Kansas Company uses a standard cost accounting system. In 2017, the company prod

Question

Kansas Company uses a standard cost accounting system. In 2017, the company produced 27,500 units. Each unit took several pounds of direct materials and 1.6 standard hours of direct labor at a standard hourly rate of $13.00. Normal capacity was 50,400 direct labor hours. During the year, 130,700 pounds of raw materials were purchased at $0.91 per pound. All materials purchased were used during the year.

a) If the materials price variance was $1,307 favorable, what was the standard materials price per pound?

b) If the materials quantity variance was $11,454 unfavorable, what was the standard materials quantity per unit?

c) What were the standard hours allowed for the units produced?

d)

Using one or more answers above, what were the total costs assigned to work in process?

If the labor quantity variance was $7,800 unfavorable, what were the actual direct labor hours worked?
Actual hours worked

Explanation / Answer

Solution:

a) If the materials price variance was $1,307 favorable, what was the standard materials price per pound?

Material Price Variance = Actual Quantity Purchased (Standard Price – Actual Price)

Here,

Material Price Variance = $1307favorable

Actual Quantity Purchased = 130,700 Pounds

Actual Price per pound = $0.91

Material Price Variance = Actual Quantity Purchased (Standard Price – Actual Price)

$1,370 = 130,700 (Standard Price – 0.91)

Standard Price – 0.91 = 1370 / 130700

Standard Price – 0.91 = 0.01

Standard Price per pound = 0.01+0.91 = $0.92 per pound

b) If the materials quantity variance was $11,454 unfavorable, what was the standard materials quantity per unit?

Material Quantity Variance = Standard Price (Std quantity allowed for actual production – Actual Quantity Used)

Here,

Standard Price per pound (as calculated in part a) = $0.92

Actual Quantity Used = 130,700 Pounds

Material Quantity Variance = 11,454 Unfavorable or -$11,454

Material Quantity Variance = Standard Price (Std quantity allowed for actual production – Actual Quantity Used)

-11,454 = 0.92 (Std quantity allowed for actual production – 130,700)

Std quantity allowed for actual production – 130,700 = -11,454 / 0.92 = -12,450

Std quantity allowed for actual production = -12,450 + 130,700 = 118,250 pounds

Std quantity allowed for actual production = Actual Unit produced x Per Unit Standard Quantity allowed

Here,

Actual Unit Produced = 27,500 Units

Std quantity allowed for actual production = 118,250 Pounds

Per Unit Standard Quantity allowed = Std quantity allowed for actual production 118,250 Pounds / Actual Unit Produced 27,500 Units

= 4.30 pounds

c) What were the standard hours allowed for the units produced

Standard Hours allowed for the units produced = Total Units Produced x Standard Hours of direct labor needed per unit

= 27,500 Units x 1.6 hrs

= 44,000 Hours

d) If the labor quantity variance was $7,800 unfavorable, what were the actual direct labor hours worked

Labor Quantity Variance = Standard Hourly Rate (Standard Hours allowed for units produced – Actual Hour Worked)

-7,800 = 13(44,000 – Actual Hours Worked)

-600 = 44,000 – Actual Hours worked

Actual Hours Worked = 600 + 44,000 = 44,600 Hours

Actual Hours Worked = 44,600 Hours

Hope the above calculations, working and explanations are clear to you and help you in understanding the concept of question.... please rate my answer...in case any doubt, post a comment and I will try to resolve the doubt ASAP…thank you

Pls ask separate question for remaining parts.

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