1. Alphonse Enterprises recently used 14,000 labor hours to produce 7,500 comple
ID: 2444708 • Letter: 1
Question
1. Alphonse Enterprises recently used 14,000 labor hours to produce 7,500 completed units. According to manufacturing specifications, each unit is anticipated to take two hours to complete. The company's actual payroll cost amounted to $158,200. If the budgeted labor cost per hour is $11, Alphonse's labor rate variance is: a. $4,200 Unfavorable b. $4,200 Favorable c. $4,500 Unfavorable d. $4,500 Favorable e. None of the above. 2. The Heard Company has a standard costing system. The following data are available for June: Actual quantity of direct materials purchased 35,000 pounds Standard price of direct materials $4 per pound Direct Material purchase price variance $7,000 unfavorable Material quantity variance $4,200 favorable The actual price per pound of direct materials purchased in June is: a. $3.92 b. $4.32 c. $4.08 d. $4.20 3. Which of the following correctly lists all the information needed to calculate a labor rate variance? a. Standard labor rate and actual hours worked. b. Actual hours worked and actual units produced. c. Standard labor rate, actual labor rate, and actual units produced. d. Actual labor rate and actual hours worked. e. Actual labor rate, standard labor rate, and actual hours worked.Explanation / Answer
Question Answer Explanations 1 a. Labour Rate Variance = Actual Hours at standard Rate - Actual Labour Cost =14000 x 11 - 158200 = =4200 UF 2 d. Material Price Variance = Actual Quantity x (Standard Price - actual Price) or,-7000 = 35000 x (4-actual price) or, -7000 = 35000 x 4 - 35000 x Actual price or, 35000 x actual price = 140000+7000 = 147000 Hence Actual Price = 147000/35000 = $4.20 per pound 3 e. formula for Rate variance: Labour rate variance = Actual Labour hour x (Standard rate - actual rate)
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.