EXERCISES TM AKMWN 3\4

Max Company has developed the following standards for one of its products:

Direct materials 15 pounds x $16 per pound

Direct labor 4 hours x $24 per hour
Variable overhead 4 hours x $14 per hour
The following activities occurred during the month of October:

Materials purchased 10,000 pounds costing $170,000

Materials used 7,200 pounds
Units produced 500 units
Direct labor 2,300 hours at $23.60 per hour
Actual variable overhead $30,000
The company records materials price variances at the time of purchase.

1. Refer to Figure 9-1. Max's variable standard cost per unit would be
a. $392
b. $336
c. $296
d. $152

2. Refer to Figure 9-1. Max's materials price variance would be

a. $50,000 favorable
b. $50,000 unfavorable
c. $10,000 unfavorable
d. $10,000 favorable

3. Refer to Figure 9-1. Max's materials usage variance would be

a. $40,000 unfavorable
b. $40,000 favorable
c. $4,800 unfavorable
d. $4,800 favorable
4. Refer to Figure 9-1. Max's labor rate variance would be
a. $920 unfavorable
b. $920 favorable
c. $800 unfavorable
d. $800 favorable

5. Refer to Figure 9-1. Max's labor efficiency variance would be

a. $7,200 unfavorable
b. $7,200 favorable
c. $6,280 unfavorable
d. $6,280 favorable

Figure 2

Rax Company has developed the following standards for one of its products:

Direct materials 12 pounds x $14 per pound

Direct labor 3 hours x $18 per hour
Variable overhead 3 hours x $8 per hour

The following activities occurred during the month of October:

 Materials purchased 10,000 pounds at $13.60 per pound
Materials used 9,000 pounds
Units produced 800 units
Direct labor 2,500 hours at $19.00 per hour
Actual variable overhead $22,000

The company records materials price variances at the time of purchase.

6. Refer to Figure 9-2. Rax Company's variable standard cost per unit would
be
a. $78
b. $192
c. $246
d. $222

7. Refer to Figure 9-2. Rax Company's materials price variance would be

a. $4,000 unfavorable
b. $4,000 favorable
c. $1,600 unfavorable
d. $1,600 favorable

8. Refer to Figure 9-2. Rax Company's materials usage variance would be

a. $8,400 unfavorable
b. $8,400 favorable
c. $5,600 unfavorable
d. $5,600 favorable
9. Refer to Figure 9-2. Rax Company's labor rate variance would be
a. $4,300 favorable
b. $4,300 unfavorable
c. $2,500 favorable
d. $2,500 unfavorable

10. Refer to Figure 9-2. Rax Company's labor efficiency variance would be
a. $4,300 unfavorable
b. $4,300 favorable
c. $1,800 unfavorable
d. $1,800 favorable

Figure 3

Tuvok Corporation has developed the following standards for one of its
products:

Standard cost of materials $0.50 per pound

Materials purchased and used 20,000 pounds
Total paid to suppliers $11,000
Standard quantity allowed 18,000 pounds

1. Refer to Figure 9-3. Tuvok Company's actual cost per pound of materials
must have been (round to the nearest cent)
a. $0.50
 b. $0.55
c. $0.61
d. $5.00
2. Refer to Figure 9-3. Tuvok Company's material price variance is
a. $1,000 unfavorable
b. $2,000 unfavorable
c. $1,100 unfavorable
d. cannot be computed from the information given

3. Refer to Figure 9-3. Tuvok Company's materials usage variance is

a. $1,000 unfavorable
b. $1,100 unfavorable
c. $2,000 unfavorable
d. cannot be determined from the information given
4. During May, 6,000 pounds of raw materials were purchased at a cost of $2.60
per pound. If there was a favorable materials price variance of $900 for
December, the standard cost per pound must be
a. $2.75
b. $2.60
c. $2.45
d. none of the above

5. During December, 6,000 pounds of raw materials were purchased at a cost of

$16 per pound. If there was an unfavorable materials price variance of
$6,000 for December, the standard cost per pound must be
a. $17
b. $16
c. $15
d. none of the above

6. During September, 40,000 units of product were produced. The standard

quantity of material allowed per unit was four pounds at a standard cost of
$6.00 per pound. If there was a favorable materials usage variance of
$30,000 for April, the actual quantity of materials used must be
a. 41,250 pounds
b. 38,750 pounds
c. 165,000 pounds
d. 155,000 pounds