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Solution for Cost Accounting: Foundations and Evolutions 8th Edition Chapter 7, Problem 16

by Michael R. Kinney, Cecily A. Raiborn
358 Solutions 19 Chapters 53452 Studied ISBN: 9781439044612 Accounting 5 (1)

Chapter 7, Problem Exercise 16 : Exercise 7-25   ...

Exercise 7-25

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Insert your answers in the gray-shaded cells. If an answer is

 

 

incorrect, the word "wrong" will appear.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

a.

November production

 

         4,800

 

 

 

 

 

Standard materials per bag

×

           0.50

 

 

 

 

 

Total square yards

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

b.

November production

 

         4,800

 

 

 

 

 

Standard labor per bag

×

           2.00

 

 

 

 

 

Total labor hours

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

c.

AQ = SQ + (Material quantity variance ÷ SP)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Material quantity variance

 

$         600

 

 

 

 

 

÷ Standard price

 

 

$        6.00

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

+ Standard quantity

 

         2,400

 

 

 

 

 

Actual quantity used (AQ)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total actual cost

 

 

$    14,550

 

 

 

 

 

÷ Actual quantity

 

 

         2,500

 

 

 

 

 

Actual price (AP)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Material price variance = AQ x (AP - SP)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Actual price (AP)

 

 

$        5.82

 

 

 

 

 

- Standard price (SP)

 

           6.00

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

x Actual quantity used (AQ)

         2,500

 

 

 

 

 

Material price variance

 

$           -  

 

Favorable

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

d.

Labor efficiency variance = SP x (AH - SH)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Actual hours (AH)

 

         9,760

 

 

 

 

 

Standard hours (SH)

 

         9,600

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Standard price (SP)

×

$      17.00

 

 

 

 

 

Labor efficiency variance

 

 

 

Unfavorable

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

e.

Standard prime cost per travel bag:

 

 

 

 

 

Material

 

 

$        3.00

 

 

 

 

 

Labor

 

 

         34.00

 

 

 

 

 

Standard prime cost

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

f.

AP =  SP - (Labor rate variance  ÷  AQ)

 

 

 

 

 

Standard labor rate (SP)

 

 

 

 

 

$ 17.00

 

Labor rate variance

 

 

 

$    1,464.00

 

 

 

÷ Actual quantity (AQ) labor hrs.

 

            9,760

 

 

 

Actual price (AP)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Actual cost to produce one bag:

 

 

 

 

 

 

 

Cost

÷

SH

 

 

 

 

 

 

Material

$ 14,550

 

         4,800

 

 

Wrong

 

 

 

 

( AH

÷

SH )

x

AP

 

 

 

 

Labor

      9,760

 

         4,800

 

$16.85

Wrong

 

 

 

Total cost per bag

 

 

 

 

 

$       -  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

g.

 

 

 

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Chapter 7, Problem Exercise 16

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