ACCT 321 WEEK 4 HOMEWORK

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Homework – Week 4
ACCT 321
1. 1. What is the formula used to calculate the Materials Price Variance?
1. 2. What is the formula used to calculate materials quantity variance (also
called direct materials usage variance)?
1. 3. What is the formula used to calculate direct labor rate variance?
1. 4. What is the formula used to calculate direct labor efficiency variance (also
called quantity or usage variance).
1. 5. What is the formula used to calculate factory overhead controllable
variance?
1. 6. What is the formula used to calculate Factory overhead spending variance?
1. 7. What is the formula used to calculate variable overhead efficiency
variance?

2. 1. 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
$155,100
Variable Manufacturing overhead
cost rate
$12 per
standard
machine hour
Fixed manufacturing overhead
costs incurred
$401,000
Fixed manufacturing overhead
budgeted
$390,000
Denominator level in
machine-hours (Budget)
13,000
Standard machine-hour allowed
per unit of output
.3
Units of output 41,000
Actual machine-hours used 13,300

3. Ending Work-in-process inventory 0
Using the 4-variance method calculate all (variable and fixed) manufacturing overhead
variances. Indicate F for favorable, and U for unfavorable.
1. 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.