Question

Ralston Inc. has provided the following information. Use it to answer #1-4. Give all variances as a positive number. Round ONLY your final answer to dollars.

HINT: first correctly identify your variables as per the study guide

                                                                    

                                                                                             Per Unit

Standards:                                                                                                                                     

Direct Materials 10 lb @ $2.60/lb 26

Direct Labor 2 hours @ $22.50/hr 45

Variable Overhead 2 hours @ $18/hr 36

Fixed Overhead 25

                                                                        Total 132

Budgeted Production = 7,000 Units

Actual Results

Material Purchased 74,959 lbs $192,200

Material Used 74,600 lbs

Direct Labor 15,530 actual hours $339,500

Variable Overhead $286,600

Fixed Overhead $171,400

Units Produced 7,400 Units

1. Compute the variable efficiency variance.

2. Denote whether each variance above was favorable or unfavorable.

- A. B.       Direct Material Price Variance - A. B.       Direct Material Quantity Variance - A. B.       Direct Labor Rate Variance - A. B.       Direct Labor Efficiency Variance - A. B.       Variable Overhead Rate Variance - A. B.       Variable Overhead Efficiency Variance

A. Favorable B. Unfavorable

3. Give the complete formula describing what costs would be debited to Work-in-Process in a standard costing system. .e. _________ price x _________ quantity for ____________

4. To what account would any variance ultimately be charged in a standard costing system? Correct answer is NOT the variance accounts.

Answer 1