Question

Arthur's Plumbing reported the following: Demizio Valley Orchards, Inc. (DVO), developed standard costs for direct material...

Arthur's Plumbing reported the following: Demizio Valley Orchards, Inc. (DVO), developed standard costs for direct material and direct labor. In 2015, DVO estimated the following standard costs for one of their most well loved products, the DVO classic Grandma's large apple pie which had a brown sugar coating on the top of the crust as well as including cranberry and mince ingredients in addition to the apples.
Budgeted quantity Budgeted price
Direct materials 2.0 pounds $6.25 per pound
Direct labor 0.20 hours $13.00 per hour
During September, DVO produced and sold 1,100 pies using 2,300 pounds of direct materials at an average cost per pound of $6.00 and 200 direct labor hours at an average wage of $13.25 per hour.
4) September's direct material flexible-budget variance is ________.
A) $100.00 unfavorable
B) $150.00 favorable
C) $50.00 unfavorable
D) $575 favorable
5)The direct material price variance during September is ________.
A) $575 favorable
B) $575 unfavorable
C) $50.00 unfavorable
D) $50.00 favorable
6) The direct material efficiency variance during September is ________.
A) $575 favorable
B) $575 unfavorable
C) $625 favorable
D) $625 unfavorable
7) The direct labor flexible-budget variance during September is ________.
A) $210.00 favorable
B) $210.00 unfavorable
C) $250.00 favorable
D) $250.00 unfavorable
8) The direct labor price variance during September is ________.
A) $260.00 unfavorable
B) $280.00 favorable
C) $50.00 unfavorable
D) $50.00 favorable
9) The direct labor efficiency variance during September is ________.
A) $260.00 favorable
B) $250.00 unfavorable
C) $280.00 favorable
D) $210.00 unfavorable

Homework Answers

Answer #1

(4)

Price variance = (Actual price – budgeted price) × (actual quantity) = (6 - 6.25)*2300 = -575
Efficiency variance = (Actual quantity – budgeted quantity) × (standard price or rate) = (2300 - 1100*2)*6.25 = 625
Flexible budget variance = price variance + efficiency variance = 625 - 575= 50 -- Option C is correct

(5)

Price variance = (Actual price – budgeted price) × (actual quantity) = (6 - 6.25)*2300 = -575 --- Option A is correct

(6)

Efficiency variance = (Actual quantity – budgeted quantity) × (standard price or rate) = (2300 - 1100*2)*6.25 = 625 --- Option D is correct

(7)

Price variance = (Actual price – budgeted price) × (actual quantity) = (13.25 - 13)*200 = 50
Efficiency variance = (Actual quantity – budgeted quantity) × (standard price or rate) = (200 - 1100*0.2)*13 = -260
Flexible budget variance = price variance + efficiency variance = -260 + 50= -210 --- Option A is correct

(8)

Price variance = (Actual price – budgeted price) × (actual quantity) = (13.25 - 13)*200 = 50 --- Option C is correct

(9)

Efficiency variance = (Actual quantity – budgeted quantity) × (standard price or rate) = (200 - 1100*0.2)*13 = -260 --- Option A is correct

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