Solutions for chapter 11

Problem 1:
a ) Material Price Variance
= $5,700 unfavorable
Material Quantity Variance = $23,484 unfavorable
Problem 2:
a) Material Price Variance = = $4,050 favorable
Material Quantity Variance = =
$2,365 unfavorable
Problem 3:
a)
October
Labor Rate
Variance
(AR - SR) AH
Labor Efficiency
Variance
(AH - SH) SR

Novembe
r
December

$360 F $1,175 U
$750 U

$675 U

$1,580 U
$450 U

Problem 4:
a) Labor Rate Variance
: = $6,300 unfavorable
Labor Efficiency Variance
= $11,550 favorable
b)
Contribution margin per website

435

c)
Actual contribution margin per Web site

470

Problem 5:
a) Standard Cost per unit:

= $28.45

b) Material Price Variance

=
$40,000 unfavorable
Material Quantity Variance =
$14,400 unfavorable
Labor Rate Variance
=
$26,364 favorable
Labor Efficiency Variance
= $5,864 unfavorable
Controllable Overhead Variance = $50,000 unfavorable
Overhead Volume Variance
= $8,250 favorable

Problem 6:
a) Standard Cost per unit:
b)

= $69.25

Material Price Variance

= $ 27,500 unfavorable
Material Quantity Variance
= $10,625 unfavorable
Labor Rate Variance
= $68,409 favorable
Labor Efficiency Variance
=
$39,059 unfavorable
Controllable Overhead Variance =$4,200 unfavorable
Overhead Volume Variance = $875 unfavorable

Problem 7:
a) Standard overhead rate per unit =$11.60
Material Price Variance
=$2.13 per pound
Material Quantity Variance
= 37,500 pounds
b) Labor Rate Variance
= $10.62 per hour
Labor Efficiency Variance
= 36,000 hours
Controllable Overhead Variance = $3,000 favorable
Overhead Volume Variance =
$18,000 favorable
c.

Variance Summary
Material price variance
Material quantity variance
Labor rate variance
Labor efficiency variance
Controllable overhead variance
Overhead volume variance
Total

($15,000) favorable
3,125 unfavorable
22,000 unfavorable
(7,000) favorable
(3,000) favorable
(18,000) favorable
($17,875) favorable

Problem 8:
a) Attorneys -- Business Incorporations
Labor rate variance

$1,380

Labor efficiency
variance

$1,000

b) Attorneys--Will Preparation

Labor rate variance =

Labor efficiency variance =

$190
$1,225

U
F

c) Paralegals -- Business Incorporations

Labor rate variance
Labor efficiency variance

d.
Preparation

Labor rate variance =

Labor efficiency variance =

$270
$950

U
F

Paralegals -- Will

$475 U
$125
U

Problem 9:
a) Material Price Variance (Material A) =
$4,625 favorable
Material Price Variance (Material B ) =
$1,000 favorable
Material Quantity Variance (Material A) = $1,365
unfavorable
Material Quantity Variance (Material B) =
$825
unfavorable
Labor Rate Variance
= $900 unfavorable
Labor Efficiency Variance
= $600 unfavorable
Controllable Overhead Variance
= $2,000 favorable
Overhead Volume Variance
=$4,000
unfavorable
Variance Summary
Material price variance (A)
$(4,625)
favorable
Material price variance (B)
(1,000)favorable
Material quantity variance (A) 1,365unfavorable
Material quantity variance (B)
825unfavorable
Labor rate variance
900unfavorable
Labor efficiency variance
600unfavorable
Controllable overhead variance (2,000)favorable
Overhead volume variance
4,000unfavorable
Total
$65unfavorable

Problem 10

a)

Standard cost per unit = $40.00

Material Price Variance = $12,500 unfavorable
Material Quantity Variance = $125,000 unfavorable
Labor Rate Variance= $47,541 unfavorable
Labor Efficiency Variance= = $39,959 unfavorable
Controllable Overhead Variance =
Overhead Volume Variance = =

b.

$355,000 favorable
$5,000 unfavorable

Variance Summary

Material price variance

$12,500
unfavorable
Material quantity variance
125,000unfavorable
Labor rate variance
47,541unfavorable
Labor efficiency variance
39,959unfavorable
Controllable overhead variance (355,000)
favorable
Overhead volume variance
5,000unfavorable
Total
$(125,000)
favorable

Problem 11
Labor Rate Variance = $5,100 unfavorable
Labor Efficiency Variance = $333 unfavorable
Problem 14:
a. Labor rate variance =
$8,000 favorable
Labor efficiency variance = $6,000 unfavorable
b.

Controllable overhead variance = $19,600 unfavorable

Overhead volume variance = $2,885 unfavorable
Applied overhead
= 292,115
Flexible budget overhead
= $295,000