Exercise 10-30 Reconstructing Standard-Cost Information from Partial Data (LO 10
ID: 2567591 • Letter: E
Question
Exercise 10-30 Reconstructing Standard-Cost Information from Partial Data (LO 10-1, 10-3) Part of your company's accounting database was destroyed when Godzilla attacked the city. You have been able to gather the following data from your files. Reconstruct the remaining information using the available data. All of the raw material purchased during the period was used in production. (Indicate the effect of each variance by selecting "Favorable" or "Unfavorable". Select "None" and enter "O" for no effect (i.e., zero variance). Round "per unit" answer values to 2 decimal places.) Direct L Direct Ma Standard price or rate per unit of input Standard quantity per unit of output Actual quantity used per unit of output Actual price or rate per unit of input Actual output Direct-material price variance Direct-material quantity variance Total direct-material variance Direct-labor rate variance Direct-labor efficiency variance Total direct-labor variance per hour hours per unit 14.00 per lb lbs per unit 2.50 hours 18.00 per hour 8,500 units 3.00 lbs per unit $13.00 per lb 8,500 units $ 61,200 F $44,400 F $72,250 F $51,000FExplanation / Answer
Direct labor:
Direct labor rate variance =Total direct labor variance -Direct labor efficiency variance
= -51000 - (-72250)
= -51000+ 72250
= 21250 U
actual hours = 8500*2.5 =21250
labor rate variance =AH[AR-SR]
21250 = 21250[18-SR]
21250/21250 = 18-SR
1 =18-SR
SR = 18-1 =$17 per hour
standard rate per hour = $ 17
Labor efficiency variance =sr[AH-SH]
-72250 = 17[21250-SH]
-72250/17 = 21250-SH
-4250 = 21250-SH
SH = 21250+4250
= 25500 HOURS
standard hours per unit = 25500/8500 =$3 per hour
Direct material:
direct material quantity variance =Total variance -material rate variance
= -44400-(-61200)
= -44400+61200
= 16800U
material rate vairance =AQ[AR-SR]
-61200 =AQ[ 13-14]
-61200 =AQ *-1
AQ= -61200/-1
= 61200
Actual quantity per unit = 61200/8500 =7.2 per unit
material quantity variance =SR[AQ-SQ]
16800 = 14[61200-(8500*SQ )]
16800/14 = [61200-8500SQ]
1200= 61200 -8500SQ
8500SQ = 61200-1200
= 60000
standard quantity per unit = 60000/8500 =7.06
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