Accounting 1B Written Assignment Chapter 22 Standards Instructions: 1. 2. 3. 4.

Question

Accounting 1B Written Assignment Chapter 22 Standards Instructions: 1. 2. 3. 4. 5. Print this Document Write your name at the top Complete the assignment by hand Scan the completed assignments Submit the assignment though Canvas Show your calculations on the next page Standard costs and actual costs for direct materials, direct labor, and factory overhead incurred for the manufacture of 24,000 units of product were as follows. (Each unit requires 0.5 hours of direct labor at standard.) Actual Cost 9,800 Ibs. a Standard Cost Direct Materials 0,000 lbs. @ 15 16 Direct Labor 12,000 Hrs. @ 20 12,200 Hrs. @ 19 Factory Overhead Rates per direct labor hour based on 100% capacity of 12,500 labor hours Variable Cost Fixed Cost S 12.00 per DL Hr$140,000 total variable cost $ 7.50 per DL Hr$ 93,750 total fixed cost Instructions: Calculate the following variances. Show all work: (a) Direct Materials Quantity Variance (b) Direct Materials Price Variance (c) Direct Labor Time Variance (d) Direct Labor Rate Variance (e) Factory Overhead Controllable Variance (f) Factory Overhead Volume Variance Circle Fav. UnFav. Fav. UnFav. Fav. UnFav. Fav. UnFav. Fav. UnFav. Fav. UnFav. "Hint: For FOH use ACTUAL PRODUCTION at STANDARD USAGE M. Baker Page 1

Explanation / Answer

(a) Direct material quantity variance = Standard price x (Standard quantity - Actual quantity)

= 15 x (10,000 - 9,800)

= 15 x 200

= $3,000 (Favorable)

(b) Direct material price variance = Actual quantity x (Standard price - Actual price)

= 9,800 x (15 - 16)

= 9,800 x -1

= $9,800 (unfavorable)

(c) Direct labor time variance = Standard rate x (Standard time - Actual time)

= 20 x (12,000 - 12,200)

= 20 x -200

= $4,000 (unfavorable)

(d) Direct labor rate variance = Actual time x (Standard rate - Actual rate)

= 12,200 x (20 - 19)

= 12,200 x 1

= $12,200 (favorable)

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