Write on the worksheet and show all your work Circle the correct answer BUAC – 2
ID: 2395830 • Letter: W
Question
Write on the worksheet and show all your work
Circle the correct answer
BUAC – 20B Managerial Accounting
Extra Credit Worksheet – 7 points
Information Part 1
Hanson Inc. has the following direct materials standard to manufacture one Zippy:
1.5 pounds per Zippy at $4.00 per pound
Last week, 1,700 pounds of materials were purchased and used to make 1,000 Zippies.
The materials cost a total of $6,630.
How many pounds of materials should Hanson have used to make 1,000 Zippies?
a.1,700 pounds
b.1,500 pounds
c.1,200 pounds
d.1,000 pounds
Hanson’s materials quantity variance (MQV) for the week was:
a.$170 unfavorable
b.$170 favorable
c.$800 unfavorable
d.$800 favorable
Hanson’s materials price variance (MPV) for the week was:
a.$170 unfavorable
b.$170 favorable
c.$800 unfavorable
d.$800 favorable
Information Part 2
Hanson Inc. has the following direct labor standard to manufacture one Zippy
1.5 standard hours per Zippy at $12.00 per direct labor hour
Last week, 1,550 direct labor hours were worked at a total labor cost of $18,910 to make 1,000 Zippies.
Hanson’s labor rate variance (LRV) for the week was:
a. $310 unfavorable
b. $310 favorable
c. $300 unfavorable
d. $300 favorable
Hanson’s labor efficiency variance (LEV) for the week was:
a. $590 unfavorable.
b. $590 favorable.
c. $600 unfavorable.
d. $600 favorable
Information Part 3
Hanson Inc. has the following variable manufacturing overhead standard to manufacture one Zippy:
1.5 standard hours per Zippy at $3.00 per direct labor hour
Last week, 1,550 hours were worked to make 1,000 Zippies, and $5,115 was spent for variable manufacturing overhead.
Hanson’s rate variance (VMRV) for variable manufacturing overhead for the week was:
a.$465 unfavorable
b.$400 favorable
c.$335 unfavorable
d.$300 favorable
Hanson’s efficiency variance (VMEV) for variable manufacturing overhead for the week was:
a.$435 unfavorable
b.$435 favorable
c.$150 unfavorable
d.$150 favorable
Explanation / Answer
Part 1
How many pounds of materials should Hanson have used to make 1,000 Zippies?
Correct Answer (b) 1,500 pounds
Hanson’s materials quantity variance (MQV) for the week was:
Correct Answer (c ) $800 unfavorable
Hanson’s materials price variance (MPV) for the week was:
Correct Answer (b) $170 favorable
Part 2
Hanson’s labor rate variance (LRV) for the week was:
Correct Answer (a) $310 unfavorable
Hanson’s labor efficiency variance (LEV) for the week was:
Correct Answer (c ) $600 unfavorable.
Part 3
Hanson’s rate variance (VMRV) for variable manufacturing overhead for the week was:
Correct Answer (a) $465 unfavorable
Hanson’s efficiency variance (VMEV) for variable manufacturing overhead for the week was:
Correct Answer (c ) $150 unfavorable
Working for solving above answers
Actual DATA for
1000
units
Quantity (AQ)
Rate (AR)
Actual Cost
Direct Material
1700
$ 3.900
$ 6,630.00
Direct labor
1550
$ 12.20
$ 18,910.00
Variable Overhead
1550
$ 3.30
$ 5,115.00
Standard DATA for
1000
units
Quantity (SQ)
Rate (SR)
Standard Cost
Direct Material
1500
$ 4.00
$ 6,000.00
Direct labor
1500
$ 12.00
$ 18,000.00
Variable Overhead
1500
$ 3.00
$ 4,500.00
Material Price Variance
(
Standard Rate
-
Actual Rate
)
x
Actual Quantity
(
$ 4.00
-
$ 3.90
)
x
1700
170
Variance
170
Favorable-F
Material Quantity Variance
(
Standard Quantity
-
Actual Quantity
)
x
Standard Rate
(
1500
-
1700
)
x
$ 4.00
-800
Variance
800
Unfavorable-U
Labor Rate Variance
(
Standard Rate
-
Actual Rate
)
x
Actual Labor Hours
(
$ 12.00
-
$ 12.20
)
x
1550
-310
Variance
310
Unfavorable-U
Labor Efficiency Variance
(
Standard Hours
-
Actual Hours
)
x
Standard Rate
(
1500
-
1550
)
x
$ 12.00
-600
Variance
600
Unfavorable-U
Variable Overhead Rate Variance
(
Standard Rate
-
Actual Rate
)
x
Actual Labor Hours
(
$ 3.00
-
$ 3.30
)
x
1550
-465
Variance
465
Unfavorable-U
Variable Overhead Efficiency Variance
(
Standard Hours
-
Actual Hours
)
x
Standard Rate
(
1500
-
1550
)
x
$ 3.00
-150
Variance
150
Unfavorable-U
Actual DATA for
1000
units
Quantity (AQ)
Rate (AR)
Actual Cost
Direct Material
1700
$ 3.900
$ 6,630.00
Direct labor
1550
$ 12.20
$ 18,910.00
Variable Overhead
1550
$ 3.30
$ 5,115.00
Standard DATA for
1000
units
Quantity (SQ)
Rate (SR)
Standard Cost
Direct Material
1500
$ 4.00
$ 6,000.00
Direct labor
1500
$ 12.00
$ 18,000.00
Variable Overhead
1500
$ 3.00
$ 4,500.00
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