# Standard Cost and Variances of Material

19. The following materials standards have been established for a particular raw material used in the company's sole product:

Standard quantity per unit of output 1.0 pound

Standard price $16.60 per pound

The following data pertain to operations concerning the product for the last month:

Actual materials purchased 2,200 pounds

Actual cost of materials purchased $34,650

Actual materials used in production 1,900 pounds

Actual output 2,100 units

What is the materials quantity variance for the month?

A) $3,320 F

B) $3,150 F

C) $4,980 U

D) $4,725 U

20. The following standards for variable manufacturing overhead have been established for a company that makes only one product:

Standard hours per unit of output 2.8 hours

Standard variable overhead rate $16.30 per hour

The following data pertain to operations for the last month:

Actual hours 7,600 hours

Actual total variable overhead cost $127,300

Actual output 2,500 units

What is the variable overhead spending variance for the month?

A) $3,420 U

B) $3,150 F

C) $10,050 U

D) $13,200 U

21. The following materials standards have been established for a particular product:

Standard quantity per unit of output 0.2 grams

Standard price $18.90 per gram

The following data pertain to operations concerning the product for the last month:

Actual materials purchased 4,800 grams

Actual cost of materials purchased $86,880

Actual materials used in production 4,200 grams

Actual output 21,080 units

Required:

a. What is the materials price variance for the month? (2 points)

b. What is the materials quantity variance for the month? (2 points)

22. The following labor standards have been established for a particular product:

Standard labor hours per unit of output 3.2 hours

Standard labor rate $19.10 per hour

The following data pertain to operations concerning the product for the last month:

Actual hours worked 5,500 hours

Actual total labor cost $105,050

Actual output 1,900 units

Required:

a. What is the labor rate variance for the month? (2 points)

b. What is the labor efficiency variance for the month? (2 points)

23. The following standards for variable manufacturing overhead have been established for a company that makes only one product:

Standard hours per unit of output 0.6 hours

Standard variable overhead rate $17.55 per hour

The following data pertain to operations for the last month:

Actual hours 6,200 hours

Actual total variable overhead cost $110,670

Actual output 10,200 units

Required:

a. What is the variable overhead spending variance for the month? (2 points)

b. What is the variable overhead efficiency variance for the month? (2 points)

#### Solution Preview

19. The following materials standards have been established for a particular raw material used in the company's sole product:

Standard quantity per unit of output 1.0 pound

Standard price $16.60 per pound

The following data pertain to operations concerning the product for the last month:

Actual materials purchased 2,200 pounds

Actual cost of materials purchased $34,650

Actual materials used in production 1,900 pounds

Actual output 2,100 units

What is the materials quantity variance for the month?

A) $3,320 F

B) $3,150 F

C) $4,980 U

D) $4,725 U

Answer: A

Materials quantity variance = difference between actual quantity x standard cost per unit of

used and standard quantity allowed input

= (1,900 - (2,100 x 1 lb.) x $16.60

= $3,320 F

20. The following standards for variable manufacturing ...

#### Solution Summary

This solution is comprised of a detailed explanation to calculate quantity variance and efficiency variance.