Chapter 08 Answers

Chapter 8
Standard Costs
True/False
1.Adirectmaterialquantitystandardgenerallyincludesanallowanceforwaste.
Level:EasyLO:1Ans:T
2.Practicalstandardsallowfornormalmachinedowntimeandemployeerestperiods.
Level:EasyLO:1Ans:T
3.Idealstandardscanbeusedinforecastingandplanningwhereaspracticalstandardscannotbeusedfor
suchpurposes.
Level:EasyLO:1Ans:F
4.Mostcompaniescomputethematerialspricevariancewhenmaterialsareplacedintoproduction.
Level:EasyLO:2Ans:F
5.Amaterialspricevarianceisfavorableiftheactualpriceexceedsthestandardprice.
Level:EasyLO:2Ans:F
6.Anunfavorablematerialsquantityvarianceoccurswhentheactualquantityusedinproductionisless
thanthestandardquantityallowedfortheactualoutputoftheperiod.
Level:EasyLO:2Ans:F
7.Anunfavorablelaborratevariancecanoccurifworkerswithhighhourlywageratesareassignedto
workonproductswhosestandardsassumeworkerswithlowhourlywagerates.
Level:EasyLO:3Ans:T
8.Ifvariablemanufacturingoverheadisappliedbasedondirectlaborhours,itisimpossibletohavea
favorablelaborefficiencyvarianceandunfavorablevariableoverheadefficiencyvarianceforthesame
period.
Level:MediumLO:4Ans:T
9.(Appendix)Afavorablematerialsquantityvariancewouldappearasadebitinajournalentry.
Level:MediumLO:7Ans:F
Brewer,IntroductiontoManagerialAccounting,3/e
144
10.(Appendix)Althoughformalentryofstandardcostsandvariancesintotheaccountingrecordsisnot
required,someorganizationsmakesuchentriesinordertoemphasizetheimportanceofvariancesaswell
astosimplifythebookkeepingprocess.
Level:EasyLO:7Ans:T
11.Astandardcanberegardedasthebudgetedcostforoneunitofproduct.
Level:EasyLO:8Ans:T
12.Inusingastatisticalcontrolchart,observationpointsplottedbetweentheupperandlowerlimitsare
consideredtoberandomorchanceoccurrencesandwouldnottypicallyresultinaninvestigation.
Level:EasyLO:8Ans:T
MultipleChoice
13.Whichofthefollowingstatementsconcerningidealstandardsisincorrect?
A)Idealstandardsgenerallydonotprovidethebestmotivationforworkers.
B)Idealstandardsdonotmakeallowancesforwaste,spoilage,andmachinebreakdowns.
C)Idealstandardsarebettersuitedforcashbudgetingthanpracticalstandards.
D)Idealstandardsmaybebetterthanpracticalstandardswhenmanagersseekcontinualimprovement.
Source:CMA,adapted
Level:MediumLO:1Ans:C
14.Undertraditionalstandardcosting,whichofthefollowingwouldcommonlybeincludedwhensetting
astandardquantityfordirectmaterial?
A)Aabove
B)Babove
C)Cabove
D)Dabove
Level:MediumLO:1Ans:A
145
15.Whencomputingstandardcostvariances,thedifferencebetweenactualandstandardpricemultiplied
byactualquantityyieldsa(n):
A)combinedpriceandquantityvariance.
B)efficiencyvariance.
C)pricevariance.
D)quantityvariance.
Source:CMA,adapted
Level:EasyLO:2,3Ans:C
16.Poorqualitymaterialscouldhaveanunfavorableeffectonwhichofthefollowingvariances?
A)Aabove
B)Babove
C)Cabove
D)Dabove
Level:MediumLO:2,3Ans:A
17.(Appendix)Whentheactualpricepaidoncreditforarawmaterialexceedsitsstandardprice,the
journalentrywouldinclude:
A)DebittoRawMaterials;CredittoMaterialsPriceVariance
B)DebittoAccountsPayable;CredittoMaterialsPriceVariance
C)DebittoRawMaterials;DebittoMaterialsPriceVariance
D)DebittoAccountsPayable;DebittoMaterialsPriceVariance
Level:MediumLO:2,7Ans:C
18.(Appendix)Whentheactualpricepaidoncreditforarawmaterialislessthanitsstandardprice,the
journalentrywouldinclude:
A)CredittoRawMaterials;CredittoMaterialsPriceVariance
B)CredittoAccountsPayable;CredittoMaterialsPriceVariance
C)CredittoRawMaterials;DebittoMaterialsPriceVariance
D)CredittoAccountsPayable;DebittoMaterialsPriceVariance
Level:MediumLO:2,7Ans:B
146
19.(Appendix)Whentheactualamountofarawmaterialusedinproductionislessthanthestandard
amountallowedfortheactualoutput,thejournalentrywouldinclude:
A)CredittoRawMaterials;CredittoMaterialsQuantityVariance
B)CredittoWorkInProcess;CredittoMaterialsQuantityVariance
C)CredittoRawMaterials;DebittoMaterialsQuantityVariance
D)CredittoWorkInProcess;DebittoMaterialsQuantityVariance
20.(Appendix)Whentheactualamountofarawmaterialusedinproductionisgreaterthanthestandard
amountallowedfortheactualoutput,thejournalentrywouldinclude:
A)CredittoRawMaterials;CredittoMaterialsQuantityVariance
B)CredittoWorkInProcess;CredittoMaterialsQuantityVariance
C)CredittoRawMaterials;DebittoMaterialsQuantityVariance
D)CredittoWorkInProcess;DebittoMaterialsQuantityVariance
21.Whichofthefollowingwouldproduceamaterialspricevariance?
A)anexcessquantityofmaterialsused.
B)anexcessnumberofdirectlaborhoursworkedincompletingajob.
C)shippingmaterialstotheplantbyairfreightratherthanbytruck.
D)breakageofmaterialsinproduction.
Level:EasyLO:2Ans:C
22.Thestandardpriceperunitofmaterialsisusedinthecalculationofwhichofthefollowingvariances?
A)Aabove
B)Babove
C)Cabove
D)Dabove
Source:CPA,adapted
Level:MediumLO:2Ans:D
23.(Appendix)Alaborefficiencydebitbalanceindicatesthat:
A)Thewageratepaidtoproductionworkerswaslessthestandard.
B)Thewageratepaidtoproductionworkerswasabovethestandard.
C)Lesslabortimewasspentonproductionthanwascalledforbythestandard.
D)Morelabortimewasspentonproductionthanwascalledforbythestandard.
147
Source:CPA,adapted
Level:HardLO:3,7Ans:D
148
24.(Appendix)Whentheactualwageratepaidtodirectlaborworkersexceedsthestandardwagerate,
thejournalentrywouldinclude:
A)CredittoWagesPayable;CredittoLaborRateVariance
B)CredittoWorkInProcess;CredittoLaborRateVariance
C)CredittoWagesPayable;DebittoLaborRateVariance
D)CredittoWorkInProcess;DebittoLaborRateVariance
25.(Appendix)Whentheactualwageratepaidtodirectlaborworkersislessthanthestandardwagerate,
thejournalentrywouldinclude:
A)DebittoWagesPayable;CredittoLaborRateVariance
B)DebittoWorkInProcess;CredittoLaborRateVariance
C)DebittoWagesPayable;DebittoLaborRateVariance
D)DebittoWorkInProcess;DebittoLaborRateVariance
26.(Appendix)Whentheactualdirectlaborhoursexceedthestandarddirectlaborhoursallowedforthe
actualoutputoftheperiod,thejournalentrywouldinclude:
A)CredittoWagesPayable;CredittoLaborEfficiencyVariance
B)CredittoWorkInProcess;CredittoLaborEfficiencyVariance
C)CredittoWagesPayable;DebittoLaborEfficiencyVariance
D)CredittoWorkInProcess;DebittoLaborEfficiencyVariance
27.Whichofthefollowingwouldproducealaborratevariance?
A)Poorqualitymaterialscausingbreakageandworkinterruptions.
B)Useofpersonswithhighhourlywageratesintasksthatcallforlowhourlywagerates.
C)Excessivenumberofhoursworkedincompletingajob.
D)Anunfavorablevariableoverheadspendingvariance.
Level:MediumLO:3Ans:B
28.Inacertainstandardcostingsystemdirectlaborhoursareusedasthebaseforapplyingvariable
manufacturingoverheadcosts.Thestandarddirectlaborrateistwicethevariablemanufacturingoverhead
rate.Lastperiodthelaborefficiencyvariancewasunfavorable.Fromthisinformationonecanconclude
thatlastperiodthevariableoverheadefficiencyvariancewas:
A)unfavorableandhalfthelaborefficiencyvariance.
B)favorableandhalfthelaborefficiencyvariance.
C)unfavorableandtwicethelaborefficiencyvariance.
D)favorableandtwicethelaborefficiencyvariance.
149
29.(Appendix)Ifrawmaterialsarecarriedintherawmaterialsinventoryatstandardcost,thenitis
reasonabletoassumethat:
A)thepricevarianceisrecognizedwhenmaterialsarepurchased.
B)thepricevarianceisrecognizedwhenmaterialsareplacedintoproduction.
C)allvariancesareproratedbetweenworkinprocess,finishedgoods,andcostofgoodssold.
D)therawmaterialsaccountisoverstated.
30.Whichofthefollowingstatementsisagooddescriptionofthevariancesthatshouldbeinvestigated
underthemanagementbyexceptionconcept?
A)allvariancesshouldbeinvestigated.
B)onlyunfavorablevariancesshouldbeinvestigated.
C)asmallrandomsampleofallvariancesshouldbeinvestigated.
D)unusuallylargefavorableandunfavorablevariancesshouldbeinvestigated.
31.ThefollowingdirectlaborinformationpertainstothemanufactureofproductGlu:
WhatisthestandarddirectlaborcostperunitofproductGlu?
A)$30
B)$24
C)$15
D)$12
Source:CPA,adapted
32.(Appendix)AndersonCompanypurchased20,000poundsofdirectmaterialat$0.70perpound.The
standardcostperpoundofmaterialis$0.60perpound.Thegeneralledgerentrytorecordtheissuanceof
materialswouldinclude:
A)adebittoMaterialsPriceVariance$2,000.
B)acredittoMaterialsPriceVarianceof$2,000.
C)acredittoRawMaterialsof$0.70perpoundtimesthenumberofpoundsissued.
D)acredittoRawMaterialsof$0.60perpoundtimesthenumberofpoundsissued.
Level:MediumLO:2,7Ans:D
150
33.Thefollowingmaterialsstandardshavebeenestablishedforaparticularrawmaterialusedinthe
companyssoleproduct:
Thefollowingdatapertaintooperationsconcerningtheproductforthelastmonth:
Whatisthematerialsquantityvarianceforthemonth?
A)$3,320F
B)$3,150F
C)$4,980U
D)$4,725U
Level:EasyLO:2Ans:A
34.Thefollowingmaterialsstandardshavebeenestablishedforaparticularrawmaterialusedinthe
companyssoleproduct:
Thefollowingdatapertaintooperationsforthelastmonth:
Whatisthematerialspricevarianceforthemonth?
A)$1,820U
B)$1,760U
C)$3,420F
D)$352U
Level:EasyLO:2Ans:C
151
35.Aquantityofaparticularrawmaterialwaspurchasedfor$43,250.Thestandardcostofthematerial
was$2.00perkilogramandtherewasanunfavorablematerialspricevarianceof$3,250.Howmany
kilogramswerepurchased?
A)20,000
B)21,625
C)23,250
D)24,875
Source:CIMA,adapted
Level:HardLO:2Ans:A
36.Atotalof6,850kilogramsofarawmaterialwaspurchasedatatotalcostof$21,920.Thematerial
pricevariancewas$1,370favorable.Thestandardpriceperkilogramfortherawmaterialmustbe:
A)$0.20
B)$3.00
C)$3.20
D)$3.40
Source:CIMA,adapted
Level:HardLO:2Ans:D
37.(Appendix)ResultsofoperationsfortheAndersonCompanyindicatedthattheactualdirectlaborrate
forthemonthofMaywas$9.75whilethestandardratewas$10.00.Thegeneralledgerentrytorecord
theincurrenceofdirectlaborcostwouldinclude:
A)adebittoWorkInProcessfortheactualnumberofhourstimes$9.75perhour.
B)adebittoWorkInProcessforthestandardnumberofhourstimes$10.00perhour.
C)adebittoWorkInProcessforthestandardnumberofhourstimes$9.75perhour.
D)adebittoWorkInProcessfortheactualnumberofhourstimes$10.00perhour.
38.Thefollowinglaborstandardshavebeenestablishedforaparticularproduct:
Whatisthelaborefficiencyvarianceforthemonth?
A)$10,600U
B)$11,080U
C)$11,080F
D)$10,480U
Level:EasyLO:3Ans:D
152
153
Whatisthelaborratevarianceforthemonth?
A)$1,908U
B)$2,430U
C)$4,284U
D)$4,284F
Level:EasyLO:3Ans:B
40.ThefollowinginformationpertainstoBatesCompanysdirectlaborforMarch:
WhatwasBatestotalactualdirectlaborcostforMarch?
A)$117,600
B)$118,000
C)$134,000
D)$134,400
Source:CPA,adapted
Level:HardLO:3Ans:A
154
41.Thedirectlaborstandardsforaparticularproductare:
4hoursofdirectlabor@$12.00perdirectlaborhour=$48.00
DuringOctober,3,350unitsofthisproductweremade,whichwas150unitslessthanbudgeted.The
laborcostincurredwas$159,786and13,450directlaborhourswereworked.Thedirectlaborvariances
forthemonthwere:
A)Aabove
B)Babove
C)Cabove
D)Dabove
Source:CIMA,adapted
42.Thestandardcostcardofaparticularproductspecifiesthatitrequires4.5directlaborhoursat$12.80
perdirectlaborhour.DuringMarch,2,300unitsoftheproductwereproducedanddirectlaborwagesof
$128,300wereincurred.Atotalof11,700directlaborhourswereworked.Thedirectlaborvariancesfor
themonthwere:
A)Aabove
B)Babove
C)Cabove
D)Dabove
Source:CIMA,adapted
Level:EasyLO:3Ans:D
155
43.Thefollowingstandardsforvariablemanufacturingoverheadhavebeenestablishedforacompany
thatmakesonlyoneproduct:
Whatisthevariableoverheadefficiencyvarianceforthemonth?
A)$20,299F
B)$18,769F
C)$1,848F
D)$20,617F
Level:EasyLO:4Ans:A
Whatisthevariableoverheadspendingvarianceforthemonth?
A)$3,420U
B)$3,150F
C)$10,050U
D)$13,200U
Level:EasyLO:4Ans:A
156
45.(Appendix)DuringthemonthofMay,DominoManufacturingCorporationpurchasedmaterialsthat
hadatotalstandardcostof$57,000.TheMaterialsPriceVarianceonthesematerialswas$3,000
favorable.WhatsummaryjournalentrywouldDominomaketorecordthispurchaseandvariancefor
May?
A)Aabove
B)Babove
C)Cabove
D)Dabove
Level:EasyLO:7Ans:C
46.PoliteCorporationisdevelopingstandardsforitsproducts.Oneproductrequiresaninputthatis
purchasedfor$44.00perkilogramfromthesupplier.Bypayingcash,thecompanygetsadiscountof7%
offthispurchaseprice.Shippingcostsfromthesupplierswarehouseamountto$2.89perkilogram.
Receivingcostsare$0.51perkilogram.Thestandardpriceperkilogramofthisinputshouldbe:
A)$43.68
B)$50.48
C)$44.00
D)$44.32
Level:EasyLO:1Ans:D
47.BjornstadCorporationisdevelopingstandardsforitsproducts.Eachunitofoutputoftheproduct
requires0.94kilogramofaparticularinput.Theallowanceforwasteandspoilageis0.02kilogramofthis
inputforeachunitofoutput.Theallowanceforrejectsis0.11kilogramofthisinputforeachunitof
output.Thestandardquantityinkilogramsofthisinputperunitofoutputshouldbe:
A)0.94
B)1.07
C)0.81
D)0.92
Level:EasyLO:1Ans:B
157
158
48.BellantuonoCorporationisdevelopingdirectlaborstandards.Thebasicdirectlaborwagerateis
$11.00perhour.Employmenttaxesare9%ofthebasicwagerate.Fringebenefitsare$3.18perdirect
laborhour.Thestandardrateperdirectlaborhourshouldbe:
A)$15.17
B)$11.00
C)$6.83
D)$4.17
Level:EasyLO:1Ans:A
49.HillestadCorporationisdevelopingdirectlaborstandards.Aparticularproductrequires0.72direct
laborhoursperunit.Theallowanceforbreaksandpersonalneedsis0.07directlaborhoursperunit.The
allowanceforcleanup,machinedowntime,andrejectsis0.09directlaborhoursperunit.Thestandard
directlaborhoursperunitshouldbe:
A)0.88
B)0.56
C)0.72
D)0.65
Level:EasyLO:1Ans:A
50.(Appendix)BarbuCorporationhasprovidedthefollowingdataconcerningitsdirectlaborcostsfor
June:
TheLaborRateVarianceforJunewouldberecordedasa:
A)creditof$6,305.
B)creditof$6,500.
C)debitof$6,305.
D)debitof$6,500.
Level:EasyLO:3,7Ans:A
51.(Appendix)GainerCorporationsstandardwagerateis$11.70perdirectlaborhour(DLH)and
accordingtothestandards,eachunitofoutputrequires3.9DLHs.InFebruary,7,800unitswere
produced,theactualwageratewas$12.50perDLH,andtheactualhourswere29,940DLHs.TheLabor
RateVarianceforFebruarywouldberecordedasa:
A)debitof$23,952.
B)creditof$23,952.
C)creditof$24,336.
D)debitof$24,336.
Level:EasyLO:3,7Ans:A
159
160
52.(Appendix)MiolenCorporationhasprovidedthefollowingdataconcerningitsdirectlaborcostsfor
June:
TheLaborEfficiencyVarianceforJunewouldberecordedasa:
A)creditof$50,128.
B)debitof$46,272.
C)debitof$50,128.
D)creditof$46,272.
Level:EasyLO:3,7Ans:C
53.(Appendix)LiukkoCorporationsstandardwagerateis$14.90perdirectlaborhour(DLH)and
accordingtothestandards,eachunitofoutputrequires2.8DLHs.InJune,1,800unitswereproduced,the
actualwageratewas$15.80perDLH,andtheactualhourswere5,110DLHs.TheLaborEfficiency
VarianceforJunewouldberecordedasa:
A)debitof$1,106.
B)creditof$1,106.
C)creditof$1,043.
D)debitof$1,043.
Level:EasyLO:3,7Ans:D
54.(Appendix)MarusarzCorporationhasprovidedthefollowingdataconcerningitsmostimportantraw
material,compoundF55M:
Whenrecordingthepurchaseofmaterials,RawMaterialswouldbe:
A)creditedfor$74,120.
B)debitedfor$73,270.
C)debitedfor$74,120.
D)creditedfor$73,270.
Level:EasyLO:7Ans:C
161
55.(Appendix)SlifeCorporationhasprovidedthefollowingdataconcerningitsmostimportantraw
material,compoundG81N:
Whenrecordingtheuseofmaterialsinproduction,RawMaterialswouldbe:
A)debitedfor$68,558.
B)creditedfor$83,839.
C)creditedfor$68,558.
D)debitedfor$83,839.
Level:EasyLO:7Ans:C
56.(Appendix)CompoundB73GisusedtomakeVasconcellosCorporationsmajorproduct.The
standardcostofB73Gis$27.60perounceandthestandardquantityis8.6ouncesperunitofoutput.In
themostrecentmonth,3,200ouncesoftherawmaterialwerepurchasedatacostof$26.70perounce.
Whenrecordingthepurchaseofmaterials,RawMaterialswouldbe:
A)debitedfor$88,320.
B)debitedfor$85,440.
D)creditedfor$88,320.
Level:EasyLO:7Ans:A
57.(Appendix)CompoundK72RisusedtomakeMunuzCorporationsmajorproduct.Thestandardcost
ofcompoundK72Ris$43.90perounceandthestandardquantityis1.4ouncesperunitofoutput.Inthe
mostrecentmonth,120ouncesofthecompoundwereusedtomake100unitsoftheoutput.When
recordingtheuseofmaterialsinproduction,RawMaterialswouldbe:
A)debitedfor$5,268.
B)creditedfor$6,146.
D)debitedfor$6,146.
Level:EasyLO:7Ans:C
58.(Appendix)DataconcerningthedirectlaborcostsforMarchofBolerCorporationappearbelow:
ThejournalentrytorecordtheincurrenceofdirectlaborcostsinMarchwouldincludethefollowingfor
WorkinProcess:
A)creditof$125,139.
B)debitof$114,948.
C)creditof$114,948.
162
D)debitof$125,139.
Level:EasyLO:7Ans:B
163
59.(Appendix)GramajoCorporationsstandardwagerateis$10.10perdirectlaborhour(DLH)and
accordingtothestandards,eachunitofoutputrequires3.4DLHs.InFebruary,2,400unitswere
produced,theactualwageratewas$9.40perDLH,andtheactualhourswere7,920DLHs.Inthejournal
entrytorecordtheincurrenceofdirectlaborcostsinFebruary,theWorkinProcessentrywouldconsist
ofa:
A)creditof$74,448.
B)debitof$74,448.
C)debitof$82,416.
D)creditof$82,416.
Level:EasyLO:7Ans:C
Usethefollowinginformationtoanswer6062
StenchFoodsCompanyusesastandardcostsystemtocollectcostsrelatedtotheproductionofitsgarlic
flavoredyogurt.Thegarlic(materials)standardsforeachcontainerofyogurtproducedare0.8ouncesof
crushedgarlicatastandardcostof$2.30perounce.
DuringthemonthofJune,Stenchpurchased75,000ouncesofcrushedgarlicatatotalcostof$171,000.
Stenchused64,000oftheseouncestoproduce71,500containersofyogurt.
60.WhatisStenchsmaterialspricevarianceforthemonthofJune?
A)$1,500favorable
B)$15,640unfavorable
C)$17,250favorable
D)$23,800favorable
61.WhatisStenchsmaterialsquantityvarianceforthemonthofJune?
A)$1,500favorable
C)$17,250favorable
D)$23,800favorable
62.Assumethatittakes15minutesoflabortimetocrushenoughgarlictofillonecontainerofyogurt.
Becausethesmellofthegarliccanbeunbearable,workersaregiven(andtheytakeit!)10minutesof
breaktimeeveryhour(i.e.,50minutesofwork,10minutesofbreak).HowmanyminutesshouldStench
useasastandardquantityoflabortimepercontainerofyogurt?
A)18.0
B)16.2
C)17.0
D)17.5
164
HolidayChemicalCompanyusesastandardcostsystemtocollectcostsrelatedtotheproductionofits
bowlingballfruitcakes.Thedirectlaborstandardforeachfruitcakeis1.25hoursatastandardcostof
$11.00perhour.DuringthemonthofNovember,Holidaysfruitcakeproductionused9,820directlabor
hoursatatotaldirectlaborcostof$106,547.Thisresultedinproductionof8,500fruitcakesfor
November.
63.WhatisHolidayslaborratevarianceforNovember?
A)$8,855favorable
B)$1,473favorable
C)$13,047unfavorable
D)$14,520unfavorable
64.WhatisHolidayslaborefficiencyvarianceforNovember?
A)$8,855favorable
B)$10,328favorable
65.Assumethat7ouncesofpecansareincludedineachbowlingballfruitcake.BecauseHolidaywants
onlythebestpecansinitsfruitcakes,thepecanstheybuyareinspectedandsomearediscardedas
unacceptableforfruitcakeproduction.Thelossrateisexpectedtobe1ounceofpecansforevery5
ouncesinspected.Undertraditionalstandardcosting,howmanyouncesofpecansshouldHolidayuseasa
standardquantityperfruitcake?
A)7.20
B)7.80
C)8.40
D)8.75
DebitDaveandhisfourteachingassistantsgradeall1,000oftheirmanagerialaccountingexamsasa
group.Theaveragenumberofexamsgradedperhourbyeachpersonisasfollows:
DebitDaveisconsideringtheaboveinformationinsettingastandardforgradingthenextexamination.
165
66.Whichamountabovebestrepresentsapracticalstandard?
A)45
B)32
C)25
D)20
Level:EasyLO:1Ans:B
67.Whichamountabovebestrepresentsanidealstandard?
A)45
B)32
C)25
D)20
Level:EasyLO:1Ans:A
Pardoe,Inc.,manufacturesasingleproductinwhichvariablemanufacturingoverheadisassignedonthe
basisofdirectlaborhours.Thecompanyusesastandardcostsystemandhasestablishedthefollowing
standardsforoneunitofproduct:
DuringMarch,thefollowingactivitywasrecordedbythecompany:
68.ThematerialspricevarianceforMarchis:
A)$1,000F
B)$1,000U
C)$750F
D)$750U
166
69.ThematerialsquantityvarianceforMarchis:
A)$4,500F
B)$10,500F
C)$10,500U
D)$4,500U
70.ThelaborratevarianceforMarchis:
A)$480U
B)$800U
C)$480F
D)$800F
Level:EasyLO:3Ans:B
71.ThelaborefficiencyvarianceforMarchis:
A)$5,040U
B)$1,200U
C)$1,200F
D)$5,040F
Level:EasyLO:3Ans:C
72.ThevariableoverheadspendingvarianceforMarchis:
A)$200U
B)$600U
C)$600F
D)$200F
Level:EasyLO:4Ans:D
73.ThevariableoverheadefficiencyvarianceforMarchis:
A)$1,050F
B)$1,050U
C)$250F
D)$250U
Level:EasyLO:4Ans:C
167
ThefollowingdatapertaintoNellCompanysoperationsforJune:
Thematerialspricevarianceisrecognizedwhenmaterialsarepurchased.
74.NellsmaterialspricevarianceforJunewas:
A)$3,000favorable
B)$3,000unfavorable
C)$2,000favorable
D)$2,000unfavorable
Source:CMA,adapted
75.NellslaborefficiencyvarianceforJunewas:
A)$780favorable
B)$780unfavorable
C)$700favorable
D)$700unfavorable
Source:CMA,adapted
TheCollinsCompanyusesstandardcostingandhasestablishedthefollowingdirectmaterialanddirect
laborstandardsforeachunitofthesingleproductitmakes:
DuringJuly,thecompanymade6,000unitsofproductandincurredthefollowingcosts:
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169
76.ThematerialpricevarianceforJulywas:
A)$5,360favorable
B)$5,360unfavorable
C)$5,040favorable
D)$5,040unfavorable
Level:EasyLO:2Ans:B
77.ThematerialsquantityvarianceforJulywas:
A)$22,960unfavorable
C)$9,600unfavorable
D)$9,840unfavorable
Level:EasyLO:2Ans:C
78.ThelaborratevarianceforJulywas:
A)$3,920unfavorable
B)$6,120unfavorable
C)$1,120favorable
D)$3,920favorable
Level:EasyLO:3Ans:D
79.ThelaborefficiencyvarianceforJulywas:
A)$6,400favorable
B)$89,600favorable
C)$10,320favorable
D)$6,120favorable
Level:EasyLO:3Ans:A
JacksonIndustriesemploysastandardcostsysteminwhichdirectmaterialsinventoryiscarriedat
standardcost.Jacksonhasestablishedthefollowingstandardsforoneunitofproduct.
DuringMay,Jacksonpurchased125,000poundsofdirectmaterialatatotalcostof$475,000.Thetotal
factorywagesforMaywere$364,000,90percentofwhichwerefordirectlabor.Jacksonmanufactured
22,000unitsofproductduringMayusing108,000poundsofdirectmaterialand28,000directlabor
hours.
170
80.ThepricevarianceforthedirectmaterialacquiredbyJacksonIndustriesduringMayis:
A)$21,600favorable
C)$28,000favorable
Source:CMA,adapted
Level:EasyLO:2Ans:B
81.ThedirectmaterialquantityvarianceforMayis:
A)$7,200unfavorable
B)$7,600favorable
C)$5,850unfavorable
D)$7,200favorable
Source:CMA,adapted
Level:EasyLO:2Ans:D
82.ThedirectlaborratevarianceforMayis:
A)$8,400favorable
B)$7,200unfavorable
C)$8,400unfavorable
D)$6,000favorable
Source:CMA,adapted
83.ThedirectlaborefficiencyvarianceforMayis:
A)$5,850favorable
B)$7,200favorable
C)$6,000unfavorable
D)$5,850unfavorable
Source:CMA,adapted
Level:EasyLO:3Ans:C
ArrowIndustriesemploysastandardcostsysteminwhichdirectmaterialsinventoryiscarriedatstandard
cost.Arrowhasestablishedthefollowingstandardsforoneunitofproduct.
DuringNovember,Arrowpurchased160,000poundsofdirectmaterialatatotalcostof$304,000.The
totalfactorywagesforNovemberwere$42,000,90percentofwhichwerefordirectlabor.Arrow
171
manufactured19,000unitsofproductduringNovemberusing142,500poundsofdirectmaterialand
5,000directlaborhours.
172
84.ThedirectmaterialpricevarianceforNovemberis:
A)$16,000favorable
C)$14,250favorable
Source:CMA,adapted
Level:EasyLO:2Ans:B
85.ThedirectmaterialquantityvarianceforNovemberis:
A)$14,400unfavorable
B)$1,100favorable
D)$17,100favorable
Source:CMA,adapted
Level:EasyLO:2Ans:D
86.ThedirectlaborratevarianceforNovemberis:
A)$2,200favorable
B)$1,900unfavorable
C)$2,000unfavorable
D)$2,090favorable
Source:CMA,adapted
87.ThedirectlaborefficiencyvarianceforNovemberis:
A)$2,200favorable
B)$2,000favorable
C)$2,000unfavorable
D)$1,800unfavorable
Source:CMA,adapted
Level:EasyLO:3Ans:C
TheDresdenCompanyusesstandardcostingforthesingleproductthecompanymakesandsells.The
followingdataareforthemonthofApril:
Actualcostofdirectmaterialpurchasedandused:$62,400
Materialpricevariance:$4,800unfavorable
Totalmaterialsvariance:$14,400unfavorable
Standardcostperpoundofmaterial:$6
Standardcostperdirectlaborhour:$8
Actualdirectlaborhours:3,800hours
Laborefficiencyvariance:$1,600favorable
Standardnumberofdirectlaborhourperunitofproduct:2
173
Totallaborvariance:$680unfavorable
174
88.ThetotalnumberofunitsproducedduringAprilwas:
A)8,000
B)12,000
C)2,000
D)3,800
Level:HardLO:2Ans:C
89.Thestandardquantityofmaterialallowedtoproduceoneunitofproductwas:
A)1pound
B)4pounds
C)6pounds
D)2pounds
Level:HardLO:2Ans:B
90.Theactualmaterialcostperpoundwas:
A)$6.50
B)$6.00
C)$5.00
D)$7.20
Level:HardLO:2Ans:A
91.Theactualdirectlaborrateperhourwas:
A)$16.00
B)$6.50
C)$8.00
D)$8.60
Level:HardLO:3Ans:D
92.Thelaborratevariancewas:
A)$2,280favorable
B)$2,280unfavorable
C)$920favorable
D)$920unfavorable
Level:HardLO:3Ans:B
175
Thefollowingmaterialsstandardshavebeenestablishedforaparticularproduct:
93.Whatisthematerialspricevarianceforthemonth?
A)$650F
B)$550U
C)$550F
D)$650U
Level:EasyLO:2Ans:A
94.Whatisthematerialsquantityvarianceforthemonth?
A)$5,820U
B)$24,272F
C)$5,920U
D)$23,862F
Level:EasyLO:2Ans:B
Blaster,Inc.,manufacturesportableradios.Eachradiorequires3unitsofPartXBEZ52,whichhasa
standardcostof$1.45perunit.DuringMay,thecompanypurchased12,000unitsofthepartforatotalof
$18,000.AlsoduringMay,thecompanymanufactured3,000radios,using10,000unitsofpartXBEZ52.
95.DuringMay,thematerialspricevarianceforpartXBEZ52was:
A)$450U
B)$450F
C)$600F
D)$600U
Level:EasyLO:2Ans:D
96.DuringMay,thematerialsquantityvarianceforpartXBEZ52was:
A)$1,450U
B)$1,450F
C)$4,350F
176
D)$4,350U
Level:EasyLO:2Ans:A
177
Thefollowinglaborstandardshavebeenestablishedforaparticularproduct:
97.Whatisthelaborratevarianceforthemonth?
A)$490F
B)$60F
C)$60U
D)$490U
Level:EasyLO:3Ans:A
98.Whatisthelaborefficiencyvarianceforthemonth?
A)$8,680U
B)$8,708U
C)$8,218F
D)$8,218U
Level:EasyLO:3Ans:B
Aproductsstandardcostcardspecifiesthataunitoftheproductrequires4directlaborhours.During
September,3,350unitsweremade,whichwas150unitslessthanbudgeted.Thetotalbudgeteddirect
laborcostforSeptemberwas$117,600.ThedirectlaborcostincurredduringSeptemberwas$111,850
and13,450directlaborhourswereworked.
99.Thedirectlaborratevarianceforthemonthwas:
A)$5,750F
B)$5,750U
C)$1,130F
D)$1,130U
Level:HardLO:3Ans:C
100.Thedirectlaborefficiencyvarianceforthemonthwas:
A)$420.00U
B)$420.00F
C)$415.80U
178
D)$415.80F
Level:HardLO:3Ans:A
179
Thefollowingstandardsforvariablemanufacturingoverheadhavebeenestablishedforacompanythat
makesonlyoneproduct:
101.Whatisthevariableoverheadspendingvarianceforthemonth?
A)$3,344F
B)$720U
C)$3,344U
D)$720F
Level:EasyLO:4Ans:D
102.Whatisthevariableoverheadefficiencyvarianceforthemonth?
A)$576U
B)$4,064U
C)$3,920U
D)$3,920F
Level:EasyLO:4Ans:B
TheMaxwellCompanyhasastandardcostingsysteminwhichvariablemanufacturingoverheadis
assignedtoproductiononthebasisofmachinehours.ThefollowingdataareavailableforJuly:
Actualvariablemanufacturingoverheadcostincurred:$22,620
Actualmachinehoursworked:1,600
Variableoverheadspendingvariance:$3,420unfavorable
Totalvariableoverheadvariance:$4,620unfavorable
103.ThevariableoverheadefficiencyvarianceforJulyis:
A)$8,040unfavorable
B)$8,040favorable
C)$1,200unfavorable
D)$1,200favorable
180
104.ThestandardnumberofmachinehoursallowedforJulyproductionis:
A)1,500hours
B)1,600hours
C)1,700hours
D)2,270hours
Level:HardLO:4Ans:A
VermeillenCorporationusesastandardcostingsysteminwhichvariablemanufacturingoverheadis
assignedtoproductiononthebasisofthenumberofmachinesetups.Thefollowingdatapertaintoone
monthsoperations:
Variablemanufacturingoverheadcostincurred:$70,000
Totalvariableoverheadvariance:$4,550favorable
Standardmachinesetupsallowedforactualproduction:3,550
Actualmachinesetupsincurred:3,500
105.Thestandardvariableoverheadratepermachinesetupis:
A)$20.00
B)$21.30
C)$18.44
D)$21.00
Level:HardLO:4Ans:D
106.Thevariableoverheadspendingvarianceis:
A)$1,000favorable
B)$1,000unfavorable
C)$3,500unfavorable
D)$3,500favorable
Level:HardLO:4Ans:D
WolkCorporationisdevelopingstandardsforitsproducts.Oneproductrequiresaninputthatis
Receivingcostsare$0.55perkilogram.Eachunitofoutputoftheproductrequires0.73kilogramofthis
input.Theallowanceforwasteandspoilageis0.02kilogramofthisinputforeachunitofoutput.The
allowanceforrejectsis0.14kilogramofthisinputforeachunitofoutput.
107.Thestandardpriceperkilogramofthisinputshouldbe:
A)$64.63
B)$76.81
C)$68.00
181
D)$71.37
Level:EasyLO:1Ans:D
182
108.Thestandardquantityinkilogramsofthisinputperunitofoutputshouldbe:
A)0.71
B)0.89
C)0.57
D)0.73
Level:EasyLO:1Ans:B
OienCorporationisdevelopingdirectlaborstandards.Thebasicdirectlaborwagerateis$14.00per
hour.Employmenttaxesare9%ofthebasicwagerate.Fringebenefitsare$3.28perdirectlaborhour.A
particularproductrequires0.98directlaborhoursperunit.Theallowanceforbreaksandpersonalneeds
is0.02directlaborhoursperunit.Theallowanceforcleanup,machinedowntime,andrejectsis0.12
directlaborhoursperunit.
109.Thestandardrateperdirectlaborhourshouldbe:
A)$18.54
B)$4.54
C)$14.00
D)$9.46
Level:EasyLO:1Ans:A
110.Thestandarddirectlaborhoursperunitshouldbe:
A)0.84
B)1.12
C)0.96
D)0.98
Level:EasyLO:1Ans:B
(Appendix)FloreaCorporationhasprovidedthefollowingdataconcerningitsmostimportantraw
material,compoundK09B:
Therawmaterialwaspurchasedonaccount.
183
111.ThedebitstotheRawMaterialsaccountforAugustwouldtotal:
A)$39,750
B)$15,900
C)$14,840
D)$40,050
112.ThecreditstotheRawMaterialsaccountforAugustwouldtotal:
A)$40,050
B)$14,840
C)$39,750
D)$15,900
113.TheMaterialsPriceVarianceforAugustwouldberecordedasa:
A)Creditof$112
B)Creditof$300
C)Debitof$112
D)Debitof$300
114.TheMaterialsQuantityVarianceforAugustwouldberecordedasa:
A)Creditof$24,910
B)Creditof$1,060
C)Debitof$1,060
D)Debitof$24,910
(Appendix)CompoundK52EisarawmaterialusedtomakePinkosCorporationsmajorproduct.The
standardcostofcompoundK52Eis$46.00perounceandthestandardquantityis5.0ouncesperunitof
output.DataconcerningthecompoundforMarchappearbelow:
184
115.ThedebitstotheRawMaterialsaccountforMarchwouldtotal:
A)$170,200
B)$172,420
C)$184,000
D)$164,220
116.ThecreditstotheRawMaterialsaccountforMarchwouldtotal:
A)$172,420
B)$184,000
C)$170,200
D)$164,220
117.TheMaterialsPriceVarianceforMarchwouldberecordedasa:
A)Debitof$2,220
B)Debitof$2,142
C)Creditof$2,220
D)Creditof$2,142
118.TheMaterialsQuantityVarianceforMarchwouldberecordedasa:
A)Creditof$19,780
B)Creditof$5,980
C)Debitof$19,780
D)Debitof$5,980
(Appendix)CaffertyCorporationhasprovidedthefollowingdataconcerningitsdirectlaborcostsfor
March:
119.ThejournalentrytorecordtheincurrenceofdirectlaborcostsinMarchwouldincludethefollowing
forWorkinProcess:
A)Creditof$33,280
B)Debitof$35,625
C)Debitof$33,280
185
D)Creditof$35,625
186
120.TheLaborRateVarianceforMarchwouldberecordedasa:
A)Creditof$855
B)Creditof$780
C)Debitof$780
D)Debitof$855
121.TheLaborEfficiencyVarianceforMarchwouldberecordedasa:
A)Debitof$3,200
B)Creditof$3,125
C)Creditof$3,200
D)Debitof$3,125
(Appendix)EnwallCorporationsstandardwagerateis$11.20perdirectlaborhour(DLH)and
accordingtothestandards,eachunitofoutputrequires2.9DLHs.InDecember,5,900unitswere
produced,theactualwageratewas$10.20perDLH,andtheactualhourswere14,150DLHs.
122.InthejournalentrytorecordtheincurrenceofdirectlaborcostsinDecember,theWorkinProcess
entrywouldconsistofa:
A)creditof$144,330.
B)debitof$191,632.
C)debitof$144,330.
D)creditof$191,632.
123.TheLaborRateVarianceforDecemberwouldberecordedasa:
A)debitof$14,150.
B)creditof$17,110.
C)debitof$17,110.
D)creditof$14,150.
124.TheLaborEfficiencyVarianceforDecemberwouldberecordedasa:
A)debitof$33,152.
B)creditof$30,192.
C)creditof$33,152.
D)debitof$30,192.
187
Essay
125.(Appendix)Thefollowingstandardshavebeenestablishedforarawmaterialusedintheproduction
ofproductG13:
Thefollowingdatapertaintoarecentmonthsoperations:
Required:
(a.)Whatisthematerialspricevarianceforthemonth?
(b.)Whatisthematerialsquantityvarianceforthemonth?
(c.)Preparejournalentriestorecordthepurchaseanduseoftherawmaterialduringthemonth.(Allraw
materialsarepurchasedonaccount.)
Level:MediumLO:2,7
Ans:
(a.)Materialspricevariance=(AQAP)(AQSP)
=$100,725(5,100$19.00)=$3,825U
(b.)Materialsquantityvariance=SP(AQSQ*)
=$19.00(4,7004,692)=$152U
*SQ=StandardquantityperunitActualoutput
=2.32,040=4,692
(c.)Journalentriestorecordthepurchaseanduseoftherawmaterial:
Recordthepurchaseoftherawmaterial:
Recordtheuseoftherawmaterial:
188
126.(Appendix)ThestandardsforproductF28callfor2.7poundsofarawmaterialthatcosts$16.50per
pound.Lastmonth,4,100poundsoftherawmaterialwerepurchasedfor$70,520.Theactualoutputof
themonthwas1,300unitsofproductF28.Atotalof3,500poundsoftherawmaterialwereusedto
producethisoutput.
Required:
(c.)Preparejournalentriestorecordthepurchaseanduseoftherawmaterialduringthemonth.(Allraw
materialsarepurchasedonaccount.)
Level:MediumLO:2,7
Ans:
=$70,520(4,100$16.50)=$2,870U
=$16.50(3,5003,510)=$165F
=2.71,300=3,510
(c.)Journalentriestorecordthepurchaseanduseoftherawmaterial:
Recordthepurchaseoftherawmaterial:
Recordtheuseoftherawmaterial:
127.Thefollowingmaterialsstandardshavebeenestablishedforaparticularproduct:
Required:
189
Level:EasyLO:2
190
Ans:
Materialspricevariance=(AQAP)(AQSP)
=$86,880(4,800$18.90)=$3,840F
SQ=StandardquantityperunitActualoutput
=0.221,080=4,216
Materialsquantityvariance=SP(AQSQ)
=$18.90(4,2004,216)=$302F
128.ThefollowingstandardshavebeenestablishedforarawmaterialusedtomakeproductI92:
Thefollowingdatapertaintoarecentmonthsoperations:
Required:
Level:EasyLO:2
Ans:
=$26,200(2,000$13.90)=$1,600F
=$13.90(1,300990)=$4,309U
=4.5220=990
129.ThestandardsforproductK17callfor5.0metersofarawmaterialthatcosts$19.10permeter.Last
month,2,700metersoftherawmaterialwerepurchasedfor$51,435.Theactualoutputofthemonthwas
460unitsofproductK17.Atotalof2,500metersoftherawmaterialwereusedtoproducethisoutput.
Required:
Level:EasyLO:2
Ans:
=$51,435(2,700$19.10)=$135F
=$19.10(2,5002,300)=$3,820U
=5.0460=2,300
191
192
130.(Appendix)ThefollowingdirectlaborstandardshavebeenestablishedforproductN30A:
Thefollowingdatapertaintothemostrecentmonthsoperationsduringwhich400unitsofproduct
N30Aweremade:
Required:
(a.)Whatwasthelaborratevarianceforthemonth?
(b.)Whatwasthelaborefficiencyvarianceforthemonth?
(c.)Prepareajournalentrytorecorddirectlaborcostsduringthemonth,includingthedirectlabor
variances.
Level:MediumLO:3,7
Ans:
(a.)Laborratevariance=(AHAR)(AHSR)
=$11,385(1,100$10.50)=$165F
(b.)Laborefficiencyvariance=SR(AHSH*)
=$10.50(1,1001,320)=$2,310F
*SH=StandardhoursperunitActualoutput
=3.3400=1,320
(c.)Journalentriestorecordthedirectlaborcosts:
131.(Appendix)ThestandardsforproductQ58Wspecify8.4directlaborhoursperunitat$14.00per
directlaborhour.Lastmonth400unitsofproductQ58Wwereproducedusing2,800directlaborhoursat
atotaldirectlaborwagecostof$41,020.
Required:
(c.)Prepareajournalentrytorecorddirectlaborcostsduringthemonth,includingthedirectlabor
variances.
Level:MediumLO:3,7
Ans:
=$41,020(2,800$14.00)=$1,820U
=$14.00(2,8003,360)=$7,840F
=8.4400=3,360
193
(c.)Journalentriestorecordthedirectlaborcosts:
Required:
(a.)Whatisthelaborratevarianceforthemonth?
(b.)Whatisthelaborefficiencyvarianceforthemonth?
Level:EasyLO:3
Ans:
Laborratevariance=(AHAR)(AHSR)
=$105,050(5,500$19.10)=$0U
SH=StandardhoursperunitActualoutput
=3.21,900=6,080
Laborefficiencyvariance=SR(AHSH)
=$19.10(5,5006,080)=$11,078F
133.ThefollowingdirectlaborstandardshavebeenestablishedforproductS57S:
Thefollowingdatapertaintolastmonthsoperations:
Required:
Level:EasyLO:3
194
Ans:
=$14,800(1,000$14.70)=$100U
=$14.70(1,0001,080)=$1,176F
=1.5720=1,080
134.ThestandardsforproductF88Wspecify3.4directlaborhoursperunitat$13.00perdirectlabor
hour.Lastmonth800unitsofproductF88Wwereproducedusing2,500directlaborhoursatatotal
directlaborwagecostof$30,500.
Required:
Level:EasyLO:3
Ans:
=$30,500(2,500$13.00)
=$2,000F
=$13.00(2,5002,720)
=$2,860F
=3.4800=2,720
Required:
(a.)Whatisthevariableoverheadspendingvarianceforthemonth?
(b.)Whatisthevariableoverheadefficiencyvarianceforthemonth?
Level:EasyLO:4
Ans:
Variableoverheadspendingvariance=(AHAR)(AHSR)
=$110,670(6,200$17.55)=$1,860U
SH=StandardhoursperunitActualoutput
=0.610,200=6,120
195
Variableoverheadefficiencyvariance=SR(AHSH)
=$17.55(6,2006,120)=$1,404U
196
136.DeschampCorporationsvariablemanufacturingoverheadisappliedonthebasisofdirectlabor
hours.Thecompanyhasestablishedthefollowingvariablemanufacturingoverheadstandardsforproduct
O28H:
Thefollowingdatapertaintothemostrecentmonthsoperationsduringwhich2,160unitsofproduct
O28Hweremade:
Required:
(a.)Whatwasthevariableoverheadspendingvarianceforthemonth?
(b.)Whatwasthevariableoverheadefficiencyvarianceforthemonth?
Level:EasyLO:4
Ans:
(a.)Variableoverheadspendingvariance=(AHAR)(AHSR)
=$44,980(5,200$7.70)=$4,940U
(b.)Variableoverheadefficiencyvariance=SR(AHSH*)
=$7.70(5,2005,400)=$1,540F
=2.52,160=5,400
137.ShawlCorporationsvariablemanufacturingoverheadisappliedonthebasisofdirectlaborhours.
ThestandardcostcardforproductF02Especifies5.5directlaborhoursperunitofF02E.Thestandard
variablemanufacturingoverheadrateis$6.80perdirectlaborhour.Duringthemostrecentmonth,1,560
unitsofproductF02Eweremadeand8,700directlaborhourswereworked.
Theactualvariablemanufacturingoverheadincurredwas$52,635.
Required:
(a.)Whatwasthevariableoverheadspendingvarianceforthemonth?
(b.)Whatwasthevariableoverheadefficiencyvarianceforthemonth?
Level:EasyLO:4
Ans:
(a.)Variableoverheadspendingvariance=(AHAR)(AHSR)
=$52,635(8,700$6.80)=$6,525F
(b.)Variableoverheadefficiencyvariance=SR(AHSH*)
=$6.80(8,7008,580)=$816U
=5.51,560=8,580
197
138.SarneCorporationisdevelopingstandardsforitsproducts.Oneproductrequiresaninputthatis
Receivingcostsare$0.88perkilogram.Eachunitofoutputrequires0.40kilogramofthisinput.The
allowanceforwasteandspoilageis0.06kilogramofthisinputforeachunitofoutput.Theallowancefor
rejectsis0.12kilogramofthisinputforeachunitofoutput.
Required:
(a.)Determinethestandardpriceperkilogramofthisinput.Showyourwork!
(b.)Determinethestandardkilogramsofthisinputperunitofoutput.Showyourwork!
Level:EasyLO:1
Ans:
139.LondonCorporationisdevelopingstandardsforitsproducts.Oneproductrequiresaninputthatis
Receivingcostsare$0.82perkilogram.
Required:
Determinethestandardpriceperkilogramofthisinput.Showyourwork!
Level:EasyLO:1
Ans:
140.SarkisianCorporationisdevelopingstandardsforaproduct.Eachunitofoutputoftheproduct
requires0.52kilogramofaparticularinput.Theallowanceforwasteandspoilageis0.06kilogramofthis
inputforeachunitofoutput.Theallowanceforrejectsis0.13kilogramofthisinputforeachunitof
output.
198
Required:
Determinethestandardkilogramsofthisinputperunitofoutput.Showyourwork!
199
Level:EasyLO:1
Ans:
141.FinnertyCorporationisdevelopingdirectlaborstandards.Thebasicdirectlaborwagerateis$13.00
perhour.Employmenttaxesare10%ofthebasicwagerate.Fringebenefitsare$4.33perhour.A
particularproductrequires0.69directlaborhoursperunit.Theallowanceforbreaksandpersonalneeds
is0.04directlaborhoursperunit.Theallowanceforcleanup,machinedowntime,andrejectsis0.14
directlaborhoursperunit.
Required:
(a.)Determinethestandardrateperdirectlaborhour.Showyourwork!
(b.)Determinethestandarddirectlaborhoursperunitofproduct.Showyourwork!
(c.)Determinethestandardlaborcostperunitofproducttothenearestcent.Showyourwork!
Level:EasyLO:1
Ans:
142.BarbozaCorporationisdevelopingdirectlaborstandards.Thebasicdirectlaborwagerateis$10.30
perhour.Employmenttaxesare10%ofthebasicwagerate.Fringebenefitsare$3.39perhour.
Required:
Determinethestandardrateperdirectlaborhour.Showyourwork!
Level:EasyLO:1
200
Ans:
143.MouwCorporationisdevelopingdirectlaborstandards.Aparticularproductrequires0.66direct
laborhoursperunit.Theallowanceforbreaksandpersonalneedsis0.02directlaborhoursperunit.The
allowanceforcleanup,machinedowntime,andrejectsis0.10directlaborhoursperunit.
Required:
Determinethestandarddirectlaborhoursperunitofproduct.Showyourwork!
Level:EasyLO:1
Ans:
144.(Appendix)UngvarskyCorporationhasprovidedthefollowingdataconcerningitsmostimportant
rawmaterial,compoundJ38F:
Required:
(a.)Recordthepurchaseoftherawmaterialinajournalentry.
(b.)Recordtheuseoftherawmaterialinproductioninajournalentry.
Level:EasyLO:2,7
Ans:
(a.)Entrytorecordpurchaseofmaterials:
201
(b.)Entrytorecorduseofmaterials:
Standardquantityallowedfortheactualoutput(300unitsat4.9litersperunit)=1,470
145.(Appendix)CompoundC65ZisusedbySinkeyCorporationtomakeoneofitsproducts.The
standardcostofcompoundC65Zis$21.10perounceandthestandardquantityis2.0perunitofoutput.
Dataconcerningthecompoundinthemostrecentmonthappearbelow:
Required:
(a.)Recordthepurchaseoftherawmaterialinajournalentry.
(b.)Recordtheuseoftherawmaterialinproductioninajournalentry.
Level:EasyLO:2,7
Ans:
(a.)Entrytorecordpurchaseofmaterials:
(b.)Entrytorecorduseofmaterials:
Standardquantityallowedfortheactualoutput(200unitsat2.0ouncesperunit)=400
202
146.(Appendix)PinkneyCorporationhasprovidedthefollowingdataconcerningitsdirectlaborcostsfor
November:
Required:
Preparethejournalentrytorecordtheincurrenceofdirectlaborcosts.
Level:EasyLO:3,7
Ans:
Standardquantityallowedfortheactualoutput(7,900unitsat5.3DLHsperunit)=41,870DLHs
147.(Appendix)ThedirectlaborstandardsatHebdenCorporationare$10.30perdirectlaborhour
(DLH)and3.4DLHsperunitofoutput.InDecember,7,800unitswereproduced,theactualwagerate
was$9.90perDLH,andtheactualhourswere21,340DLHs.
Required:
Preparethejournalentrytorecordtheincurrenceofdirectlaborcosts.
Level:EasyLO:3,7
Ans:
Standardquantityallowedfortheactualoutput(7800unitsat3.4DLHsperunit)=26,520DLHs
203

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