Question

64. TaskMaster Enterprises employs a standard cost system in which direct materials inventory is carried at standard cost. TaskMaster has established the following standards for the prime costs of one unit of product.

	Standard					Standard			Standard
	Quantity					Price			Cost
Direct Materials		7	pounds			$	1.60	per pound		$	11.20
Direct Labor		.30	hour			$	10.00	per hour			3.00
										$	14.20

During November, TaskMaster purchased 154,000 pounds of direct materials at a total cost of $277,200. The total factory wages for November were $52,000, 80% of which were for direct labor. TaskMaster manufactured 21,000 units of product during November using 132,000 pounds of direct materials and 5,000 direct labor hours.

What is the direct materials efficiency (quantity) variance for November?

$11,200.

$26,400.

$30,800.

$24,000.

65.The Hsu Manufacturing Company has two service departments: Maintenance and Accounting. The Maintenance Department's costs of $433,500 are allocated on the basis of machine hours. The Accounting Department's costs of $166,800 are allocated on the basis of the number of employees within a specific department. The direct departmental costs for A and B are $400,000 and $600,000, respectively.

	Maint	Acctg	A	B
Machine hours	935	70	2,250	300
Number of employees	2	2	8	4

What is the Maintenance Department's cost allocated to Department A using the direct method?

$336,500.

$382,500.

$492,900.

$198,500.

66.The Mallak Company produced three joint products at a joint cost of $192,400. Two of these products were processed further. Production and sales were:

	Weight		Sales			Addt’l. Processing Costs
P	435,000	lbs.	$	348,000		$	261,000
Q	192,000	lbs.		57,600			-0-
R	192,000	lbs.		336,000			192,000

If the estimated net realizable value method is used and product Q is accounted for as a main product, how much of the joint costs would be allocated to product R?

$84,889.

$87,667.

$108,500.

$96,000.

Answer 1

64)
Direct Material Efficiency Variance = Standard Qty * Standatd Price - Actual Qty * Standard Price
Standard Qty = 21000 * 7 = 147000 pound
Standard Price = 1.60 per pound
Actual Qty = 154000 Pound
Direct Material Efficiency Variance = 147000 * 1.60 - 154000 * 1.60
			.= 11200 Unfavorable

65)
Department	Maintenance	A	B	Total
Overhead cost	433500	0	0	433500
Machine Hours	0	2250	300	2550
Allocation	-433500	382500	51000	0
The maintenance department cost alloctaed to Department A is 382500

66)
Products	Sales	Add'l Cost	Net Realizable Value
P	348000	261000	87000
Q	57600	0	57600
R	336000	192000	144000
			288600
Joint Cost to be allocated to R = 192400 * 144000 / 288600 = 96000