Individual Assignments Chapter 8, 9, & 11

E 8-11 Variable Cost + Opportunity Cost = Minimum Transfer Price $8 + $0 = $8 $8 + $22 = $30

It has to do with what they have an excess of. If they need to get rid of some of their product they will have to go with the smaller price. BE 9-8 Stoker Company Budgeted Income Statement For the Year Ending December 31, 2005 Sales Cost of Goods Sold (50,000 $24) Gross Profit Selling & Administrative Expenses Income From Operations Income Tax Expense Net Income $2,000,000 1,200,000 $800,000 300,000 $500,000 150,000 $350,000

Question 11-2 Standards and budgets are technically the same. They are both predetermined costs and they contribute to management planning and control. The difference between the two is the way the terms are expressed. Standard is a unit amount and budget is a total amount. A standard is the budgeted cost per unit of product. Question 11-11 Price Variance = 1-2 Quantity Variance = 2-3 Total Variance = 1-3

Exercise 11-6

Total Materials Variance (AQ) (AP) (SQ) (SP) = TMV 1,250 $128 1,200 $130 = $4,000 Materials Price Variance (AQ) (AP) (AQ) (SP) = MPV 1,250 $130 1,250 $130 = $-2,500 Materials Quantity Variance (AQ) (SP) (SQ) (SP) = MQV 1,250 $130 1,200 $130 = $6,500 Total Labor Variance (AH) (AR) (SH) (SR) = TLV 4,250 $13 1,200 $12 = $40,850 Labor Price Variance (AH) (AR) (AH) (SR) = LPV 4,250 $13 4,250 $12 = $4,250 Labor Quantity Variance (AH) (SR) (SH) (SR) = LQV 4,250 $12 1,200 $12 = $36,600 Inexperienced workers, faulty machinery, or just plain carelessness could cause the unfavorable materials variances.