1.

What is the standard quantity of kilograms of plastic (SQ) that is allowed to make 35
Number of helmets manufactured (a) 35000
Standard cost per helmet (b) 0.6
Standard quantity of kilograms allowed (a x b) 21000 hours

2. What is the standard materials cost allowed (SQ × SP) to make 35,000 helmets?
Standard quantity of kilograms allowed (a) (SQ) 21000
Standard cost per kg (b) (SP) $8.00
Standard cost allowed for actual output (a x b) ###

3. What is the materials spending variance?

Actual cost incurred (a) $171,000
Standard cost (b) $168,000
Total material variance (a - b) $3,000 Favorable

4. What is the materials price variance and the materials quantity variance?
Actual quantity of input, at the Actual Price $171,000

Actual Quantity of Input at Standard price

Actual Quantity (AQ) (a) 22500 kilograms
Standard
Actual Price of
Hours (SP) (b) at the Actual Rate (a x
Input, $8 per kg
b) $180,000

Standard Quantity Allowed for Output at Standard price

Standard Quantity (SQ) (a) 21000 kilograms
Standard Price of
Actual Hours (SP) (b) at the Actual Rate (a x
Input, $8 per kg
b) $168,000

Materials Price Variance = $9,000 Favorable

Materials Quantity Variance = $12,000 Unfavorable
Spending variance = $3,000 Unfavorable
1. What is the standard labor-hours allowed (SH) to prepare 4,000 meals?
Number of meals prepared (a) 4000
Standard direct labor-hours per meal 0.25
Standard labor-hours allowed (a 1000 hours

2. What is the standard labor cost allowed (SH × SR) to prepare 4,000 meals?
Standard labor-hours allowed (a) 1000
Standard direct labor cost per hour ( $19.75
Standard labor cost allowed (a x $19,750.00

3. What is the labor spending variance?

Actual cost incurred (a) 19200
Standard labor cost allowed (b) 19750
Labor spending variance (b - a) 550 Favorable

4. What is the labor rate variance and the labor efficiency variance?
Actual Hours of Input, at the Actual Rate
Actual Hours (a) 960 labor hours
Actual Rate
Actual (b) of Input, at the
Hours $20 per hour
Actual Rate (a x b) $19,200

Actual Hours of Input, at the Standard Rate

Actual Hours (a) 960 labor hours
Standard
Actual Rate (b)
Hours of Input, at the $20 per hour
Actual Rate (a x b) $18,960

Standard Hours Allowed for Output, at the Standard rate

Standard Hours (a) 1000 labor hours
Standard Rate (b)
Actual Hours of Input, at the $20 per hour
Actual Rate (a x b) $19,750

Labor Rate Variance = $240 Unfavorable

Labor Efficiency Variance = $790 Favorable
Spending Variance = $550 Favorable
1. What is the standard labor-hours allowed (SH) to ship 120,000 items to customers?

Number of items shipped (a) 120,000

Standard labor-hours per item (b) 0.02
Standard quantity of labor-hours allowe 2,400

2. What is the standard variable overhead cost allowed (SH × SR) to ship 120,000 items to customers?

Standard quantity of labor-hours allowed (a) 2,400

Standard variable overhead cost per hour (b) $3.25
Standard variable overhead cost allowed $7,800

3. What is the variable overhead spending variance?

Actual variable overhead cost incurred (a) $7,360

Standard variable overhead cost allowed (b) $7,800
Variable overhead spending variance (a) – (b -$440 F

4. What is the variable overhead rate

Actual variance
Hours of and the variable overhead efficiency variance? Actual Hours of
Input, at the Input, at the
Actual Rate Standard Rate
(AH hours
2,300 × AR) × (AH hours
2,300 × SR) ×
$3.20 per hour* $3.25 per hour
7360 Variable overhead rate variance, 7475
$115 F Spending Variance,
$440 F
customers?

Actual Hours of Standard Hours Allowed

Input, at the for Output, at
Standard Rate the Standard Rate
(AH hours
2,300 × SR) × (SHhours**
2,400 × SR) ×
$3.25 per hour $3.25 per hour
7475 7800
Variable overhead efficiency variance,
Spending Variance, $325 F
$440 F
1. What is the standard labor-hours allowed (SH) to makes 20,000 Jogging Mates?

Number of units manufactured (a) 20,000

Standard labor time per unit
(18 minutes ÷ 60 minutes per hour 0.3
Standard labor-hours allowed ( 6,000

2. What is the standard labor cost allowed (SH × SR) to make 20,000 Jogging Mates?

Standard labor-hours allowed (a) 6,000

Standard direct labor rate per hour $17
Standard labor cost allowed (a $102,000

3. What is the labor spending variance?

Actual direct labor cost (a) $102,350

Standard labor cost allowed (b) $102,000
Labor spending variance (a) – $350 U

4. What is the labor rate variance and the labor efficiency variance?
Actual Hours of Actual Hours of
Input, at the Input, at the
Actual Rate Standard Rate
(AH × AR) (AH hours
5,750 × SR) ×
$17.00 per hour
$102,35 Labor rate variance, 97750
$4,600 U Spending Variance,
$350 U

5. The budgeted variable manufacturing overhead rate is $4 per direct labor-hour. During
August, the company incurred $21,850 in variable manufacturing overhead cost. Compute
the variable overhead rate and efficiency variances for the month.
Actual Hours of Actual Hours of
Input, at the Input, at the
Actual Rate Standard Rate
(AH × AR) (AH hours
5,750 × SR) ×
$4.00 per hour
21850 Variable overhead rate variance, 23000
$1,150 F Spending Variance,
$2,150 F
 Actual Hours of Standard Hours Allowed
Input, at the for Output, at
Standard Rate the Standard Rate
(AH hours
5,750 × SR) × (SHhours*
6,000 × SR) ×
$17.00 per hour $17.00 per hour
97750 Labor efficiency variance, 102000
Spending Variance, $4,250 F
$350 U
 Actual Hours of Standard Hours Allowed
Input, at the for Output, at
Standard Rate the Standard Rate
(AH hours
5,750 × SR) × (SH hours
6,000 × SR) ×
$4.00 per hour $4.00 per hour
23000 24000
Variable overhead efficiency variance,
Spending Variance, $1,000 F
$2,150 F
1. What is the standard cost of a single backpack?

Materials 16,800
Direct labor 21,000
Manufacturing overhead 4,200
Total standard cost 42,000

Total standard cost 42000

Number of backpacks produces 1000
Standard cost of a single back 42

2. What was the actual cost per backpack produced during March?

Standard
Differencecost of a single
between backpack
standard and 42 Answer in #1
actual cost 0.15 Minus
Actual cost per backpack 41.85

3. How many yards of material are required at standard per backpack?

Total standard cost of material
during March
Mumber (a)
of backpacks produced 16,800
during March
Standard (b)
materials cost per 1000
backpack (a / b) 16.8
Standard materials cost per
backpack 16.8 per unit
Standard materials
Number of yards cost
per per yard 6 per yard
backpack 2.8 yards per backpack

4. What was the materials price variance for March if there were no
beginning or ending inventories of materials?

Standard cost of material used 16,800 Given

Actual cost of material
The materials price andused
quantity variances15,000 Given
together equal the
Spending variance 1,800
spending variance. If the materials quantity variance is $1,200 U, then
the materials price variance must be $3,000 F:

Materials price variance 3,000 F

Materials quantity variance 1,200 U
Spending variance 1,800 F
5. What is the standard direct labor rate per hour?
Standard variable
Standard variable manufacturing
manufacturing
overhead
overhead rate per March
cost for direct labor- 4,200
hour
Standard direct labor-hours 3
for March 1400
Total standard direct labor cost
for March
Total standard direct labor-hours 21,000
for March 1,400 DLH
Standard direct labor rate per 15 per DLH
6. What was the labor rate variance for March? The labor efficiency variance?

Actual cost per backpack produced (#2) 41.85

Number of backpacks produced 1,000
Total actual cost of production 41850
Less: Actual cost of materials 15,000
Actual cost of variable manufacturing overhead 3,600 18,600
Actual cost of direct labor 23,250

Actual hours of input x Actual rate (AH x AR) 23,250

Actual hours of input (given) 1500 hours

Standard rate 15 per hour (#5)
Actual hours of input, at the standard rate (AH x S 22500

Standard hours allowed for output, at the standard 21,000

Therefore, the labor rate variance for March is $750, and the labor efficiency variance

7. What was the variable overhead rate variance for March? The variable overhead efficiency variance?

Actual hours of input x Actual rate (AH x AR) 3,600 Given

Actual hours of input (given) 1500

Standard rate 3
Actual hours of input, at the standard rate (AH x S 4500

Standard hours allowed for output, at the standard 4,200

8. Prepare a standard cost card for one backpack. Standard

quantity or Standard
hours price or rate
Direct materials (yard) 2.8 6
Direct labor (hour) 1.4 15
Variable Manufacturing overhead (hour) 1.4 3
Total standard cost
 Labor rate variance 750 U

Labor efficiency variance 1,500 U

Spending variance 2,250 U

verhead efficiency variance?

Variable overhead rate var -900 F

Variable overhead efficien 300 U

Spending variance -600 F

Standard cost
16.8
21
4.2
42