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(a) Standards are stated as a per unit amount. Thus, the standards are
materials $2.60 ($1,300,000 500,000) and labor $3.40 ($1,700,000
500,000).
(b) Budgets are stated as a total amount. Thus, the budgeted costs for the
year are materials $1,300,000 and labor $1,700,000.
(a) Standard direct materials price per gallon = $2.60 ($2.30 + $.20 + $.10).
(b) Standard direct materials quantity per gallon = 4 pounds (3.6 + .4).
(c) Standard materials cost per gallon = $10.40 ($2.60 X 4).
(a) Standard direct labor rate per hour = $15.00 ($13.00 + $.80 + $1.20).
(b) Standard direct labor hours per gallon = 1.5 hours (1.1 + .25 + .15).
(c) Standard labor cost per gallon = $22.50 ($15.00 X 1.5).
Copyright 2012 John Wiley & Sons, Inc. Weygandt, Managerial Accounting, 6/e, Solutions Manual (For Instructor Use Only) 11-7
BRIEF EXERCISE 11-6
*$25,500 3,000
11-8 Copyright 2012 John Wiley & Sons, Inc. Weygandt, Managerial Accounting, 6/e, Solutions Manual (For Instructor Use Only)
*BRIEF EXERCISE 11-10
DO IT! 11-1
DO IT! 11-2
*(16,000 X 2)
Copyright 2012 John Wiley & Sons, Inc. Weygandt, Managerial Accounting, 6/e, Solutions Manual (For Instructor Use Only) 11-9
DO IT! 11-3
*2,000 X 1.9
**3,800 hours X $22.00
DO IT! 11-4
11-10 Copyright 2012 John Wiley & Sons, Inc. Weygandt, Managerial Accounting, 6/e, Solutions Manual (For Instructor Use Only)
SOLUTIONS TO EXERCISES
EXERCISE 11-1
(c) The advantages of standard costs which are carefully established and
prudently used are:
1. Management planning is facilitated.
2. Greater economy is promoted by making employees more cost-
conscious.
3. Setting selling prices is facilitated.
4. Management control is enhanced by having a basis for evaluation
of cost control.
5. Variances are highlighted in management by exception.
6. Costing of inventories is simplified and clerical costs are reduced.
EXERCISE 11-2
Amount Standard
Per Standard Standard Standard Cost Per
Ingredient Gallon Waste Usage Price Gallon
Grape concentrate 60* oz. 4% (a) 62.5 oz. $.06 $3.75
Sugar (54 50) 1.08 lb. 10% (b) 1.20 lb. .30 .36
Lemons (60 50) 1.2 25% (c) 1.6 .60 .96
Yeast 1 tablet 0% 1 tablet .25 .25
Nutrient 1 tablet 0% 1 tablet .20 .20
Water (2,600 50) 52 oz. 0% 52 oz. .005 .26
$5.78
*3,000 50
(a) .96X = 60 ounces; or X = (60 ounces)/.96.
(b) .90X = 1.08 pounds; or X = (1.08 pounds)/.90.
(c) .75X = 1.2 lemons; or X = (1.2 lemons)/.75.
Copyright 2012 John Wiley & Sons, Inc. Weygandt, Managerial Accounting, 6/e, Solutions Manual (For Instructor Use Only) 11-11
EXERCISE 11-3
Direct materials
Cost per pound [$5 (2% X $5) + $0.25] $5.15
Pounds per unit (4.5 + 0.5) X 5 $25.75
Direct labor
Cost per hour ($12 + $3) $ 15
Hours per unit (2 + .3) X 2.3 34.50
Manufacturing overhead
2.3 hours X $7 16.10
Total standard cost per unit $76.35
EXERCISE 11-4
(c) Standard direct labor cost per oil change = 1.50 hours X $16.20 per hour
= $24.30
(d) Direct labor quantity variance = (1.60 hours X $16.20) (1.50 hours X $16.20)
= $25.92 $24.30
= $1.62 U
11-12 Copyright 2012 John Wiley & Sons, Inc. Weygandt, Managerial Accounting, 6/e, Solutions Manual (For Instructor Use Only)
EXERCISE 11-5
*9,500 X 3
Copyright 2012 John Wiley & Sons, Inc. Weygandt, Managerial Accounting, 6/e, Solutions Manual (For Instructor Use Only) 11-13
EXERCISE 11-6
*4.1 X 10,000
EXERCISE 11-7
11-14 Copyright 2012 John Wiley & Sons, Inc. Weygandt, Managerial Accounting, 6/e, Solutions Manual (For Instructor Use Only)
EXERCISE 11-7 (Continued)
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EXERCISE 11-7 (Continued)
(Not Required)
Total Variance
(1) (3)
$5,035 $4,700 = $335 U
Total Variance
(1) (3)
$8,260 $8,460 = $200 F
11-16 Copyright 2012 John Wiley & Sons, Inc. Weygandt, Managerial Accounting, 6/e, Solutions Manual (For Instructor Use Only)
EXERCISE 11-8
(a) Total materials variance:
( AQ X AP ) ( SQ X SP )
(1,220 X $128) (1,200 X $130)
$156,160 $156,000 = $160 U
Copyright 2012 John Wiley & Sons, Inc. Weygandt, Managerial Accounting, 6/e, Solutions Manual (For Instructor Use Only) 11-17
EXERCISE 11-9
(a) Number of units = Total standard cost Standard cost per unit
Number of units = $405,000 $20.00 (5 lb X $4 per lb) = 20,250
EXERCISE 11-10
11-18 Copyright 2012 John Wiley & Sons, Inc. Weygandt, Managerial Accounting, 6/e, Solutions Manual (For Instructor Use Only)
EXERCISE 11-11
EXERCISE 11-12
EXERCISE 11-13
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EXERCISE 11-14
(a)
PICARD LANDSCAPING
Variance Report Purchasing Department
For the Current Month
Actual (1) (2)
Pounds Actual Standard Price
Project Purchased Price Price Variance (a) Explanation
Remington 500 $2.40 $2.50 $50 F Purchased poor-quality seeds
Chang 400 2.30 2.50 80 F Seeds on sale
Wyco 550 2.60 2.50 55 U Price increased
Total price variance $75 F
(b)
PICARD LANDSCAPING
Variance Report Production Department
For the Current Month
Actual Standard Standard Quantity
Project Pounds Pounds Price Variance (b) Explanation
Remington 500 460 $2.50 $100 U Purchased poor-quality seeds
Chang 400 410 2.50 25 F Purchased higher-quality seeds
Wyco 550 480 2.50 175 U New employee
(b)
MQV = SP X (AQ SQ)
11-20 Copyright 2012 John Wiley & Sons, Inc. Weygandt, Managerial Accounting, 6/e, Solutions Manual (For Instructor Use Only)
EXERCISE 11-15
BURTE CORPORATION
Variance Report Purchasing Department
For Week Ended January 9, 2014
Type of Quantity Actual Standard Price
Materials Purchased Price Price Variance Explanation
Rogue 11 25,000 lbs. $5.20 $5.00 $5,000 U Price increase
Storm 17 7,000 oz. $3.45 $3.30 $1,050 U Rush order
Beast 29 22,000 units. $0.40 $0.42 $ 440 F Bought larger quantity
EXERCISE 11-16
FISK COMPANY
Income Statement
For the Month Ended January 31, 2014
Copyright 2012 John Wiley & Sons, Inc. Weygandt, Managerial Accounting, 6/e, Solutions Manual (For Instructor Use Only) 11-21
EXERCISE 11-17
2. Variance(a) The difference between total actual costs and total stan-
dard costs.
*EXERCISE 11-18
11-22 Copyright 2012 John Wiley & Sons, Inc. Weygandt, Managerial Accounting, 6/e, Solutions Manual (For Instructor Use Only)
*EXERCISE 11-18 (Continued)
*EXERCISE 11-19
*EXERCISE 11-20
*235 X 3
Copyright 2012 John Wiley & Sons, Inc. Weygandt, Managerial Accounting, 6/e, Solutions Manual (For Instructor Use Only) 11-23
*EXERCISE 11-21
11-24 Copyright 2012 John Wiley & Sons, Inc. Weygandt, Managerial Accounting, 6/e, Solutions Manual (For Instructor Use Only)
*EXERCISE 11-22
(a) 1. Overhead
Overhead Controllable
Total actual overhead cost = Budgeted + Variance
= $6 X (2,100* 2,000)
= $600 U
*$12,600 $6 per hour = 2,100 hours
Copyright 2012 John Wiley & Sons, Inc. Weygandt, Managerial Accounting, 6/e, Solutions Manual (For Instructor Use Only) 11-25
EXERCISE 11-23
11-26 Copyright 2012 John Wiley & Sons, Inc. Weygandt, Managerial Accounting, 6/e, Solutions Manual (For Instructor Use Only)
SOLUTIONS TO PROBLEMS
PROBLEM 11-1A
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PROBLEM 11-2A
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PROBLEM 11-2A (Continued)
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PROBLEM 11-3A
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PROBLEM 11-3A (Continued)
(c) The materials price variance is more than 4% from standard. The actual
price for materials of $4.15 is $.25 below the standard price of $4.40 or
5.7% ($.25 $4.40). The same result can be obtained by dividing the
total price variance by the total standard price for the quantities purchased
($22,625 $398,200).
The labor price variance is 5.2% from standard ($.70 $13.40). The
same result can be obtained by dividing the total price variance by the
total standard price for the direct labor hours used ($9,940 $190,280).
The labor quantity variance is 5.7% (760 13,440) from standard. The
same result can be obtained by dividing the total quantity variance by
the total standard price for the standard hours allowed ($10,184
$180,096).
Copyright 2012 John Wiley & Sons, Inc. Weygandt, Managerial Accounting, 6/e, Solutions Manual (For Instructor Use Only) 11-31