Question

Q14-Q18 are based on this case: XTi Co. gathered the following actual results for the current month: Actual Units produced                                                                             1,200 Direct materials purchased 6,400 lbs. @ $11 per lb for $70,400; and used 5,800 lbs. Direct labor cost (2,150 hours @$22 per hour)                              $47,300 Manufacturing overhead costs incurred: $19,350 Variable and $9,650 Fixed overhead. The Static original budgeted production was 1,000 units. The Input standards were:                                                                            Std Quantity   x   Std Price per input =Std Cost per Output U Direct materials                                                       5 lbs./Output unit x   $10/lb. Direct labor                                                            2 hrs./Output unit x $20/hr.     Variable manufacturing overhead                         2 Direct labor hrs x $8 per hr = $16 per unit Fixed mfg. overhead [Budget $10,000]               2 Direct labor hrs x $5 per hr = $10 per unit

Q14. What is the direct materials quantity variance? ____

A. $4400U                B. 2000F           C. 6400U              D. 5800U              E. None of these.

Q15. What is the direct labor efficiency variance? _____

A. $5000F                 B. 700F             C. 4300U              D. 2000F               E. None of these.

Q16. What is the fixed overhead production volume variance? _____   

A. $200F                   B. 350F             C. 200U                 D. 2000F               E. None of these.

Q17. What is the variable overhead controllable variance? _____

A. 2,000F                  B. $150U          C. 2150U              D. 4300U              E. None of these.

Q18. What is the direct materials price variance? ____

A. $2000F                 B. 5800U          C. 4400U              D. 6400 U              E. None of these.

Q19. What is the total overhead controllable variance? _____

A. $150U                  B. 2,000F          C. 2200F               D. 4300U              E. None of these.

Q 20.  What is the direct labor rate variance? _____

A. $4,800U               B. 4,000U         C. 4,300U             D. 2,400U             E. None of these.

Answer 1

14). Direct Material Qty Variance for purchases = (Std Qty for actual output - Actual qty)*Std rate
= (5 lbs *1200 - 6400) * $10 = (6000 - 6400) *10 = $4000 U

Direct Material Qty Variance for usage = (Std Qty for actual output - Actual qty)*Std rate
= (5 lbs *1200 - 5800) * $10 = (6000 - 5800) *10 = $2000 F

18). Direct Material price variance = (Std rate - Actual rate)*Actual qty used
= (10 -11)*5800 = $5800 U

15). Direct Labour efficiency variance = (Std hrs for actual production - Actual hrs)*Std rate
= (2hrs * 1200 - 2150) * $20 per hr = (2400 - 2150)*20 = 5000 F

20). Direct Labour rate variance = (Std rate per hr - Actual rate per hr)*Actual hrs
= (20 - 22) * 2150 = $4300 U

16). Fixed overhead production volume variance = Absorbed fixed overhead - Budgeted fixed overhead
= (Std overhead rate per unit * Acutal units) - Budgeted fixed overhead
= ($10* 1200 units) - $10000 = $2000 F

17). Variable overhead controllable variance = Actual variable overhead - Variable ovehead as per standard
= $19350 - (1200*16) = 19350 - 19200 = $150 U