Aunt Mollys Old Fashioned Cookies Cost item Qty per pound of cookies 10 5 1 Mts 1 2 8 St unit costs

Direct material Cookie mix Milk Chocolate Almonds Direct manf labor Mixing Baking Variable overhead

0.02 0.15 0.50 14.40 18.00 32.40

Perfomance report April 2007 Particulars Units Revenues Direct materials Direct manf labor Usage report Cost item Direct materials Cookie mix Milk Chocolate Almonds Qty 4,650,000.00 2,660,000.00 480000.00 Actual cost 93,000.00 532,000.00 240,000.00 Actual 450000 3,555,000.00 865,000.00 348,000.00 Budget 400000 3,200,000.00 580,000.00 336,000.00 Variance 50000 355,000.00 285,000.00 12,000.00

Favorable Favorable Unfavorable Unfavorable

Direct manf labor Mixing Baking 450,000.00 800,000.00 108,000.00 240,000.00

Required 1. Sales price variance 2. Direct material price variance 3. Direct material efficiency variance 4. Direct labor efficiency variance

1. Sales price variance Saled price variance Actual quantity sold (Actual selling price - Budgeted selling price) Actual quantity sold Actual selling price Budgeted selling price Sales price variance 450000 7.90 8.00 (45,000.00) Unfavorable

2. Direct material price variance Actual quantity purchased (Actual price - Budgeted price) Cost item Actual quty Purchased * Actual price 93,000.00 532,000.00 240,000.00 Actual quty purchased* budgeted price 93,000.00 399,000.00 240,000.00 Unfavorable/ (favorable variance)

Cookie milk Milk Chocolate Almond

133,000.00 -

3. Direct material efficiency variance Budgeted rate (Actual qty used - Budgeted qty used) Cost item Budgeted rate * actual quty used 93,000.00 399,000.00 240,000.00 Budgeted rate * budgeted qty used 90,000.00 337,500.00 225,000.00 Unfavorable/ (favorable variance) 3,000.00 61,500.00 15,000.00

Cookie mix Milk Chocolate Almond

4. Direct labor efficiency variance Budgeted labor rate (Actual labor hrs - Budgeted labor hrs) Cost item Budgeted labor rate * Actual labor hrs 108,000.00 240,000.00 Budgeted labor rate * budgeted labor rate 108,000.00 270,000.00 Unfavorable/ (favorable variance)

Mixing Baking

(30,000.00)

Horizon Limited Scenario Particulars Units sold Revenues Variable Manf costs Fixed Manf costs Gross Margin Additional details Standard cost Lenses Standard input Direct materials Actuals Direct materials Standard input Labour Actual Direct labour Actual labor rate Direct manf labor Standard input Lenses 37,248.00 3.20 96,908.00 14.80 90,000.00 1.2 hrs per unit Frames 100,492.00 7.00 Actual results 4,850 397,700.00 234,643.00 72,265.00 90,792.00 Static Budget 5,000 400,000.00 216,000.00 75,000.00 109,000.00

6 Ounces per unit 33,000.00

Frames Standard input Direct materials

3 Ounces per unit 93,000.00

Required 1. Selling price variance 2. Sales volume variance 3. Flexible budget variance in level 2 analysis 4. Price and efficiency variance a) Direct material frames b) Direct material lenses 5. Direct manf labour a) Rate variance b) Efficiency variance

Horizon Limited 1. Selling price variance Actual quantity sold * (Actual selling price - budgeted selling price)

Actual quantity sold Actual selling price Budgeted selling price

4,850.00 82.00 80.00

Selling price variance

9,700.00 favorable

2. Sales volume variance Budgeted selling price *(Actual quantity sold - budgeted quantity sold)

Budgeted selling price Actual quantity sold Budgeted quantity sold Sales volume variance

80.00 4,850.00 5,000.00 (12,000.00) Unfavorable

3. Flexible budget in level 2 analysis Static budget variance = Flexible budget variance + sales volume variance

Flexible budget variance Actual gross margin - flexible gross margin

Actual gross margin Flexible budget gross margin Flexible budget variance

90,792.00 103,480.00 (12,688.00) Unfavorable

Sales volume variance Flexible gross margin - static budget margin Flexible gross margin - static budget margin

Flexible budget gross margin Static budget gross margin Sales volume variance

103,480.00 109,000.00 (5,520.00) Unfavorable

4(a) Price and efficiency variance of direct material - Frames

Price variance - Frames Actual quantity purchased (Actual price - Budgeted price)

Actual quantity input Actual price Budgeted price Price variance - Frames

15,520.00 2.40 2.20 3,104.00 Unfavorable

Efficiency variance - Frames Budgeted price (Actual quantity used - budgeted quantity used)

Actual quantity used Budgeted quantity used Budgeted price Efficiency variance - Frames

15,520.00 14,550.00 2.20 2,134.00 Unfavorable

Horizon Limited 4(b) Price and efficiency variance of direct material Lenses Price variance - Lenses Actual quantity purchased (Actual price - Budgeted price) Actual quantity input 33,950.00 Actual price 2.96 Budgeted price 3.10 Price variance - Lenses (4,753.00) Favorable Efficiency variance - Lenses Budgeted price (Actual quantity used - budgeted quantity used) Actual quantity used Budgeted quantity used Budgeted price Efficiency variance Lenses 33,950.00 29,100.00 3.10 (15,035.00) Unfavorable

5. Rate and efficiency variance- Direct Manf labor (a) Rate variance Actual labor hrs ( Actual labor rate - Budgeted labor rate) Actual labor hrs Actual labor rate Standard labor rate Rate variance 6547.84 14.80 15.00 (1,309.57) Favorable

(b) Efficiency variance - Direct manf labor Budgeted labor rate (Actual labor hrs - budgeted labor hrs) Budgeted rate Actual hrs Budgeted direct labor hrs Efficiency variance 15.00 6,547.84 5,820.00 (10,917.57) Unfavorable

Morco Bay Sarfboards Particulars Standard unit and rate Direct materials Units Rate Direct labor Hours Rate Units completed Materials purchased Cost of direct materials purchased Actual direct manf labor Actual direct labor cost Direct material efficiency variance

20 pounds 2 per pound 5 hrs 12 per hr 6000 units 150000 pounds 292500 32000 hrs 368000 12500 Unfavorable

Required 1. Compute direct manf labor variance for July 2. Compute actual pounds of direct materials used in production 3. Calculate actual price per pound of direct materials purchased 4..Calculate the direct material price variance.

1(a) Direct labor variance - Rate Actual hrs worked (Actual rate - Budgeted rate) Actual hrs worked Actual rate Budgeted rate Rate variance 32,000.00 11.50 12.00 16,000.00 Favorable

(b) Direct labor variance - Efficiency Budgeted rate (Actual hrs - Budgeted hrs) Budgeted rate Actual hrs Budgeted hrs Efficiency variance 12.00 32,000.00 30,000.00 24,000.00 Unfavorable

2. Actual pounds of direct materials used in production Material efficincy = Budgeted rate (Actual materials used - Budgeted Materials used ) Unfavorable direct material efficiency variance (Given) Budegeted rate Budgeted materials used Actual materials used 12,500.00 2.00 120,000.00 126,250.00

3. Actual price per pound of direct materials purchased

Actual Material cost Actual materials purchased Actual price per pound of direct materials purchased

292,500.00 150,000.00 1.95

4. Direct material price variance Actual materials purchased ( Actual price - St price) Actual materials purchased Actual price 150,000.00 1.95

Scenario Bovar Company Standard costs for a company Direct materials Direct Manf labor Manf OH Per unit 15.00 10.00 7.50 Per lbs 5 20 3 0.5

Following details are obtained from bovars records Debit Accts payable Purchase of dm DM price variance DM Efficiency variance Direct manufacturing Direct manufacturing labor efficiency variance Actual production in May was Actual sales There was no beginning or ending inventory 3250 2500 1900 2000 4000 2500 Credit 125000 68250

Required 1. Standard direct manf labour hrs allowed for actual output 2. Actual direct manf labor hrs 3. Actual direct manf labor wage rate 4. St quantity of direct materials allowed 5. Actual quantity of direct material used 6. Actual quantity of direct material purchased 7. Actual direct material price per pound

1. Standard direct manf hrs allowed for actual output Actual output Standard hrs Standard direct manf hrs allowed for actual output 4000.00 0.50 2,000.00

2. Actual direct manf labor hrs Labor efficiency variance Budgeted rate ( Actual direct labor hrs - budgeted direct labor hrs) Labor efficiency variance favorable (Given) Budgeted rate Budgeted direct labor hrs Actual direct manf labor hrs 2,000.00 20.00 2,000.00 1900.00

3. Actual Manufacturing wage rate Labor rate variance Actual hrs worked (Actual rate-Budgeted rate ) Labor rate variance Unfavorable (Given) Actual hrs worked

1900.00 1900.00

Budgeted rate Actual rate

20.00 21.00

4. Standard quantity of direct materials allowed Standard quantity allowed per output Output Standard quantity of direct materials allowed 3.00 4000.00 12000.00

5. Actual quantity of direct materials used Direct material efficiency variance Budgeted rate (Actual units used - standard units used) Direct material efficiency variance unfavorable (Given Budgeted rate Standard quantity of materials used Actual units used

2500.00 5.00 12000.00 12500.00

6. Actual quantity of direct materials purchased Material price variance Actual quantity purchased (Actual price - Budgeted price) Material price variance - Unfavorable (Given) Purchase of direct materials Budgeted price Actual quantity of direct materials purchased

3250.00 68250.00 5.00 1 3000.00

7. Actual direct material price per pound

Actual quantity of direct materials purchased Purchase cost Actual direct material price per pound

13000.00 68250.00 5.25