should be in Ecel

E10-4

Prepare flexible budget reports for manufacturing overhead costs, and comment on findings.

(LO 2), AN

Using the information in E10-3, assume that in July 2017, Myers Company incurs the following

manufacturing overhead costs.

Variable Costs		Fixed Costs
Indirect labor	$8,800	Supervision	$4,000
Indirect materials	5,800	Depreciation	1,200
Utilities	3,200	Property taxes	800

Instructions

(a)

Prepare a flexible budget performance report, assuming that the company worked 9,000 direct

labor hours during the month.

(b)

Prepare a flexible budget performance report, assuming that the company worked 8,500 direct

labor hours during the month.

(c)

Comment on your findings.

E11-5

Compute materials price and quantity variances.

(LO 2), AP

The standard cost of Product B manufactured by Pharrell Company includes three units of direct

materials at $5.00 per unit. During June, 29,000 units of direct materials are purchased at a cost

of $4.70 per unit, and 29,000 units of direct materials are used to produce 9,400 units of Product

B.

Instructions

(a)

Compute the total materials variance and the price and quantity variances.

(b)

Repeat a, assuming the purchase price is $5.15 and the quantity purchased and used is 28,000

units.

E11-6

Compute labor price and quantity variances.

(LO 3), AP

Lewis Company's standard labor cost of producing one unit of Product DD is 4 hours at the rate

of $12.00 per hour. During August, 40,600 hours of labor are incurred at a cost of $12.15 per

hour to produce 10,000 units of Product DD.

Instructions

(a)

Compute the total labor variance.

(b)

Compute the labor price and quantity variances.

(c)

Repeat b, assuming the standard is 4.1 hours of direct labor at $12.25 per hour.

E11-7

Compute materials and labor variances.

(LO 2, 3), AP

Levine Inc., which produces a single product, has prepared the following standard cost sheet for

one unit of the product.

Direct materials (8 pounds at $2.50 per pound) $20

Direct labor (3 hours at $12.00 per hour) $36

During the month of April, the company manufactures 230 units and incurs the following actual

costs.

Direct materials purchased and used (1,900 pounds) $5,035

Direct labor (700 hours) $8,120

Instructions

Compute the total, price, and quantity variances for materials and labor.

E11-8

Compute the materials and labor variances and list reasons for unfavorable variances.

(LO 2, 3), AN

The following direct materials and direct labor data pertain to the operations of Laurel Company

for the month of August.

Costs		Quantities
Actual labor rate	$13 per hour	per hour Actual hours incurred and used	4,150 hours

Costs		Quantities
Actual materials price	$128 per ton	per ton Actual quantity of materials purchased and used	1,220 tons
Standard labor rate	$12.50 per hour	Standard hours used	4,300 hours
Standard materials price	$130 per ton	Standard quantity of materials used	1,200 tons

Instructions

(a)

Compute the total, price, and quantity variances for materials and labor.

(b)

Provide two possible explanations for each of the unfavorable variances calculated above, and

suggest where responsibility for the unfavorable result might be placed.