Calculating Variances for Calpine Manufacturing
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P8-4A Calpine Manufacturing Company uses a standard cost accounting system.
In 2002, 32,000 units were produced. Each unit took several pounds of direct materials and 1¼ standard hours of direct labor at a standard hourly rate of $12.00. Normal capacity was 50,000 direct labor hours. During the year, 133,000 pounds of raw materials were purchased at $0.92 per pound. All pounds purchased were used during the year.
Instructions
a. If the materials price variance was $3,990 favorable, what was the standard
materials price per pound?
b. If the materials quantity variance was $1,710 unfavorable, what was the
standard materials quantity per unit?
c. What were the standard hours allowed for the units produced?
d. If the labor quantity variance was $7,200 unfavorable, what were the actual
direct labor hours worked?
e. If the labor price variance was $6,000 favorable, what was the actual rate per
hour?
f. If total budgeted manufacturing overhead was $340,000 at normal capacity,
what was the predetermined overhead rate?
g. What was the standard cost per unit of product?
h. How much overhead was applied to production during the year?
i. If the fixed overhead rate was $2.00, what was the overhead volume variance?
j. If the overhead controllable variance is $3,000 unfavorable, what were the
total variable overhead costs incurred?
k. Using one or more answers above, what were the total costs assigned to work
in process?
Managerial Accounting
Chapter 8
Page 540
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Solution Summary
The solution explains how to calculate the various material, labor and overhead variances for Calpine Manufacturing Company
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