## 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 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.

## Step-By-Step Solution

#### Chapter 7, Problem Exercise 16

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