# Solutions Chap 16 Essay

Submitted By dwhk
Words: 4702
Pages: 19

Chapter 16
Standard Costing

16.1
(a)
Material price variance 30 000 x (\$4.95 - \$5.00) = \$1 500 FAV

(b)
Material efficiency variance (16 700 – 16 600) x \$5.00 = \$500 U/F

(c)
General Journal Debit Credit
Feb 28 Material control 150 000 Material price variance 1 500 General ledger control 148 500 Purchase of direct material and the price variance _________________________________________________________ Work in process 83 000 Material efficiency variance 500 Material control 83 500 Issue of direct material and the efficiency variance _________________________________________________________

16.2
(a)
Material price variance 40 000 x (\$6.45 - \$6.50) = \$2 000 FAV

(b)
Material efficiency variance (30 620 – 30 250) x \$6.50 = \$2 405 U/F

(c)
General Journal Debit Credit
Mar 31 Material control 260 000 Material price variance 2 000 General ledger control 258 000 Purchase of direct material and the price variance _________________________________________________________ Work in process 196 625 Material efficiency variance 2 405 Material control 199 030 Issue of direct material and the efficiency variance _________________________________________________________

16.3
(a)
Material price variance \$ Material X 164 000 x (\$3.95 - \$4.00) = 8 200 FAV Material Y 124 000 x (\$3.10 - \$3.00) = 12 400 U/F 4 200 U/F

(b)
Material efficiency variance \$ Material X (163 000 – 162 000) x \$4.00 = 4 000 U/F Material Y (107 000 – 108 000) x \$3.00 = 3 000 FAV 1 000 U/F

16.4
(a)
Material price variance \$ Material P1 105 000 x (\$3.10 - \$3.00) = 10 500 U/F Material F5 22 000 x (\$2.45 - \$2.50) = 1 100 FAV 9 400 U/F

(b)
Material efficiency variance \$ Material P1 (107 600 – 108 000) x \$3.00 = 1 200 FAV Material F5 (13 600 – 13 500) x \$2.50 = 250 U/F 950 FAV

16.5
(a)
Material price variance 48 000 x (\$1.05 - \$1.00) = \$2 400 U/F

Material efficiency variance (48 000 – 48 250) x \$1.00 = \$250 FAV

(b)
General Journal Debit Credit
Apr 30 Material control 52 500 General ledger control 52 500 Purchase of direct material __________________________ Work in process 48 250 Material price variance 2 400 Material efficiency variance 250 Material control 50 400 Issue of direct material and the efficiency variance _________________________________________________________

16.6
(a)
Labour rate variance 119 900 x (\$7.95 - \$8.50) = \$65 945 FAV

Labour efficiency variance (119 900 – 119 910) x \$8.50 = \$85 FAV

(b)
General Journal Debit Credit
Apr 30 Work in process 1 019 235 Labour rate variance 65 945 Labour efficiency variance 85 Labour control 953 205 Distribution of direct labour and the variances _________________________________________________________

16.7
(a)
Labour rate variance 15 000 x (\$9.10 - \$9.00) = \$1 500 U/F

Labour efficiency variance (15 000 – 15 100) x \$9.00 = \$900 FAV

(b)
General Journal Debit Credit
Sep 30 Work in process 135 900 Labour rate variance 1 500 Labour efficiency variance 900 Labour control 136 500 Distribution of direct labour and the variances _________________________________________________________

16.8
(a)
Material price variance 16 000 x (\$5.05 - \$5.00) = \$800 U/F

Material efficiency variance (10 910 – 10 900) x \$5.00 = \$50 U/F

(b)
Labour rate variance 5 500 x (\$9.45 - \$9.50) = \$275 FAV

Labour efficiency variance (5 500 – 5 450) x \$9.50 = \$475 U/F

16.9
(a)
Material price variance 25 500 x (\$4.30 - \$4.20) = \$2 550 U/F

(b)
Material efficiency variance (27 200 – 27 300) x \$4.20 = \$420 FAV

(c)
Labour rate variance 18 150 x (\$8.85 - \$8.90) = \$907.50 FAV

(d)
Labour efficiency variance (18 150 – 18 200) x \$8.90 = \$445 FAV

16.10
(a)
Actual overhead Budget based on Budget based on Overhead Incurred actual hours standard hours applied \$ \$ \$ \$
V. 189 400 V. 122 000 x \$1.50 V. 125 000 x \$1.50 125 000 x \$2.50 = 183 000 = 187 500
F. 110 890 F. 120 000 F. 120 000