Question

Write on the worksheet and show all your work

Circle the correct answer

BUAC – 20B Managerial Accounting

Extra Credit Worksheet – 7 points

Information Part 1

Hanson Inc. has the following direct materials standard to manufacture one Zippy:

1.5 pounds per Zippy at $4.00 per pound

Last week, 1,700 pounds of materials were purchased and used to make 1,000 Zippies.

The materials cost a total of $6,630.

How many pounds of materials should Hanson have used to make 1,000 Zippies?

a.1,700 pounds

b.1,500 pounds

c.1,200 pounds

d.1,000 pounds

Hanson’s materials quantity variance (MQV) for the week was:

a.$170 unfavorable

b.$170 favorable

c.$800 unfavorable

d.$800 favorable

Hanson’s materials price variance (MPV) for the week was:

a.$170 unfavorable

b.$170 favorable

c.$800 unfavorable

d.$800 favorable

Information Part 2

Hanson Inc. has the following direct labor standard to manufacture one Zippy

            1.5 standard hours per Zippy at $12.00 per direct labor hour

Last week, 1,550 direct labor hours were worked at a total labor cost of $18,910 to make 1,000 Zippies.

Hanson’s labor rate variance (LRV) for the week was:

a. $310 unfavorable

b. $310 favorable

c. $300 unfavorable

d. $300 favorable

Hanson’s labor efficiency variance (LEV) for the week was:

a. $590 unfavorable.

b. $590 favorable.

c. $600 unfavorable.

d. $600 favorable

Information Part 3

Hanson Inc. has the following variable manufacturing overhead standard to manufacture one Zippy:

1.5 standard hours per Zippy at $3.00 per direct labor hour

Last week, 1,550 hours were worked to make 1,000 Zippies, and $5,115 was spent for variable manufacturing overhead.

Hanson’s rate variance (VMRV) for variable manufacturing overhead for the week was:

a.$465 unfavorable

b.$400 favorable

c.$335 unfavorable

d.$300 favorable

Hanson’s efficiency variance (VMEV) for variable manufacturing overhead for the week was:

a.$435 unfavorable

b.$435 favorable

c.$150 unfavorable

d.$150 favorable

Answer 1

Part 1

How many pounds of materials should Hanson have used to make 1,000 Zippies?

Correct Answer (b) 1,500 pounds

Hanson’s materials quantity variance (MQV) for the week was:

Correct Answer (c ) $800 unfavorable

Hanson’s materials price variance (MPV) for the week was:

Correct Answer (b) $170 favorable

Part 2

Hanson’s labor rate variance (LRV) for the week was:

Correct Answer (a) $310 unfavorable

Hanson’s labor efficiency variance (LEV) for the week was:

Correct Answer (c ) $600 unfavorable.

Part 3

Hanson’s rate variance (VMRV) for variable manufacturing overhead for the week was:

Correct Answer (a) $465 unfavorable

Hanson’s efficiency variance (VMEV) for variable manufacturing overhead for the week was:

Correct Answer (c ) $150 unfavorable

Working for solving above answers

Actual DATA for		1000	units
	Quantity (AQ)	Rate (AR)	Actual Cost
Direct Material	1700	$              3.900	$             6,630.00
Direct labor	1550	$              12.20	$           18,910.00
Variable Overhead	1550	$                3.30	$             5,115.00
Standard DATA for		1000	units
	Quantity (SQ)	Rate (SR)	Standard Cost
Direct Material	1500	$                4.00	$             6,000.00
Direct labor	1500	$              12.00	$           18,000.00
Variable Overhead	1500	$                3.00	$             4,500.00

Material Price Variance
(	Standard Rate	-	Actual Rate	)	x	Actual Quantity
(	$                        4.00	-	$                       3.90	)	x	1700
	170
	Variance		170			Favorable-F
Material Quantity Variance
(	Standard Quantity	-	Actual Quantity	)	x	Standard Rate
(	1500	-	1700	)	x	$                           4.00
	-800
	Variance		800			Unfavorable-U

Labor Rate Variance
(	Standard Rate	-	Actual Rate	)	x	Actual Labor Hours
(	$                     12.00	-	$                    12.20	)	x	1550
	-310
	Variance		310			Unfavorable-U
Labor Efficiency Variance
(	Standard Hours	-	Actual Hours	)	x	Standard Rate
(	1500	-	1550	)	x	$                        12.00
	-600
	Variance		600			Unfavorable-U

Variable Overhead Rate Variance
(	Standard Rate	-	Actual Rate	)	x	Actual Labor Hours
(	$                        3.00	-	$                       3.30	)	x	1550
	-465
	Variance		465			Unfavorable-U
Variable Overhead Efficiency Variance
(	Standard Hours	-	Actual Hours	)	x	Standard Rate
(	1500	-	1550	)	x	$                           3.00
	-150
	Variance		150			Unfavorable-U