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1) CK Venkat Chemicals releases the following data related to direct labor costs

ID: 2496829 • Letter: 1

Question

1) CK Venkat Chemicals releases the following data related to direct labor costs for February:

Actual costs

7,700 hours at $13

Standard costs

7,000 hours at $9

Calculate the direct labor time variance?

a.

$9,100 favorable

b.

$9,100 unfavorable

c.

$6,300 unfavorable

d.

$6,300 favorable

2) CK Venkat Chemicals releases the following data relate to direct labor costs for February:

Actual costs

7,700 hours at $13

Standard costs

7,000 hours at $9

Calculate the direct labor rate variance?

a.

$28,000 favorable

b.

$28,000 unfavorable

c.

$30,800 favorable

d.

$30,800 unfavorable

3) The standard costs and actual costs for factory overhead for the manufacture of 2,500 units of actual   production are as follows:

Standard Costs

Fixed overhead (based on 10,000 hours)

3 hours @ $.80 per hour

Variable overhead

3 hours @ $2 per hour

Actual Costs

          Total variable cost, $18,000

          Total fixed cost, $8,000

The amount of the factory overhead volume variance is:

a.

$2,000 favorable

b.

$2,000 unfavorable

c.

$2,500 unfavorable

d.

$0

4) The standard costs and actual costs for factory overhead for the manufacture of 2,500 units of actual production are as follows:

Standard Costs

Fixed overhead (based on 10,000 hours)

3 hours @ $.80 per hour

Variable overhead

3 hours @ $2 per hour

Actual Costs

          Total variable cost, $18,000

          Total fixed cost, $8,000

The amount of the total factory overhead cost variance is:

a.

$2,000 favorable

b.

$5,000 unfavorable

c.

$2,500 unfavorable

d.

$0

Actual costs

7,700 hours at $13

Standard costs

7,000 hours at $9

Explanation / Answer

1)Labor time variance = SR(AH -SH)

                                       = 9 ( 7700- 7000)

                                      = 9 *700

                                       = 6300 (U)

COrrect option is "C"

2)Labor rate variance = AH (AR -SR)

                                        = 7700 ( 13-9)

                                         = 7700 * 4

                                        = 30800 (U)

Correct option is "D"

3)Budgeted fixed overhead = 10000 *.8 = 8000

Standard fixed overhead for actual output = 2500 * 3 = 7500 *.8 = 6000

Volume variance = standard overhead - BUdgeted overhead

                            = 6000 - 8000

                            = -2000 (F)

correct option is "A"

4)correct option is "B - 5000U

Actual overhead = 18000 +8 000 = 26000

Budgeted overhead = (2500*3 *.8) Fixed + (2500 *3*2 )variable

                                   = 6000 + 15000

                                   = 21000

Total variance = actual -Standard overhead

                          = 26000 - 21000

                       = 5000 (U)