Cost ACCT exam 2

Direct Labor price variance? (How To/Answer) The Schuyler Corporation manufactures lamps with the following standards; "Direct Materials = 10lb @ $4.70 per lb (47.00); Direct manufacturing labor = 0.5hr @ $34 per hr (17.00)" The number of finished units = 10,000, 9,900 units were actually produced with the following results; "Direct Materials = 96,045lb used; Direct manufacturing labor = 4,900hr @ (155,820); during the month, materials purchased = 100,000lb @ (455,000). Input price variances are isolated upon purchase. Input efficiency variances are isolated at time of usage.

(actual quantity*budgeted price)-(actual quantity*actual price) -> (AQ*BP)-(AQ*AP)=price variance (4,900*34.00)-(155,820¹)=10,780 -> 166,600-155,820=10,780 since positive answer = 10,780 F ¹= Actual cost of manufacturing labor

Direct Labor price variance? (How To/Answer) Dunn, Inc., is a privately held furniture manufacturer. For August 2016, Dunn had the following standards for one of its products, a wicker chair: "Direct Materials = 2 square yards of input @ 4.80 per square yard. Direct Manufacturing Labor = 0.5 hours of input @ $11 per hour." The following data was compiled regarding actual performance of 2,000 chairs: " Square yards of input purchased & used = 3,600; Price per square yard = 5.10; Direct Manufacturing labor costs = 8,910; Actual hours of input = 900; Labor price per hour =9.90.

(actual quantity*budgeted price)-(actual quantity*actual price) -> (AQ*BP)-(AQ*AP)=price variance (900*11.00)-(900*9.90) -> 9,900-8,910=990 since positive answer = 990 F

Direct Materials price variance? (How To/Answer) Dunn, Inc., is a privately held furniture manufacturer. For August 2016, Dunn had the following standards for one of its products, a wicker chair: "Direct Materials = 2 square yards of input @ 4.80 per square yard. Direct Manufacturing Labor = 0.5 hours of input @ $11 per hour." The following data was compiled regarding actual performance of 2,000 chairs: " Square yards of input purchased & used = 3,600; Price per square yard = 5.10; Direct Manufacturing labor costs = 8,910; Actual hours of input = 900; Labor price per hour =9.90.

(actual quantity*budgeted price)-(actual quantity-actual price) -> (AQ*BP)-(AQ*AP)=price variance ; (3,600*4.80) - (3,600*5.10) -> 17,280-18,360=-1,080; since negative answer = 1,080 U

Direct Labor efficiency variance? (How To/Answer) Dunn, Inc., is a privately held furniture manufacturer. For August 2016, Dunn had the following standards for one of its products, a wicker chair: "Direct Materials = 2 square yards of input @ 4.80 per square yard. Direct Manufacturing Labor = 0.5 hours of input @ $11 per hour." The following data was compiled regarding actual performance of 2,000 chairs: " Square yards of input purchased & used = 3,600; Price per square yard = 5.10; Direct Manufacturing labor costs = 8,910; Actual hours of input = 900; Labor price per hour =9.90.

(budgeted quantity*budgeted price)-(actual quantity*budgeted price) -> (BQ*BP)-(AQ*BP)=efficiency variance ((0.5*2,000)*11.00)-(900*11.00) -> 11,000-9,900=1,100 since positive answer = 1,100 F

Direct Labor efficiency variance? (How To/Answer) The Schuyler Corporation manufactures lamps with the following standards; "Direct Materials = 10lb @ $4.70 per lb (47.00); Direct manufacturing labor = 0.5hr @ $34 per hr (17.00)" The number of finished units = 10,000, 9,900 units were actually produced with the following results; "Direct Materials = 96,045lb used; Direct manufacturing labor = 4,900hr @ (155,820); during the month, materials purchased = 100,000lb @ (455,000). Input price variances are isolated upon purchase. Input efficiency variances are isolated at time of usage.

(budgeted quantity*budgeted price)-(actual quantity*budgeted price) -> (BQ*BP)-(AQ*BP)=efficiency variance ((0.5*9,900)*34)-(4,900*34)=1,700 -> 168,300-166,600=1,700 since positive answer = 1,700 F

Direct Materials efficiency variance? (How To/Answer) The Schuyler Corporation manufactures lamps with the following standards; "Direct Materials = 10lb @ $4.70 per lb (47.00); Direct manufacturing labor = 0.5hr @ $34 per hr (17.00)" The number of finished units = 10,000, 9,900 units were actually produced with the following results; "Direct Materials = 96,045lb used; Direct manufacturing labor = 4,900hr @ (155,820); during the month, materials purchased = 100,000lb @ (455,000). Input price variances are isolated upon purchase. Input efficiency variances are isolated at time of usage.

(budgeted quantity*budgeted price)-(actual quantity*budgeted price) -> (BQ*BP)-(AQ*BP)=efficiency variance ((10*9,900)*4.70)-(96,045*4.70)=13,888.5-> (465,300-451,411.5)=13,888.5 since positive answer = 13,888.5 F

Direct Materials efficiency variance? (How To/Answer) Dunn, Inc., is a privately held furniture manufacturer. For August 2016, Dunn had the following standards for one of its products, a wicker chair: "Direct Materials = 2 square yards of input @ 4.80 per square yard. Direct Manufacturing Labor = 0.5 hours of input @ $11 per hour." The following data was compiled regarding actual performance of 2,000 chairs: " Square yards of input purchased & used = 3,600; Price per square yard = 5.10; Direct Manufacturing labor costs = 8,910; Actual hours of input = 900; Labor price per hour =9.90.

(budgeted quantity*budgeted price)-(actual quantity*budgeted price) -> (BQ*BP)-(AQ*BP)=efficiency variance ((2*2,000)*4.80)-(3,600*4.80) -> 19,200-17,280=1,920; since positive answer = 1,920 F

The Howell Company has prepared a sales budget of 43,000 finished units for a 3 month period. The company has an inventory of 10,000 units of finished goods on hand at December 31 and has a target finished goods inventory of 20,000 at the end of the succeeding quarter. It takes 2 gallons of direct materials to make one unit of finished product. The company has an inventory of 66,000 gallons of direct materials at December 31 and has a target ending inventory of 76,000 gallons at the end of the succeeding quarter. How many gallons of direct materials should Howell Company purchase during the 3 months ending March 31? (Answer/How To)

116,000 (Production Budget for Finished Goods) Sales+End Inventory=Total Required-Beginning Inventory = Units to be Produced -> (43,000+20,000=63,000-10,000=53,000¹) Units used in Production+End Inventory=Total Required-Beginning Inventory=Units to be Purchased -> 106,000¹+76,000=182,000-66,000=116,000 ¹=Units to be produced * 2 = units used in production

Cost per unit for financial calculator Parker Company produces mathematical and financial Calculators and operates at capacity. Data related to the two products are presented here (Mathematical/Financial): Annual Production in units (50,000/100,000), Direct material costs (150,000/300,000), Direct manufacturing labor costs (50,000/100,000), Direct manufacturing labor hours (2,500/5,000), Machine hours (25,000/50,000), Number of production runs (50/50), Inspection hours (1,000/500); Total manufacturing overhead costs are as follows: Machining costs (412,500), setup costs (140,000), Inspection costs (108,000); choose an appropriate cost driver for each overhead cost pool and compute the manufacturing cost per unit for each product.

Cost of Financial Calculator = 300,000+100,000+(50,000*5.5)+(50*1,400)+(500*72)=781,000 Cost per unit = 781,000/100,000=$7.81

Cost per unit for mathematical calculator Parker Company produces mathematical and financial Calculators and operates at capacity. Data related to the two products are presented here (Mathematical/Financial): Annual Production in units (50,000/100,000), Direct material costs (150,000/300,000), Direct manufacturing labor costs (50,000/100,000), Direct manufacturing labor hours (2,500/5,000), Machine hours (25,000/50,000), Number of production runs (50/50), Inspection hours (1,000/500); Total manufacturing overhead costs are as follows: Machining costs (412,500), setup costs (140,000), Inspection costs (108,000); choose an appropriate cost driver for each overhead cost pool and compute the manufacturing cost per unit for each product

Cost of Mathematical Calculator = 150,000+50,000+(25,000*5.5)+(50*1,400)+(1,000*72)=479,500 Cost per unit = 479,500/50,000=$9.59

Prepare journal entries to record the variances. (record purchase of direct materials) The Schuyler Corporation manufactures lamps with the following standards; "Direct Materials = 10lb @ $4.70 per lb (47.00); Direct manufacturing labor = 0.5hr @ $34 per hr (17.00)" The number of finished units = 10,000, 9,900 units were actually produced with the following results; "Direct Materials = 96,045lb used; Direct manufacturing labor = 4,900hr @ (155,820); during the month, materials purchased = 100,000lb @ (455,000). Input price variances are isolated upon purchase. Input efficiency variances are isolated at time of usage.

Direct Materials Control 470,000 D Direct Materials Price Variance 15,000 C Accounts Payable 455,000 C

Prepare journal entries to record the variances. (record the purchase and usage of direct manufacturing labor) The Schuyler Corporation manufactures lamps with the following standards; "Direct Materials = 10lb @ $4.70 per lb (47.00); Direct manufacturing labor = 0.5hr @ $34 per hr (17.00)" The number of finished units = 10,000, 9,900 units were actually produced with the following results; "Direct Materials = 96,045lb used; Direct manufacturing labor = 4,900hr @ (155,820); during the month, materials purchased = 100,000lb @ (455,000). Input price variances are isolated upon purchase. Input efficiency variances are isolated at time of usage.

Work in Process 168,300 D Direct Labor Price Variance 10,780 C Direct Labor Efficiency Variance 1,700 C Wages Payable 155,820 C

Prepare journal entries to record the variances. (record the usage of direct materials) The Schuyler Corporation manufactures lamps with the following standards; "Direct Materials = 10lb @ $4.70 per lb (47.00); Direct manufacturing labor = 0.5hr @ $34 per hr (17.00)" The number of finished units = 10,000, 9,900 units were actually produced with the following results; "Direct Materials = 96,045lb used; Direct manufacturing labor = 4,900hr @ (155,820); during the month, materials purchased = 100,000lb @ (455,000). Input price variances are isolated upon purchase. Input efficiency variances are isolated at time of usage.

Work in Process Control 465,300 D Direct Materials Efficiency Variance 13,888.5 C Direct Materials Control 451,411.5 C

Direct Materials price variance? (How To/Answer) The Schuyler Corporation manufactures lamps with the following standards; "Direct Materials = 10lb @ $4.70 per lb (47.00); Direct manufacturing labor = 0.5hr @ $34 per hr (17.00)" The number of finished units = 10,000, 9,900 units were actually produced with the following results; "Direct Materials = 96,045lb used; Direct manufacturing labor = 4,900hr @ (155,820); during the month, materials purchased = 100,000lb @ (455,000). Input price variances are isolated upon purchase. Input efficiency variances are isolated at time of usage.

(actual quantity*budgeted price)-(actual quantity*actual price) -> (AQ*BP)-(AQ*AP)=price variance (100,000*4.70)-(455,000¹)=15,000 -> 470,000-455,000=15,000 since positive answer = 15,000 F ¹=total cost of materials purchased during the month

The Mendez Company expects sales in 2012 of 210,000 units of serving trays, Mendez's beginning inventory for 2012 is 12,000 trays and its target ending inventory is 24,000 trays. Compute the number of trays budgeted for production in 2012.

222,000

Manufacturing cost per unit rates Parker Company produces mathematical and financial Calculators and operates at capacity. Data related to the two products are presented here (Mathematical/Financial): Annual Production in units (50,000/100,000), Direct material costs (150,000/300,000), Direct manufacturing labor costs (50,000/100,000), Direct manufacturing labor hours (2,500/5,000), Machine hours (25,000/50,000), Number of production runs (50/50), Inspection hours (1,000/500); Total manufacturing overhead costs are as follows: Machining costs (412,500), setup costs (140,000), Inspection costs (108,000); choose an appropriate cost driver for each overhead cost pool and compute the manufacturing cost per unit for each product.

Machining rate = 412,500/(25,000+50,000)=$5.5/Hr Setup Rate = 140,000/(50+50)=$1400/Run Inspection Rate = 108,000/(1,000+500)=$72/Hr

The Mendez Company expects sales in 2012 of 210,000 units of serving trays, Mendez's beginning inventory for 2012 is 12,000 trays and its target ending inventory is 24,000 trays. Compute the number of trays budgeted for production in 2012. (How TO)

Sales + End Inventory = Total Required - Beginning Inventory = Units to be produced (210,000+24,000=234,000-12,000=222,000)