Cost Accounting-Homework – Week 4 ACCT 321

| January 30, 2017

Homework – Week 4

ACCT 321

1. What is the formula used to calculate the Materials Price Variance?

2. What is the formula used to calculate materials quantity variance (also called direct materials usage variance)?

3. What is the formula used to calculate direct labor rate variance?

4. What is the formula used to calculate direct labor efficiency variance (also called quantity or usage variance).

5. What is the formula used to calculatefactory overhead controllable variance?

6. What is the formula used to calculateFactory overhead spending variance?

7. What is theformula used to calculate variable overhead efficiency variance?

8. MorningTime Bakery produces specialty coffee machines. MorningTime uses a standard cost system.

Data regarding production during August are as follows:

Variable Manufacturing overhead costs incurred


Variable Manufacturing overhead cost rate

$12 per standard machine hour

Fixed manufacturing overhead costs incurred


Fixed manufacturing overhead budgeted


Denominator level in machine-hours (Budget)


Standard machine-hour allowed per unit of output


Units of output


Actual machine-hours used


Ending Work-in-process inventory


Using the 4-variance method calculate all (variable and fixed) manufacturing overhead variances. Indicate F for favorable, and U for unfavorable.

9. Company ABC has estimated its sales budget at 500,000 units for the quarter ending December 30, 20X5. ABC expects sales for October, November, December are 37.5%, 25%, and 37.5% of the total, respectively. The desired finished goods inventories are as follows:

October 1 90,000 units

October 31 87,500 units

November 30 93,000 units

December 31 95,000 units

Prepare a production budget for the first last quarter 20X5.

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