Reference no: EM133117879

Problem 1 - Materials Variances - Dark Wind manufactures decorative weather vanes that have a standard materials cost of two pounds of raw materials at $2.50 per pound. During September 9,500 pounds of raw materials costing $3.25 per pound were used in making 4,700 weather vanes.

Required - Determine the materials price and quantity variance.

Problem 2 - Assume that Pearle Vision uses standard costs to control the materials in its made-to-order sunglasses. The standards call for 2 ounces of material for each pair of lenses. The standard cost per ounce of material is $17.00. During July, the Santa Clara location produced 5,200 pairs of sunglasses and used 9,900 ounces of materials. The cost of the materials during July was $17.25 per ounce, and there were no beginning or ending inventories.

Required -

a. Determine the flexible budget materials cost for the completion of the 5,200 pairs of glasses.

b. Determine the actual materials cost incurred for the completion of the 5,200 pairs of glasses and compute the total materials variance.

c. How much of the total variance was related to the price paid to purchase the materials?

d. How much of the difference between the answers to requirements (a) and (b) was related to the quantity of materials used? (Hint: Compute materials quantity variance.)

Problem 3 - Direct Labor Variances - Assume that Nortel manufactures specialty electronic circuitry through a unique photo-electronic process. One of the primary products, Model ZX40, has a standard labor time of 0.5 hour and a standard labor rate of $15.50 per hour. During February, the following activities pertaining to direct labor for ZX40 were recorded:

Direct labor hours used 2,210

Direct labor cost $40,000

Units of ZX40 manufactured 4,800

Required -

(a) Determine the labor rate variance.

(b) Determine the labor efficiency variance.

(c) Determine the total flexible budget labor cost variance.

Problem 4 - Variable Overhead Variances - Assume that the best cost driver that Sony has for variable factory overhead in the assembly department is machine hours. During April, the company budgeted 580,000 machine hours and $6,000,000 for its Texas plant's assembly department. The actual variable overhead incurred was $6,200,000, which was related to 600,000 machine hours.

(a) Determine the variable overhead spending variance.

(b) Determine the variable overhead efficiency variance.