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Exercise STD Costing

This document contains 3 problems related to standard costing and variance analysis: 1) A company produced 2,000 units using 7,800 lbs of material costing $40,950. The material quantity variance must be calculated based on the standard of 4 lbs per unit at $5.10 per lb. 2) A company had standard direct labor hours of 10,000 at $3.75 per hour. With an unfavorable variance of $4,200, the actual hours worked must be calculated. 3) Armando Corporation produces a product with standard costs of $93 per unit. Given production and actual costs for July, variances must be calculated for material purchase price, material quantity,

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333 views1 page

Exercise STD Costing

This document contains 3 problems related to standard costing and variance analysis: 1) A company produced 2,000 units using 7,800 lbs of material costing $40,950. The material quantity variance must be calculated based on the standard of 4 lbs per unit at $5.10 per lb. 2) A company had standard direct labor hours of 10,000 at $3.75 per hour. With an unfavorable variance of $4,200, the actual hours worked must be calculated. 3) Armando Corporation produces a product with standard costs of $93 per unit. Given production and actual costs for July, variances must be calculated for material purchase price, material quantity,

Uploaded by

Maria Callista Lovina
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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ASSIGNMENT – STANDARD COSTING (VARIANCE ANALYSIS)

PROBLEM 1

A company uses a standard cost system to account for its only product. The materials standard per unit
was 4 lbs. at $5.10 per lb. Operating data for April were as follows:
Material used ..................................................................... 7,800 lbs.
Cost of material used ......................................................... $ 40,950
Number of finished units produced .................................... 2,000
Required:
What was the material quantity variance for April (favorable or unfavorable)?

PROBLEM 2

Using this following data:


Standard direct labor rate .................................................................. $ 3.75
Actual direct labor rate................................................................ $ 3.50
Standard direct labor hours ............................................................... 10,000 DLH
Direct labor usage (efficiency) variance—unfavorable ...................... $ 4,200
Required:
What were the actual hours worked rounded to the nearest hour?

PROBLEM 3

Armando Corporation manufactures a product with the following standard costs:


Direct Materials-20 yards at $ 1.35 per yard $ 27
Direct Labor-4 hours at $9 per hour 36
Factory Overhead-4 direct labor hours at $7.50 per hour 30
(ratio of variable to fixed overhead is 2:1)
Total Standard cost per unit of output $ 93
Standards are based on normal monthly capacity of 2,400 direct labor hours. The following information
pertains to July:
Unit produced in July 500
Direct Materials purchased-18,000 yards at $1.38 per yard $ 24,840
Direct Materials used-9500 yards
Direct Labor-2,100 hours at $9.15 per hour 19,215
Actual factory Overhad 16,650
Required:
Compute the following variances and indicate whether they are favorable or unfavorable:
a. Material Purchase Price Variance
b. Material Quantity Variance
c. Labor Rate Variance
d. Efficiency Variance
e. Factory Overhead Variance

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