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Purchased Budget, Direct labor price variance

1. The Cup Company makes mugs for which the following standards have been developed:

Standard Inputs Expected Standard Price Expected per Unit
Per Unit of Output Of Output

Direct Materials 5 ounces $2 per ounce
Direct Labor 1.5 hours $8 per hour

Production of 400 mugs was expected in April, butt 440 mugs were actually produced. Direct materials purchases and used were 2,1000 ounces at an actual price of $2.20 per ounce. Direct labor cost for the month was $5,310, and the actual pay per hour was $9.00. What is the direct labor price variance for the month of April?

2. The Harwood Company makes Harwood tables for which the following standards have been developed:

Standard Inputs Expected Unit Standard Price expected per Unit
Of Output of Output

Direct Materials 10 pounds $4 per pound
Direct Labors 3 hours $16 per hour

Production of 200 tables was expected in March, but 220 tables were actually produced. Direct materials purchased and used were 2,000 pounds at an actual price of $4.40 per pound. Direct labor cost for the month was $10,620, and the actual pay per hour was $18.00. What is the direct labor usage variance for the month of March?

3. Heaven's expected sales for April are $ 27,600. Information about other budgeted expenses is presented below.

Budgeted Expenses per Month
Wages $ 2,000
Advertising $1,680
Depreciation $ 1,440
Rent $ 2560
Other 5 percent of sales

All cash expenses are paid as incurred. What are the total expected cash disbursements for expenses in April?

4. The following information is for Westlake Corporation:
Direct Material

Actual price per unit of output $18
Standard price per unit of input $20
Standard inputs allowed per-unit of outputs 3 pounds
Actual unit of input 8,300 pounds
Actual units of output 2,770 units

Direct material is measured in pounds.

What is the direct material price variance?

5. The following sales budget has been prepared:

Month Cash Sales Credit Sales
September $100,000 $200,000
October $125,000 $180,000
November $130,000 $210,000
December $135,000 $190,000

Collections are 50 percent in the month of sale, 40 percent in the month following the sale, and 10 percent two moths following the sale. No uncollectible accounts are anticipated. What is the expected balance of Accounts Receivable as of November 30?

6. The following sales budget has been prepared:

Month Cash Sales Credit Sales
September $100,000 $200,000
October $125,000 $180,000
November $130,000 $210,000
December $135,000 $190,000

Collections are 50 percent in the month of sales, 40 percent in the month following the sale, and 10 percent two months following sale. No uncollectible accounts are anticipated. What are the estimated cash collections in December?

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Solution Summary

The solution has various problems dealing with budget preparation and variance calculation.

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