Chapter 16
Standard Costing

16.1
(a)
Material price variance 30 000 x ($4.95 - $5.00) = $1 500 FAV

(b)
Material efficiency variance (16 700 – 16 600) x $5.00 = $500 U/F

(c)
General Journal Debit Credit
Feb 28 Material control 150 000 Material price variance 1 500 General ledger control 148 500 Purchase of direct material and the price variance _________________________________________________________ Work in process 83 000 Material efficiency variance 500 Material control 83 500 Issue of direct material and the efficiency variance _________________________________________________________

16.2
(a)
Material price variance 40 000 x ($6.45 - $6.50) = $2 000 FAV

(b)
Material efficiency variance (30 620 – 30 250) x $6.50 = $2 405 U/F

(c)
General Journal Debit Credit
Mar 31 Material control 260 000 Material price variance 2 000 General ledger control 258 000 Purchase of direct material and the price variance _________________________________________________________ Work in process 196 625 Material efficiency variance 2 405 Material control 199 030 Issue of direct material and the efficiency variance _________________________________________________________

16.3
(a)
Material price variance $ Material X 164 000 x ($3.95 - $4.00) = 8 200 FAV Material Y 124 000 x ($3.10 - $3.00) = 12 400 U/F 4 200 U/F

(b)
Material efficiency variance $ Material X (163 000 – 162 000) x $4.00 = 4 000 U/F Material Y (107 000 – 108 000) x $3.00 = 3 000 FAV 1 000 U/F

16.4
(a)
Material price variance $ Material P1 105 000 x ($3.10 - $3.00) = 10 500 U/F Material F5 22 000 x ($2.45 - $2.50) = 1 100 FAV 9 400 U/F

(b)
Material efficiency variance $ Material P1 (107 600 – 108 000) x $3.00 = 1 200 FAV Material F5 (13 600 – 13 500) x $2.50 = 250 U/F 950 FAV

16.5
(a)
Material price variance 48 000 x ($1.05 - $1.00) = $2 400 U/F

Material efficiency variance (48 000 – 48 250) x $1.00 = $250 FAV

(b)
General Journal Debit Credit
Apr 30 Material control 52 500 General ledger control 52 500 Purchase of direct material __________________________ Work in process 48 250 Material price variance 2 400 Material efficiency variance 250 Material control 50 400 Issue of direct material and the efficiency variance _________________________________________________________

16.6
(a)
Labour rate variance 119 900 x ($7.95 - $8.50) = $65 945 FAV

Labour efficiency variance (119 900 – 119 910) x $8.50 = $85 FAV

(b)
General Journal Debit Credit
Apr 30 Work in process 1 019 235 Labour rate variance 65 945 Labour efficiency variance 85 Labour control 953 205 Distribution of direct labour and the variances _________________________________________________________

16.7
(a)
Labour rate variance 15 000 x ($9.10 - $9.00) = $1 500 U/F

Labour efficiency variance (15 000 – 15 100) x $9.00 = $900 FAV

(b)
General Journal Debit Credit
Sep 30 Work in process 135 900 Labour rate variance 1 500 Labour efficiency variance 900 Labour control 136 500 Distribution of direct labour and the variances _________________________________________________________

16.8
(a)
Material price variance 16 000 x ($5.05 - $5.00) = $800 U/F

Material efficiency variance (10 910 – 10 900) x $5.00 = $50 U/F

(b)
Labour rate variance 5 500 x ($9.45 - $9.50) = $275 FAV

Labour efficiency variance (5 500 – 5 450) x $9.50 = $475 U/F

16.9
(a)
Material price variance 25 500 x ($4.30 - $4.20) = $2 550 U/F

(b)
Material efficiency variance (27 200 – 27 300) x $4.20 = $420 FAV

(c)
Labour rate variance 18 150 x ($8.85 - $8.90) = $907.50 FAV

(d)
Labour efficiency variance (18 150 – 18 200) x $8.90 = $445 FAV

16.10
(a)
Actual overhead Budget based on Budget based on Overhead Incurred actual hours standard hours applied $ $ $ $
V. 189 400 V. 122 000 x $1.50 V. 125 000 x $1.50 125 000 x $2.50 = 183 000 = 187 500
F. 110 890 F. 120 000 F. 120 000