gnb13ech11exam

8/10/2019 GNB13eCh11Exam

1/6

Garrison 13e Practice Exam Chapter 11

Print these pages. Answer each of the following questions, explaining your answers or showing

your work, as appropriate, and then compare your solutions to those provided at the end of the

practice exam.

1. Penobscot Company employs a standard cost system in which direct materials inventory iscarried at standard cost. The company has established the following standards for the primecosts of one unit of product:

StandardQuantity

StandardPrice

StandardCost

Direct labor .! hours "##.$$%hour "11#.#$Direct materials 1.$ pounds "1#.$$%pound 1!&.$$

During 'pril( the company purchased ))$($$$ pounds of direct material at a total cost of"#(!&!($$$. The total factory wages for *une were ")($$($$$( of which +$, was for directlabor. The company manufactured -($$$ units of product during 'pril using )$($$$pounds of direct material and !#($$$ direct labor hours.

Part a/ 0hat is the price variance for the direct material acuired by the company during'pril2

Part b/ 0hat is the direct material uantity variance for 'pril2

Part c/ 0hat is the direct labor rate variance for 'pril2


2/6

Part d/ 0hat is the direct labor efficiency variance for 'pril2

. Phoeni3 Company maintains warehouses that stoc4 items carried by its e5retailer clients.0hen one of Phoeni36 clients receives an order from an online customer( the order isforwarded to Phoeni3. Phoeni3 then pulls the item from the warehouse( pac4s it and ships itto the customer. Phoeni3 uses a predetermined variable overhead rate based on direct labor5hours. 'ccording to the company6s records( $.$# direct labor5hours are reuired to fulfill anorder for one item and the variable overhead rate is ").- per direct5labor hour. DuringDecember( Phoeni3 shipped 1$($$$ orders using #(!$$ direct labor5hours. The companyincurred a total of "1#(7$ in variable overhead costs.

Part a/ 0hat is the variable overhead rate variance during December2

Part b/ 0hat is the variable overhead efficiency variance during December2

). The Duvall Company applies manufacturing overhead costs to products on the basis of directlabor5hours. The standard cost card shows that ! direct labor5hours are reuired per unit ofproduct. The company estimated that it would wor4 1&$($$$ direct labor5hours and incur thefollowing manufacturing overhead costs for the month of 8arch:

Total fi3ed overhead costs ")7(!$$Total variable overhead costs "1+&($$$

During 8arch( the company completed &($$$ units of product( wor4ed 17($$$ direct labor5hours( and incurred the following total manufacturing overhead costs:

Total fi3ed overhead costs ")$(!$$Total variable overhead costs "1+7(&$$

The denominator activity used to calculate its predetermined overhead rate was 1&$($$$


3/6

direct labor5hours.

Part a/ 0hat is the variable overhead 9;/ spending variance for 8arch2

Part b/ 0hat is the variable overhead 9;/ efficiency variance for 8arch2

Note: Complete parts (c) and (d) only if you are responsible for the Chapter 11 appendix.Part c/ 0hat is the fi3ed overhead budget variance for 8arch2

Part d/ 0hat is the fi3ed overhead volume variance for 8arch2


4/6

GNB 13e Practice Exam Solutions Chapter 11

1. Part (a) Solution (Learning O!ecti"e #)$ 'Q 3 'P ? SP/ > ))$($$$ 3 "1#.$ ? "1#.$$/ > "!!($$$ @/

Part () Solution (Learning O!ecti"e #)$

)$$($$$ poundsThen calculate the material uantity variance as follows.8aterials uantity variance > SP 3 'Q ? SQ/ > "1#.$$ 3 )$($$$ ? )$$($$$/ >"&($$$@/

Part (c) Solution (Learning O!ecti"e 3)$

'; 3 'B ? SB/Aabor rate variance > !#($$$ 3 "#-.$$ ? "##.$$/ > "!#($$$ @/

Part (%) Solution (Learning O!ecti"e 3)$

!-($$$ hoursThen calculate the direct labor efficiency variance as follows:Direct labor efficiency variance > SB 3 '; ? S;/ > "##.$$ 3 !#($$$ ? !-($$$/ >

"##($$$ "1#(7$ given/ > "1#(+-$

9ariable overhead rate

variance( ")$ "1#(+-$ > "1-(!$$

9ariable overhead efficiency

variance( "!-$ ").- per hour #(!$$ hours ? #(&$$ hours/ > "!-$ 17($$$hours 3 "1.1$%DA hour/ ? &($$$ units 3 ! DA hours%unit/ 3 "1.1$%hour/ > "#(#$$ @8ore direct labor hours 17($$$/ were wor4ed than were allowed at standard 1!&($$$/F assuch( the overhead efficiency variance is unfavorable.

Part (c) Solution (Learning O!ecti"e )$

The fi3ed overhead


6/6

Part (%) Solution (Learning O!ecti"e )$

gnb13ech11exam

Documents