Managerial Accounting Exercises Chapter 12
Managerial Accounting Exercises Chapter 12
Managerial Accounting Exercises Chapter 12
1-2. Flying High Company manufactures model airplanes. During the month, it manufactured 10,000 airplanes.
Each one used an average of 6.5 direct labor hours and an average of 1.5 sheets of aluminum. It normally
manufactures 7,500 airplanes. Materials and labor standards for making the airplanes are:
2. Compute the standard number of sheets of aluminum allowed for a volume of 10,000 airplanes.
a. 15,000 sheets
b. 10,000 sheets
c. 7,500 sheets
d. 11,250 sheets
3. During the month of March, Baker's Express purchased 10,000 pounds of flour at $1 per pound. At the end of March,
Baker's Express found that it had an unfavorable materials price variance of $500. The standard cost per pound must be
a. $1.95
b. $1.00
c. $1.05
d. $0.95
4. During the month of March, Baker's Express purchased 10,000 pounds of flour at $1 per pound. At the end of
March, Baker's Express found that it had a favorable materials price variance of $500. The standard cost per
pound must be
a. $0.95
b. $1.00
c. $1.05
d. $1.95
5. During June, Cisco Company produced 12,000 chainsaw blades. The standard quantity of material allowed per
unit was 1.5 pounds of steel per blade at a standard cost of $8 per pound. Cisco determined that it had a
favorable materials usage variance of $1,000 for June. Calculate the actual quantity of materials Cisco used.
a. 17,875 pounds
b. 12,125 pounds
c. 11,875 pounds
d. 18,125 pounds
6. During June, Cisco Company produced 12,000 chainsaw blades. The standard quantity of material allowed per
unit was 1.5 pounds of steel per blade at a standard cost of $8 per pound. The actual cost was $7 per pound. The
actual pounds of steel that Cisco purchased were 19,500 pounds. All materials purchased were used. Calculate
Cisco's materials usage variance.
a. $10,500 U
b. $12,000 F
c. $12,000 U
d. $10,500 F
7. Perfect Builders makes all sorts of moldings. Its standard quantity of material allowed is 1 foot of wood per 1
foot of molding at a standard price of $2.00 per foot. During August, it purchased 500,000 feet of wood at a cost
of $1.90 per foot, which produced only 499,000 feet of molding. Calculate the materials price variance and the
materials usage variance, respectively.
a. $50,000 F and $2,000 U
b. $49,900 U and $2,000 F
c. $50,000 F and $1,900 U
d. $49,900 F and $1,900 U
8. Mover Company has developed the following standards for one of its products:
The company records materials price variances at the time of purchase. The variable standard cost per unit for
materials and labor is
a. $98.
b. $84.
c. $74.
d. $38.
9. Roberts Company uses a standard costing system. The following information pertains to direct materials for the
July:
10. During August, 10,000 units were produced. The standard quantity of material allowed per unit was 10
pounds at a standard cost of $3 per pound. If there was an unfavorable usage variance of $18,750 for August, the
actual quantity of materials used must be
a. 106,250 pounds.
b. 93,750 pounds.
c. 31,875 pounds.
d. 23,438 pounds.
11. During September, 40,000 units were produced. The standard quantity of material allowed per unit was 5
pounds at a standard cost of $2.50 per pound. If there was a favorable usage variance of $25,000 for September,
the actual quantity of materials used must have been
a. 210,000 pounds.
b. 190,000 pounds.
c. 105,000 pounds.
d. 95,000 pounds.
12. Max Company has developed the following standards for one of its products.
The company records materials price variances at the time of purchase. The direct materials price variance is
a. $50,000 F.
b. $50,000 U.
c. $10,000 U.
d. $10,000 F.
Figure 10-3.
Bortello Corporation produces high-quality leather boots. The company has a standard cost system and has set
the following standards for materials and labor:
During the year Bortello produced 125 boots. Actual leather purchased was 1,700 strips, at $16 per strip. There
were no beginning or ending inventories of leather. Actual direct labor was 1,500 hours at $15 per hour.
13. Refer to Figure 10-3. Compute the materials price variance and the materials usage variance, respectively.
a. $9,000 F and $1,200 U
b. $9,300 U and $1,500 F
c. $6,800 F and $4,000 U
d. $6,800 U and $4,000 F
14. Refer to Figure 10-3. Calculate the labor rate variance and the labor efficiency variance, respectively.
a. $4,500 U and $3,000 U
b. $4,500 F and $3,000 F
c. $4,500 U and $3,000 F
d. $4,500 F and $3,000 U
15. Refer to Figure 10-3. Compute the total budget variances for materials and labor, respectively.
a. $2,800 F and $7,500 F
b. $2,800 F and $7,500 U
c. $2,800 U and $7,500 U
d. $2,800 U and $7,500 F
16. Refer to Figure 10-3. Compute the costs of leather and direct labor that should have been incurred for the
production of 125 boots.
a. $36,000 and $36,000
b. $46,500 and $37,500
c. $37,200 and $20,000
d. $30,000 and $15,000
Figure 10-5.
Seaside Company produces picture frames. During the year 190,000 picture
frames were produced. Materials and labor standards for producing the picture
frames are as follows:
Seaside purchased and used 400,000 pieces of wood at $2.00 each and its actual
labor hours were 360,000 hours at a wage rate of $10.50.
17. Refer to Figure 10-5. What is the materials price variance?
a. $100,000 F
b. $112,500 U
c. $135,000 F
d. $170,000 U
21-22. Harnish Corporation is developing standards for its products. One product requires an input that is
purchased for $55.00 per kilogram from the supplier. By paying cash, the company gets a discount of 8% off this
purchase price. Shipping costs from the supplier's warehouse amount to $5.17 per kilogram. Receiving costs are
$0.28 per kilogram. Each unit of output of the product requires 0.75 kilogram of this input. The allowance for
waste and spoilage is 0.04 kilogram of this input for each unit of output. The allowance for rejects is 0.11 kilogram
of this input for each unit of output.
21. The standard price per kilogram of this input should be:
A. $55.00
B. $56.05
C. $53.95
D. $64.85
22. The standard quantity in kilograms of this input per unit of output should be:
A. 0.75
B. 0.71
C. 0.90
D. 0.60
23-24. Schoenfeld Corporation is developing direct labor standards. The basic direct labor wage rate is $10.00 per
hour. Employment taxes are 9% of the basic wage rate. Fringe benefits are $3.71 per direct labor-hour. A
particular product requires 0.88 direct labor-hours per unit. The allowance for breaks and personal needs is 0.06
direct labor-hours per unit. The allowance for cleanup, machine downtime, and rejects is 0.09 direct labor-hours
per unit.
25-28. Reenu Company manufactures wigs out of used dental floss. The variable cost standards for wig production
developed by Reenu are as follows:
Variable overhead at Reenu is based on direct labor-hours. The actual results for the month of October were as
follows: