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Week 12 Assignment Chapter 8

This document provides two cost accounting assignments involving the calculation of various variances. The first assignment involves calculating material quantity, price, labor efficiency, and rate variances for Hernandez Corporation. The second assignment involves calculating materials purchase price, quantity, labor rate, and efficiency variances for Rhodes Corporation. Students are instructed to show whether each variance is favorable or unfavorable and submit their work in Microsoft Word or Excel by a specified deadline.

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tucker jacobs
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137 views

Week 12 Assignment Chapter 8

This document provides two cost accounting assignments involving the calculation of various variances. The first assignment involves calculating material quantity, price, labor efficiency, and rate variances for Hernandez Corporation. The second assignment involves calculating materials purchase price, quantity, labor rate, and efficiency variances for Rhodes Corporation. Students are instructed to show whether each variance is favorable or unfavorable and submit their work in Microsoft Word or Excel by a specified deadline.

Uploaded by

tucker jacobs
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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Cost Accounting

Spring, 2021

Week 12 Assignment-Chapter 8

Must be submitted in the Week 13 Dropbox by EOD Sunday, Apr 18, 2021. Also. MUST be in Microsoft Word or Excel. No
other formats will be accepted including handwritten reports.

1. Hernandez Corporation uses a standard cost system and has established the following standards for
one unit of product:

Standard Standard Standard


Quantity Price Cost
Direct materials 10 pounds $2.60 per pound $26.00
Direct labor .25 hour $10.00 per hour 2.50
$28.50
During October, the company purchased 240,000 pounds of material at a total cost of $588,000. The total
factory wages for October were $49,400. During October, 21,000 units of product were manufactured
using 211,000 pounds of material and 5,200 direct labor hours. Material quantity and price variances are
recorded when materials are used.

a. Compute the material quantity and labor efficiency variances.


b. Compute the material price and labor rate variances.
Show whether each of the above variances was either favorable or unfavorable.

2. Rhodes Corporation manufactures a product with the following standard costs:


Direct materials (20 yards @ $1.85 per yard) $ 37.00
Direct labor (4 hours @ $12.00 per hour) 48.00
Variable factory overhead (4 hours @ $5.40 per hour) 21.60
Fixed factory overhead (4 hours @ $3.60 per hour) 14.40
Total standard cost per unit of output $121.00

Standards are based on normal monthly production involving 2,000 direct labor hours (500 units of
output).

The following information pertains to the month of July:

Direct materials purchased (16,000 yards @ $1.80 per yard) $28,800


Direct materials used (9,400 yards)
Direct labor (1,880 hours @ $12.20 per hour) 22,936
Actual factory overhead 16,850
Actual production in July: 460 units

Compute the following variances for the month of July, indicating whether each variance is
favorable or unfavorable:

(1) Materials purchase price variance


(2) Materials quantity variance
(3) Labor rate variance
(4) Labor efficiency variance

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