

× $9.50 per hour

12,400 hours*

× $9.50 per hour

= $123,420 = $114,950 = $117,800

*15,500 pools × 0.8 hours per pool = 12,400 hours

Alternative Solution:

Labor rate variance = AH (AR – SR)

12,100 hours ($10.20 per hour – $9.50 per hour) = $8,470 U Labor efficiency variance = SR (AH – SH)

$9.50 per hour (12,100 hours – 12,400 hours) = $2,850 F

Actual Hours of Input, at the Actual

Rate Actual Hours of

Input, at the

Standard Rate

Standard Hours

Allowed for Actual

Output, at the

Standard Rate

(AH × AR) (AH × SR) (SH × SR)

$18,900 6,000 hours

× $3.20 per hour

6,200 hours* × $3.20 per hour

= $19,200 = $19,840

*15,500 pools × 0.4 hours per pool = 6,200 hours

Alternative Solution:

Variable overhead spending variance = AH (AR – SR)

6,000 hours ($3.15 per hour* – $3.20 per hour) = $300 F

*$18,900 ÷ 6,000 hours = $3.15 per hour

Variable overhead efficiency variance = SR (AH – SH)

$3.20 per hour (6,000 hours – 6,200 hours) = $640 F

2. Summary of variances:

Material price variance .....................................................................$ 2,900 F

Material quantity variance ................................................................9,225 U

Labor rate variance ...........................................................................8,470 U

Labor efficiency variance .................................................................2,850 F

Variable overhead spending variance ...............................................300 F

Variable overhead efficiency variance .............................................. 640 F

Net variance ......................................................................................$11,005 U The net unfavorable variance of $11,005 for the month caused

the plant’s variable cost of goods sold to increase from the

budgeted level of $232,965 to $243,970:

Budgeted cost of goods sold at $15.03 per pool .........................................................$232,965 Add the net unfavorable variance, as above ............................................................... 11,005 Actual cost of goods sold............................................................................................$243,970 This $11,005 net unfavorable variance also accounts for the

difference between the budgeted net operating income and the actual net operating income for the month.

Budgeted net operating income ....................................................................................$50,835 Deduct the net unfavorable variance added to cost of goods sold for the month ......... 11,005 Net operating income ...................................................................................................$39,830 3. The two most significant variances are the materials quantity

variance and the labor rate variance. Possible causes of the

variances include:

Materials quantity variance: Outdated standards, unskilled workers, poorly adjusted machines, carelessness, poorly trained workers, inferior quality materials.

Labor rate variance: Outdated standards, change in pay

scale, overtime pay.

Problem 2

1. a. In the solution below, the materials price variance is computed

on the entire amount of materials purchased whereas the

materials quantity variance is computed only on the amount of materials used in production:

Actual Quantity of Input, at Actual

Price

Actual Quantity of

Input, at Standard Price

Standard Quantity

Allowed for Actual

Output, at Standard

Price

(AQ × AP) (AQ × SP) (SQ × SP)

12,500 ounces

× $20.50 per ounce

9,100 ounces*

× $20.50 per ounce

$240,625 = $256,250 = $186,550

*3,500 units × 2.6 ounces per unit = 9,100 ounces

Alternatively:

Materials price variance = AQ (AP – SP)

12,500 ounces ($19.25 per ounce* – $20.50 per ounce) = $15,625 F

*$240,625 ÷ 12,500 ounces = $19.25 per ounce

Materials quantity variance = SP (AQ – SQ)

$20.50 per ounce (9,200 ounces – 9,100 ounces) = $2,050 U

b. Yes, the contract probably should be signed. The new price of $19.25 per ounce is substantially lower than the old price of $20.50 per ounce, resulting in a favorable price variance of $15,625 for the month. Moreover, the material from the new supplier appears to cause little or no problem in production as shown by the small materials quantity variance for the month.

2. a.

Actual Hours of Input, at the Actual Rate Actual Hours of Input, at the Standard Rate Standard Hours

Allowed for Actual Output, at the

Standard Rate

(AH × AR) (AH × SR) (SH × SR)

6,270 hours* × $11.50 per hour 6,270 hours × $13.00 per hour 5,250 hours** × $13.00 per hour

= $72,105 = $81,510 = $68,250

*38 technicians × 165 hours per technician = 6,270 hours **3,500 units × 1.5 hours per unit = 5,250 hours

Alternatively:

Labor rate variance = AH (AR – SR)

6,270 hours ($11.50 per hour – $13.00 per hour) = $9,405 F

Labor efficiency variance = SR (AH – SH)

$13.00 per hour (6,270 hours – 5,250 hours) = $13,260 U

b. No, the new labor mix probably should not be continued.

Although it decreases the average hourly labor cost from $13.00 to $11.50, thereby causing a $9,405 favorable labor rate variance, this savings is more than offset by a large

unfavorable labor efficiency variance for the month. Thus, the new labor mix increases overall labor costs.

3. Actual Hours of Input, at the Actual Rate Actual Hours of Input, at the Standard Rate Standard Hours

Allowed for Actual Output, at the

Standard Rate

(AH × AR) (AH × SR) (SH × SR) 6,270 hours* × $4.00 per hour 5,250 hours**

×

$4.00 per hour

$20,378 = $25,080 = $21,000

* Based on direct labor hours:

38 technicians × 165 hours per technician = 6,270 hours

** 3,500 units × 1.5 hours per unit = 5,250 hours

Alternatively:

Variable overhead spending variance = AH (AR – SR)

6,270 hours ($3.25 per hour* – $4.00 per hour) = $4,703 F *$20,378 ÷ 6,270 hours = $3.25 per hour

Variable overhead efficiency variance = SR (AH – SH)

$4.00 per hour (6,270 hours – 5,250 hours) = $4,080 U

Both the labor efficiency variance and the variable overhead efficiency variance are computed by comparing actual

labor-hours to standard labor-hours. Thus, if the labor efficiency variance is unfavorable, then the variable overhead efficiency variance will be unfavorable as well.