Exercises on Chapter 12

Please print and bring to class on Friday.

1. Harnish Corporation is developing standards for its products. One product requires an input that is
purchased for $55.00 per kilogram from the supplier. By paying cash, the company gets a discount of 8% off
this purchase price. Shipping costs from the supplier's warehouse amount to $5.17 per kilogram. Receiving
costs are $0.28 per kilogram. Each unit of output of the product requires 0.75 kilogram of this input. The
allowance for waste and spoilage is 0.04 kilogram of this input for each unit of output. The allowance for
rejects is 0.11 kilogram of this input for each unit of output.
The standard price per kilogram of this input should be:
A. $55.00
B. $56.05
C. $53.95
D. $64.85

The standard quantity in kilograms of this input per unit of output should be:
A. 0.75
B. 0.71
C. 0.90
D. 0.60
2-3. Schoenfeld Corporation is developing direct labor standards. The basic direct labor wage rate is $10.00
per hour. Employment taxes are 9% of the basic wage rate. Fringe benefits are $3.71 per direct labor-hour. A
particular product requires 0.88 direct labor-hours per unit. The allowance for breaks and personal needs is
0.06 direct labor-hours per unit. The allowance for cleanup, machine downtime, and rejects is 0.09 direct
labor-hours per unit.
2. The standard rate per direct labor-hour should be:
A. $4.61
B. $10.00
C. $5.39
D. $14.61
3. The standard direct labor-hours per unit should be:
A. 0.88
B. 1.03
C. 0.73
D. 0.82

4-9. The Koski Company has established standards as follows:

Actual production figures for the past year were as follows:

4. The materials price variance is:

A. $160 U
B. $6,300 U
C. $300 U
D. $150 U
5. The materials quantity variance is:
A. $400 U
B. $410 F
C. $410 U
D. $6,000 U
6. The labor rate variance is:
A. $210 F
B. $190 F
C. $399 F
D. $190 U
7. The labor efficiency variance is:
A. $400 F
B. $800 F
C. $800 U
D. $500 F
8. The variable overhead rate variance is:
A. $345 F
B. $95 F
C. $655.50 F
D. $345 U
9. The variable overhead efficiency variance is:
A. $500 F
B. $500 U
C. $245 F
D. $250 F

10-14. The Apoundright Company uses standard costing and has established the following standards for its
single product:
Direct materials: 2 gallons at $3 per gallon
Direct labor: 0.5 hours at $8 per hour
Variable overhead: 0.5 hours at $2 per hour
During November, the company made 4,000 units and incurred the following costs:
Direct materials purchased: 8,100 gallons at $3.10 per gallon
Direct materials used: 7,600 gallons
Direct labor used: 2,200 hours at $8.25 per hour
Actual variable overhead: $4,175
The company applies variable overhead to products on the basis of standard direct labor-hours.
10. The materials price variance for November was:
A. $2,310 U
B. $2,310 F
C. $810 U
D. $810 F
11. The materials quantity variance for November was:
A. $1,200 U
B. $1,200 F
C. $300 U
D. $1,500 F
12. The labor rate variance for November was:
A. $1,050 U
B. $550 U
C. $2,150 U
D. $2,150 F
13. The labor efficiency variance for November was:
A. $1,050 U
B. $550 U
C. $1,600 F
D. $1,600 U
14. The total variable overhead variance (including both the rate and efficiency variances) for November
was:
A. $175 U
B. $225 F
C. $225 U
D. $400 U

15-18. Reenu Company manufactures wigs out of used dental floss. The variable cost standards for wig
production developed by Reenu are as follows:

Variable overhead at Reenu is based on direct labor-hours. The actual results for the month of October were
as follows:

15. What is Reenu's materials price variance for October?

A. $1,680 favorable
B. $12,760 unfavorable
C. $14,440 unfavorable
D. $15,420 unfavorable
16. What is Reenu's materials quantity variance for October?
A. $2,660 unfavorable
B. $14,440 unfavorable
C. $17,100 unfavorable
D. $51,300 unfavorable
17. What is Reenu's labor efficiency variance for October?
A. $2,700 favorable
B. $7,200 unfavorable
C. $9,900 unfavorable
D. $27,600 favorable
18. What is Reenu's variable overhead rate variance for October?
A. $3,400 favorable
B. $4,850 unfavorable
C. $8,250 unfavorable
D. $26,400 favorable