Question

1. Craydye makes all sorts of moldings. Its standard quantity of material allowed is 1.1 foot of wood per 1 foot of molding at a standard price of $3.37 per foot. During August, it purchased 220,032 feet of wood at a cost of $3.71 per foot, which produced only 202,646 feet of molding. Calculate the materials price variance.

2. During June, Cisco Company produced 1,323 chainsaw blades. The standard quantity of material allowed per unit was 1.88 pounds of steel per blade at a standard cost of $8.44 per pound. The actual cost was $9.18 per pound. The actual pounds of steel that Cisco purchased were 2,852 pounds. All materials purchased were used. Calculate Cisco's materials usage variance.

3.

Bortello Corporation produces high-quality leather boots. The company has a standard cost system and has set the following standards for materials and labor:​

Leather (10 strips @ $10.79)

Direct labor (14 hours @ $16.14)

​During the year Bortello produced 198 boots. There were no beginning or ending inventories of leather. Compute the costs of leather that should have been incurred for the production of 198 boots.

4.

Anemone Company produces picture frames. During the year, 200,000 picture frames were produced. Materials and labor standards for producing the picture frames are as follows:​

Direct materials (2 pieces of wood @ $3.27)

Direct labor (2 hours @ $13)

​Anemone purchased and used 600,000 pieces of wood at $4.00 each, and its actual labor hours were 311,750 hours at a wage rate of $14.28.

​What is Anemone's labor rate variance?

5.

Blue Company produces picture frames. During the year, 200,000 picture frames were produced. Materials and labor standards for producing the picture frames are as follows:​

Direct materials (2 pieces of wood @ $3)

Direct labor (2 hours @ $14.28)

​Blue purchased and used 600,000 pieces of wood at $2.5 each, and its actual labor hours were 400,461 hours at a wage rate of $15.91.

​What is Blue's total labor variance?

Answer 1

1)	Standard (1 foot)				Standard (202646 feet)				Actual (202646 feet)
	Qty	Price	Amount		Qty	Price	Amount		Qty	Price	Amount
	1.1	$      3.37	$      3.71		222910.6	$      3.37	$     751,208.72		220032	$      3.71	$     816,318.72
	Material Price Variance			=	(Standard Price - Actual Price) x Actual Quantity
				=	($ 3.37 - $ 3.71) x 220032
				=	$   74,810.88	(U)

2)	Standard (1 unit)				Standard (1323 units)				Actual (1323 units)
	Qty	Price	Amount		Qty	Price	Amount		Qty	Price	Amount
	1.88	$      8.44	$   15.87		2487.24	$      8.44	$       20,992.31		2852	$      9.18	$       26,181.36
	Material Usage Variance			=	(Standard Quantity - Actual Quantity) x Standard Price
				=	(2487.24 - 2852) x $ 8.44
				=	$     3,078.57	(U)

3)	Cost of leather		=	198 x 10 x $ 10.79
			=	$ 21,364.20

4)	Standard (1 unit)				Standard (200000 units)				Actual (200000 units)
	Hours	Rate	Amount		Hours	Rate	Amount		Hours	Rate	Amount
	2	$   13.00	$   26.00		400000	$    13.00	$ 5,200,000.00		311750	$    14.28	$ 4,451,790.00
	Labor Rate Variance			=	(Standard Rate - Actual Rate) x Actual Hours
				=	($ 13 - $ 14.28) x 311750
				=	$ 399,040.00	(U)

5)	Standard (1 unit)				Standard (200000 units)				Actual (200000 units)
	Hours	Rate	Amount		Hours	Rate	Amount		Hours	Rate	Amount
	2	$   14.28	$   28.56		400000	$    14.28	$ 5,712,000.00		400461	$    15.91	$ 6,371,334.51
	Total Labor Variance			=	Standard Cost - Actual Cost
				=	$ 5712000 - $ 6371334.51
				=	$ 659,334.51	(U)