Question

1. We are analyzing 2 products – product X and product Y.
   • Product X requires 3 Part As and 4 Part B’s.
   • Product Y requires 2 Part A’s and 3 Part B’s.
   • The standard cost for Part A is $12 per unit.
   • The standard cost for Part B is $24 per unit.
   • During this month, the company purchased 50,000 units of Part A for $587,500 (there was no beginning balance).
   • During this month, the company purchased 100,000 units of Part B for $2,500,000 (there was no beginning balance).
   • During the month the company produced 500 Xs and 1000 Ys.
   • During the month the company used 3550 units of Part A and 4975 units of Part B.
   • Factory payroll was $393,000 with 19,500 hours (this is actual - direct labor only).
   • X uses 12 standard direct labor hours.
   • Y uses 14 standard direct labor hours.
   • Labor standard cost is $20 per hour.

hint: for production of both X and Y

Questions: Suggestion: Use a scratch paper to solve all the variances first, then answer the questions.

1) DL - Total Variance

2) DL - Actual Cost (total)

3) A - Use (Quantity) Variance

4) A - Use (Quantity) Variance (Fav/Unf)

5) Rate (Labor Price) Variance (Fav/Unf)

6) A - Direct Material Total Variance

7) B - Use Variance (Fav/Unf)

8) A - Price Variance

9) A - Actual Cost (Total)

10) DL Total Variance (Fav/Unf)

11) DL - Efficiency (Labor Quantity) Variance (Fav/Unf)

12) DL - Flex budget

13) B - Price Variance (Fav/Unf)

14) B - Standard Cost (Total)

15) A - Standard Cost (Total)

16) DL Efficiency Variance (Labor Quantity)

17) B - Direct Material total variance

18) A - Price variance (Fav/Unf)

19) A - Flex budget

20) B - Direct Material Total Variance (Fav/ Unf)

21) B - Price variance

22) Rate variance (Labor price)

23) A - Direct material Total Variance ( Fav/Unf)

24) B - Use ( Quantity) variance

25) DL - Standard cost (Total)

Answer 1