Harmon Household Products, Inc.

, manufactures a number of consumer items for gen

eral household use. One of these products, a chopping board, requires an expensi
ve hardwood. During a recent month, the company manufactured 4,000 chopping boar
ds using 11,000 board feet of hardwood. The hardwood cost the company $18,700. T
he companys standards for one chopping board are 2.5 board feet of hardwood, at a
cost of $1.80 per board foot. Required: 1a. According to the standards, what co
st for wood should have been incurred to make 4,000 chopping blocks? (Omit the "
$" sign in your response.) Total standard cost $
18,000
1b. How much greater or less is this than the cost that was incurred? (Input the
amount as a positive value. Leave no cells blank - be certain to enter "0" wher
ever required. Indicate the effect of each variance by selecting "F" for favorab
le, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Omit th
e "$" sign in your response.) Spending variance $
700
U
2. Break down the difference computed in (1) above into a materials price varian
ce and a materials quantity variance.(Input all amounts as positive values. Do n
ot round intermediate calculations. Leave no cells blank - be certain to enter "
0" wherever required. Indicate the effect of each variance by selecting "F" for
favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).
Omit the "$" sign in your response.)
Materials price variance Materials quantity variance
$ $
1,100 1,800
F U
Explanation: 1.
Number of chopping blocks Number of board feet per chopping block Standard board
feet allowed Standard cost per board foot Total standard cost $
4,000 2.5
10,000 $1.80 18,000
Actual cost incurred Standard cost above
$
18,700 18,000

Spending variance unfavorable

$
700
2.
Standard Quantity Allowed for Actual Output, at Standard Price (SQ SP)
Actual Quantity of Input, at Standard Price (AQ SP)
Actual Quantity of Input, at Actual Price (AQ AP)
10,000 board feet 11,000 board feet $1.80 per board foot $1.80 per board foot =
$18,000 = $19,800 Materials quantity Materials price variance = $1,800 U varianc
e = $1,100 F Spending variance = $700 U
$18,700
AirMeals, Inc., prepares in-flight meals for a number of major airlines. One of
the companys products is stuffed cannelloni with roasted pepper sauce, fresh baby
corn, and spring salad. During the most recent week, the company prepared 6,000
of these meals using 1,150 direct labor-hours. The company paid these direct la
bor workers a total of $11,500 for this work, or $10 per hour. According to the
standard cost card for this meal, it should require 0.20 direct labor-hours at a
cost of $9.50 per hour. Required: 1a. According to the standards, what direct l
abor cost should have been incurred to prepare 6,000 meals?(Omit the "$" sign in
your response.) Total standard direct labor cost $
11,400
1b. How much does this differ from the actual direct labor cost? (Input the amou
nt as a positive value. Leave no cells blank - be certain to enter "0" wherever
required. Indicate the effect of each variance by selecting "F" for favorable, "
U" for unfavorable, and "None" for no effect (i.e., zero variance). Omit the "$"
sign in your response.) Spending variance
100
$
U
2. Break down the difference computed in (1) above into a labor rate variance an
d a labor efficiency variance. (Input all amounts as positive values. Do not rou
nd intermediate calculations. Leave no cells blank - be certain to enter "0" whe
rever required. Indicate the effect of each variance by selecting "F" for favora
ble, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Omit t
he "$" sign in your response.)
Labor rate variance Labor efficiency variance
$ $
575 475
U F

Explanation: 1.
Number of meals prepared Standard direct laborhours per meal Total direct laborhours allowed Standard direct labor cost per hour Total standard direct labor co
st $
6,000 0.20
1,200 $9.50
11,400
Actual cost incurred Total standard direct labor cost (above) Spending variance u
nfavorable
$
11,500 11,400
$
100
2.
Standard Hours Allowed for Actual Output, at Standard Rate (SH SR)
Actual Hours of Input, at Standard Rate (AH SR)
Actual Hours of Input, at Actual Rate (AH AR)
1,200 hours 1,150 hours 1,150 hours $9.50 per hour $9.50 per hour $10.00 per hou
r = $11,400 = $10,925 = $11,500 Labor efficiency variance Labor rate variance =
$475 F = $575 U Spending variance = $100 U