06 Standard Costing KEY PDF

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Chapter 6 Standard Costing Answer Key TRUE OR FALSE I 1 2 3 4 5 6 7 8 9 10 FALSE TRUE TRUE TRUE FALSE TRUE FALSE FALSE TRUE FALSE 11 12 13 14 15 16 17 18 19 20 TRUE TRUE FALSE TRUE FALSE FALSE TRUE TRUE TRUE FALSE 21 22 23 24 25 26 27 28 29 30 TRUE TRUE FALSE TRUE FALSE FALSE FALSE TRUE FALSE TRUE 3...

Description

Chapter 6 Standard Costing Answer Key TRUE OR FALSE

I 1 2 3 4 5 6 7 8 9 10

FALSE TRUE TRUE TRUE FALSE TRUE FALSE FALSE TRUE FALSE

11 12 13 14 15 16 17 18 19 20

TRUE TRUE FALSE TRUE FALSE FALSE TRUE TRUE TRUE FALSE

21 22 23 24 25 26 27 28 29 30

TRUE TRUE FALSE TRUE FALSE FALSE FALSE TRUE FALSE TRUE

31 32 33 34 35 36 37 38 39 40

FALSE FALSE TRUE TRUE TRUE TRUE TRUE FALSE FALSE FALSE

MULTIPLE CHOICE QUESTIONS

II 1 2 3 4 5 6 7 8 9 10

C C NO #3 A A B A D C B

11 12 13 14 15 16 17 18 19 20

C D C B C A B A C B

21 22 23 24 25 26 27 28 29 30

A D D C B C A A C C

31 32 33 34 35

D B C D C

MULTIPLE CHOICE PROBLEMS

III 1

A

P3,200 FAV

(AQ - SQ ) X SP = [ 11,200 - (6,000 x 2)] x P4 =

2

B

P6,400 FAV

Actual direct labor cost Std. allowed at Std rate = 2,400 x 2 hrs x P12 = Total direct labor variance

51,200.00 57,600.00 (6,400.00) favorable

3

B

P400 FAV

Actual cost (AR x AH) Stabdard cost at actual hours = SR x AH = P5 x 4,000 = Rate variance favorable

19,600.00 20,000.00 (400.00) favorable

4

C

P19 / dlh

Actual cost = AR x AH * ? X 8,400 hrs =

159,600.00

Standard cost at actual hours = SR x AH P18 x 8,400 = Direct labor rate variance - unfavorable

151,200.00 8,400.00

*P159,600 / 8,400 hours = P19

(3,200.00) favorable

per direct labor hour

+

5

B

P2,000

Let X as the overhead variance P4,000 + 2X + X = P10,000 3X = P6,000 X = P6,000 / 3 =

2,000.00

6

B

(AP - SP ) X AQ

7

C

(AQ - SQ ) X SP

8

D

P6.00

P900 / 150 =

6.00

9

B

P.40

P6,000 / 15,000 =

0.40

10

D

P11.00

Actual price Favorable variance per unit = P80,000 / 40,000 units = Standard price per unt

11

C

P150 F

Materials price variance - fav Materials quantity variance - unfav Total materials variance - fav

600.00 (450.00) 150.00

12

B

P1,200 U

MPV = (AP - SP) X AQ = (P6 - P6.60 ) x 2,000 =

1,200.00

13

A

P1,200 U

MQV = (AQ - SQ ) x SP = (2,000 - 1,800) x P6.00 =

1,200.00

14

A

P2,400 U

MPV = (AP - SP) X AQ = (P6 - P6.60 ) x 2,000 = MQV = (AQ - SQ ) x SP = (2,000 - 1,800) x P6.00 = TOTAL VARIANCE - UNFAVORABLE

1,200.00 1,200.00 2,400.00

15

B

P420 FAV

16

A

14,000 hours

MPV = (AP - SP) x SQ = [(P10,080 / 4,200) - P2.50] X 4,200 = (P2.40 - P2.50) x 4,200 = Standard hours allowed = actual production x std. hours per unit actual units = 4,000 Standard hours per unit 3.5 hours

17 A

P4,500 unf P10,000 fav

Standard price P100,000 / 50,000 = P2.00 MPV (P2.10 - P2.00) x 45,000 = P4,500 unf MQV = (50,000 - 45,000) x P2.00 = P10,000 fav

18 D

P121,800

P5.80 x 21,000 = P121,800

19 A

P195,000

SOHR = P1.00 + P4.00 = P5.00 x 39,000 = P195,000

20 D

P12,000 underabsorbed

FOH 90% activity = 24,000 x P6.50 = FOH Applied - 90% =24,000 x P6.00 = Underabsorbed FOH

9.00 2.00 11.00

420.00

14,000

121,800.00

156,000.00 144,000.00 12,000.00

21 C

P20,700 unf

Actual labor rate P241,500/34,500 Std. Labor rate P3,200 / (35,000 -34,500) Difference Actual direct labor hours Direct labor rate variance

22 A

P1,250 unf

M U V (2,300 - 2,100) x P6.25

23 D

P87,000

24 B

P1,100 favorable

7.00 6.40 0.60 34,500 20,700 1,250.00

FOH Applied P42,000 + P30,000 Add Underapplied FOH Actual FOH

72,000 15,000 87,000

MPV = (AP - SP) x AQ = = (P1.20 - P1.25) x 22,000 units =

1,100.00 Fav.

25 B

P6.00

Direct materials standard cost per unit = 2 lbs x P3.00 =

26 A

P1,680 U

Labor rate variance = (AR - SR ) x AH = (P24.40 - P24 ) X 4,200 =

27 D 28 A

29 D

30 A

6.00

1,680.00 Unf.

materials quantity variance is a responsibility of the production department. 120,000 lbs

P6,000 U

P3,000 UF

MQV = (AQ - SQ ) x SP P30,000 = [ AQ - (10 x 10,000 units)] x P1.50 P30,000 = (AQ - 100,000) x P1.50 = AQ = P180,000 / P1.50 =

LEV = (AH - SH) X SR = (6,300 - [3 x 2,000]) x P20 = (6,300 - 6,000) x P20 = Actual overhead Budgeted OH based on Standard: Fixed Overhead VOH applied = 24,000 x P6.00

120,000.00 lbs

6,000.00 Unfav

P220,000.00 1,000.00 unf P75,000.00 144,000.00

219,000.00 3,000.00 unf

Applied overhead = 24,000 x P9.00 = TOTAL VARIANCE 31 C

32 D

33 C

P520 unfav

P6,000 unf

11,120

216,000 4,000.00 unf

MQV = (AQ- SQ) x SP = (6,400 - [1000 x P6.00]) x P1.30 = (6,400 - 6,000) x P1.30 = Actual Factory OH BOH at std. Hours: Fixed VOH 32,000 x P5.00 Budget variance Std. Direct labor hours add Unfav. labor hours usage (P4,200 / P3.75) Actual hours

520.00 Unfav 230,000.00

64,000.00 160,000.00

224,000.00 6,000.00 10,000 1,120 11,120

unf

34 B

P3.45

35 B

P6,000 fav

Actual FOH (P73,000 + P17,000) FOH applied (P2.50 + P0.50 ) x 32,000 Total FOH variance

36 B

P2,000 fav

Actual price (P40,000 / 20,000) = P2.00 Materials price variance (P2.00 - P2.10) x 20,000

37 D

P6,000 unf

38 A

1,400

Standard purchase price per unit less Difference (P240 / 1,600) fav Actual purchase price per unit

3.60 0.15 3.45 90,000.00 96,000.00 (6,000.00) fav.

=

Actual Overhead Std. Overhead applied Total overhead variance

2,000.00 86,000.00 80,000.00 6,000.00 unf

Std. Hours allowed less favorable labor efficiency variance in ho P600/P6.00 Actual hours

1,500 100 1,400

CORRECTION FOR PROBLEM RELATED TO MC # 39 TO 47 Fixed overhead per hour, base on 11,990 hours instead of 11,900 hours. 39 A 40 C

41 B 42 A

P7,950 U P2,200 U

P6,330 U P6,930 U

Actual Variable OH P29,950.00 Budgeted overhead based on actual input P2.50 x 8,800 22,000.00 Applied Variable OH rate at standard quantity of input based on actual output P2.50 x (4,400 x 2.20 hrs.) = 24,200.00 Actual Fixed factory overhead Budgeted Fixed overhead - lumpsum 11,990 budgeted hours at P3.00 Appli ed Fixed factory overhead P3.00 x (4,400 x 2.2 hours)

P7,950 spending variance - unf

P2,200.00 efficiency variance - fav

P42,300.00 P6,330 fixed spending variance - unf 35,970.00 P6,930 fixed volume variance - unf 29,040.00

43 D 44 B 45 C

P14,280 U P2,200 U P6,930 U

Actual Factory OH P72.250.00 Budgeted overhead based on actual input Budgeted Fixed overhead - lumpsum 11,990 budgeted hours at P3.00 35,970.00 Variable overhead at actual hours P2.50 x 8,800 hours 22,000.00 Total budgeted OH 57,970.00 Budgeted Overhead based on Standard input allowed Budgeted Fixed overhead - lumpsum 11,990 budgeted hours at P3.00 35,970.00 Variable Overhead based on std allowed P2.50 x (4,400 x 2.2 hours) 24,200.00 60,170.00 Appli ed Fixed factory overhead (P2.50 + P3.00) x (4,400 x 2.2 hours) 53,240.00

46 D 47 C

P12,080 U P6,930 U

Actual Factory OH P72.250.00 Budgeted Overhead based on Standard input allowed Budgeted Fixed overhead - lumpsum 11,990 budgeted hours at P3.00 35,970.00 Variable Overhead based on std allowed P2.50 x (4,400 x 2.2 hours) 24,200.00 60,170.00 Appli ed Fixed factory overhead (P2.50 + P3.00) x (4,400 x 2.2 hours) 53,240.00

P14,280 spending variance - unf

P2,200 efficiency variance - fav

P6,930 fixed volume variance - unf

P12,080 controllable(budget) variance - unf

P6,930 fixed volume variance - unf

PROBLEMS 6.1 Actual overhead

196,000.00

Applied overhead = 40,000 hours at P5 per dlh

200,000.00

Total variance - favorable

(4,000.00)

6.2 a

Raw Materials Inventory

12,000.00

Materials Price Variance

300.00

Accounts Payable b

Work in Process Inventory ( 5,800 x P2*) Materials Quantity Variance Raw Materials Inventory (5,600 x P2) *P12,000 /6,000 units = P2.00

11,700.00 11,600.00 400.00 11,200.00

6.3 Ingredients

per 100 gallon

Lime CU drink

1,960 oz

Granulated sugar

amount

Standard

Standard

Standard

Standard

per gallon

waste

usage

Price

Cost

19.60

2.00%

20.00

0.1500

3.00

40 lbs

0.40

20.00%

0.50

0.6000

0.30

Blackberry fruit

63 pcs

0.63

10.00%

0.70

0.8000

0.56

Protein tablets

100 tablets

1.00

0.00%

1.00

0.9000

0.90

Water

4,000 oz

40.00

0.00%

40.00

0.0025

0.10

Standard cost per gallon

4.86

a

.98X = 19.60 ounces of cu drink =

X =

b

.80X = 40 pounds 0f sugar =

X =

20.00 0.50

c

.90X = .63 blackberry fruit =

X =

0.70

6.4 Actual cost (AP x AQ)

32,800 x P9.50 =

311,600.00

Adjusted cost (SP x AQ)

32,800 x P10.00 =

328,000.00

Standard cost ( SP x SQ)

32,000 x P10 =

320,000.00

P16,400 MPV Fa P8,000 MQV Un TOTAL VARIANCE =

8,400.00

6.5 Case 1

Case 2

Case 3

Case 4

Units produced standard hours per unit

800.00 3.00

750.00 0.80

240.00 2.00

1,500.00 3.00

standard hours allowed standard rate per hour

2,400.00 7.00

600.00 10.40

480.00 9.50

4,500.00 6.00

2,330.00 15,844.00

675.00 5,940.00

456.00 4,560.00

4,875.00 26,812.50

actual hours worked actual labor cost labor rate variance labor efficiency variance

P466 F P490 F

P1,080 F P780 U

P228 U P228 U

P2,437.5 F P2,250 U

Case 1 Standard hours allowed 800 x 3 = 2,400 LRV = AQ (AP - SP) P466 = 2,300(AP - P7.00) - 466 = 2,330AP - 16,100 16,100.00 LEV = SP (AQ - SQ)

AP =

Units produced Standard Price

600 / .80

=

2,330AP = 16,310 - 466

(16,310 - 466) /2,330 P7.00 (2,330 - 2,400)

15,844.00 490.00 Fav

AP =

Case 2

LEV = SP (AQ - SQ)

750.00 780 = SP(600 - 675)

10.40

780 = 75SP

Actual cost LRV = AQ(AP-SP)

-P1,080 = 675(AP-P10.40) -P1,080 = 675AP - P7,020 675AP = P7,020 - 1,080 675AP = P5,940 P5,940/675

5,940.00 =

P8.80

Case 3 2 hours

Standard hours allowed = 480 / 240 = 2 hours Actual hours worked LRV = AQ(AP-SP)

AQ[(4,560/AQ) - SP] P228 = AQ(P4,560 / AQ) - P9.50 P228 = AQ4,560 / AQ - P9.50 P228 = P4,560 - P9.50 AQ P228 - P4,560 = P9.50AQ 4,332.00

5,940.00 =

P8.80

= P9.50AQ

AQ

456.00

Labor efficiency variance LEV = SP (AQ - SQ) P9.50(456 - 480)

P9.50 x -24

(228.00)

P228 F

Case 4 Standard hours per unit 4,500 / 1,500 = 3 hours Actual labor rate = P26,812.5 / 4,875 hours 5.50 per hour

3 hours

Standard hours allowed LEV = SP(AQ-SQ) P2,250 = P6(4,875 - SQ) P2,250 = P29,250 - P6SQ - P27,000 = -P6SQ SQ Labor rate variance

P27,000 / P 6

LRV = AQ(AP - SP)

4,500 hours

4,500.00 4,875(P5.50 - P6.00)

4,875 x P.50

2,437.50

6.6 actual

physical units

results at

flexible

sales

(static)

actual

budgets

flexible

activity

master

prices

variances

budget

variances

budget

80,000.00

72,000.00

sales 806,400.00 less variable costs 496,000.00 equals contribution margine 310,400.00 less fixed costs 200,000.00 equals operating income 110,400.00

6,400.00 f 16,000.00 u (9,600.00) 8,000.00 u (17,600.00)

1 sales activity variance on physical units

800,000.00 480,000.00 320,000.00 192,000.00 128,000.00

8,000.00 f 48,000.00 u (40,000.00) (40,000.00) f

720,000.00 432,000.00 288,000.00 192,000.00 96,000.00

8,000.00

80,000- 72,000 =

2 flexible budget in sales

P720,000 / 72,000 = P10. per unit P10 x 80,000

800,000.00

3 Actual sales

P800,000 + P6,400 favorable variance

806,400.00

4 contribution margin at actual

P806,400- 496,000

310,400.00

5 Actual fixed costs

P192,000 + 8,000 unfavorable variance

200,000.00

6 Operating income 7 variable costs at budget

P310,400-200,000 as per No. 2

110,400.00

P480,000 / 800,000 = .60; P720,000 x .60

432,000.00

Sales were 8,000 units higher than originally budgeted. This higher sales volume should have been produced an operating income of P128,000 (up from P96,000 by P80,000 (1-.6) = P32,000). However, only P110,400 was achieved. Sales prices were higher by P6,400, but costs exceeded the flexible budget by P16,000 + P8,000 = P24,000

Actual operating income

110,400.00

Variances: Sales prices

favorable

6,400.00

sales volume

favorable

32,000.00

variable costs

unfavorable

(16,000.00)

unfavorable

(8,000.00)

fixed costs Master budgeted operating income

14,400.00 96,000.00

f

6.7 1 P3.00

The variable overhead rate is P.60, obtained by dividing P27,000 by 45,000 hrs P27,000 / 45,000

P.60 / dl rate P.20 =

3.00

2 50,250 hrs

Actual costs, P140,700 / (P3 - P.20) = 50,250 hrs

3 P10,050 f

50,250 actual hors x P.20 = P10,050

4 P145,650

Usage variance was P5,100 unfavorable. Therefore, excess hours must have been P5,100 / P3.00 = 1,700 hours Standard hours allowed must be 50,250 - 1,700 = 48,550 Flexible budget = 48,550 x P3.00 = P145,650

5 P470 u

Flexible budget = 48,550 x P.60 = P29,130 Total Variance = P30,750 - P29,130 = P1,620 u Rate variance = P1,620 - P1,150 = Efficiency variance of P470 unfavorable

6.8 A

B

C

D

E

( ) = FAV; UNF

direct materias

flexible budget based on actual costs incurred

flexible budget

standard inputs allowed for

total

actual inputs x actual

(A - C)

actual inputs at budgeted

(C - E)

actual outputs achieved x

variance ( B + D)

prices

PV

prices

QV

budgeted prices

3400 lbs x P.90 =

3400lbs x P1.00 =

3,060.00

direct labor

(340.00)

5500hrs x P3.80 = 20,900.00

Variable overhead

6.9

3,400.00

400.00

5500hrs x P4.00 = (1,100.00)

5500 hrs x P.8636 = 4,749.80

3400lbs x P1.00 =

22,000.00

5000 hrs x P4.00 = 2,000.00

5500 hrs x P.80 = 349.80

4,400.00

60.00

3,000.00

900.00

20,000.00 5000 hrs x P.80 =

400.00

749.80

4,000.00

A

B

C

D

initial

allowance

required

unit

standard

mix

for reduction

quantity ( a / b)

cost

material costs (c x d)

NYT

24 KG

0.80

30.00

1.50

45.00

SYNX MYX

19.2 LTR 10 KG

0.80 1.00

24.00 10.00

2.10 2.80

50.40 28.00

Standard material cost -- 10 liter container 123.40 instead of being divided by the .8, the first two items could be multiplied by 1.25 to obtaine the same.

6.10 a

DMQV = (AQ x SP) - (SQ x SP) = ( 63,000 x P6) - (62,000 x P6) =

b

Total DLV = (AH x AR) - SH x SR) =

(46,000 x P16.50) - (46,500 x P16) =

15,000.00

c

Total DLQV = (AH x SR) - (SH x SR) =

(46,000 x P16) - (46,500 x P16) =

(8,000.00) fav

d

DMPV = (AQ x AP) - (AQ x SP) =

(63,000 x P5.60) - (63,000 x P6) =

(25,200.00) fav

e

Total Overhead Variance = Actual overhead - Applied overhead Actual overhead = P155,000 + P205,000 = Applied overhead = 46,500 x P8.00 = Total overhead variance

6,000.00 Unfav Unfav

360,000.00 372,000.00 (12,000.00) fav

6.11 1 Standard Quantity allowed 2 Standard direct labor hours allowed

1,200 / 3 yards 1,200 x 2 hours

400.00 yards 2,400.00 hours

3 Material price variance AQ = SQ + (MQV / SP) 400 yards + (P594 unf / P8) 400 + 74.25 AQ = 4 Labor efficiency variance SP x (AQ - SQ) P7.00 x [2,520 hours - (1,200 x 2 hours)] P7.00 x (2,520 hours - 2,400 hours)

=

474.25 yards

840.00

5 Standard prime cost to produce one box Direct materials 1/3 sq yard per box at P8.00 per yard Direct labor 2 hours at P7.00 per hour Total 6 Actual cost to produce one box Dire...