P8-4

1 Standard Quantity 5,000.00

Less: Actual Quantity 5,300.00 200.00
Multiply: Standard Cost 3.00
Materials Quantity Variance 600.00

2 Standard Cost 3.00

Less: Actual Cost 2.90 0.10
Multiply: Actual Quantity 5,500.00
Materials Purchase Price Variance 550.00

3 Standard Hours 8,000.00

Less: Actual Hours 8,200.00 200.00
Multiply: Standard Rate 10.00
Labor Efficiency Variance 2,000.00

4 Standard Rate 10.00

Less: Actual Rate 9.80 0.20
Multiply: Actual Hours 8,200.00
Labor Rate Variance 1,640.00

5 The unfavorable results of both Materials Quantity Variance and

Labor Efficiency Variance is caused by the excessive use of
direct materials and excessive direct labor hours actually worked compared to
the standard quantity and and hours allowed for the actual level
of production.

P8-11
1 Actual Production 4,000.00
Standard Materials per unit 5.00
Standard Quantity of Materials Allowed 20,000.00 lbs.

2 Standard Quantity 20,000.00

Unfavorable Materials quantity (1000 x 1) 1,000.00
Actual Quantity of Materials Used 21,000.00 lbs.

3 Actual Production 4,000.00

Standard Hours per unit 1.00
Standard Direct Labor Hours Allowed 4,000.00 hrs.
4 Standard Hours Allowed 4,000.00
Favorable Labor Efficiency Variance (1200/8) 150.00
Actual Direct Labor Hours Worked 3,850.00 hrs.

5 Standard Direct Labor Rate 8.00

Unfavorable Direct Labor Rate (770/3850) 0.20
Actual Direct Labor Rate 8.20

P8-12
Variable Cost (2500 x 4 x 1) 10,000.00
Fixed Cost 20,000.00
Flexible Budget at Actual Production Level 30,000.00
Less: Actual Factory Overhead Incurred 29,750.00
Flexible Budget Variance 250.00 Favorable

Flexible Budget at Actual Production Level 30,000.00

Factory Overhead Applied (2500 x 13.52) 33,800.00
Production-Volume Variance 3,800.00 Favorable

P8-18
1 Actual Variable Overhead 45,009.00
Actual Hours Worked 13,015.00
Standard Variable Rate per Hour (44200/(500 x 26)) 3.40 44,251.00
Variable Spending Variance 758.00

Actual Hours Worked 13,015.00

Standard Variable Rate per Hour (44200/(500 x 26)) 3.40 44,251.00
Actual Production 510.00
Standard Hours per Unit 26.00
Total 13,260.00
Multiply: Standard Rate 3.40 45,084.00
Variable-Efficiency Variance 833.00

Actual Fixed Cost 50,125.00

Budgeted Fixed Cost 50,050.00
Fixed Spending Variance 75.00 Unfavorable

Budgeted Fixed Cost 50,050.00

Actual Production 510.00
Standard Hours per Unit 26.00
Standard Hours 13,260.00
Fixed Overhead Rate (50050/(500 x 26)) 3.85 51,051.00
Production-Volume Variance 1,001.00
2 Variable Spending Variance 758.00 U
Variable-Efficiency Variance 833.00 F
Fixed Spending Variance 75.00 U
Production-Volume Variance 1,001.00 F
Net Overhead Variance 1,001.00 F

Applied Overhead (13260 x (3.4 + 3.85)) 96,135.00

Actual Total Overhead (45009 + 50125) 95,134.00
Overapplied Factory Overhead 1,001.00 Favorable
Unfavorable

Favorable

Unfavorable

Favorable
Unfavorable

Favorable

Favorable