1. Material Variance 2. Direct Labor Costs Variances (Direct 3. Factory Overhead Variance
Q: Why is the direct materials usage variance allocated only to WIP Inventory, Finished Goods…
A: Solution:- Introduction:- The following formula used to calculation as follows:- materials usage…
Q: The material price variance is computed by multiplying the difference between the actual price and…
A: GIVEN Material Price Variance is the difference between the actual cost of Material purchased and…
Q: Compute the net overhead variance (indicate over- or underapplied manufacturing overhead)
A: Overhead Variance is the deviation of actual overhead incurred from the standard overhead…
Q: From the following information calculate Labour cost Variance, Labour Rate Variance and Labour…
A: Variance can be defined as the alteration between the actual amounts and the budgets being set. The…
Q: Compute the total, price, and quantity variances for materials and labor. Total materials variance…
A: Material variances and labor variances are calculated as a difference between the standard amount…
Q: Why is the flexible-budget variance the same amount as the spending variance for fixed manufacturing…
A: Spending variance:It indicates the amount of actual cost incurred for actual production over the…
Q: What is the direct labor rate variance
A: Solution: Direct labor rate variance is computed as = (SR - AR) *AH Where SR = Standard rate AR =…
Q: etermine the following: Total material price variance Total material usage (quantity) variance Labor…
A: Variable overhead refers to the expenses which fluctuate with the change in the number of goods or…
Q: Requirement 1. What are the benefits of setting cost standards? Standard costing helps managers do…
A: Standard costing is a method of costing where the costs are budgeted to enhance the efficiency of…
Q: What are the factors that affect the spending variance for variable manufacturing overhead?
A: Actual prices of individual inputs included in variable overhead cost, such as price of energy,…
Q: Required: a. Determine the standard cost per faucet for direct materials and direct labor. Round the…
A: Formula: 1.Material Quantity Variance= [(Standard Quantity-Actual Quantity)*Standard Cost]…
Q: ii) Calculate the manufacturing overhead variance for Fielder and state the journal entries…
A: Indirect materials 38,000 Indirect labours (345000*20%) 69,000…
Q: Accounting Question
A: a. Compute direct material price variance, direct materials quantity variance and total direct…
Q: (a) Prepare a standard costing profit statement, and a profit statement based on actual figures for…
A:
Q: Using direct labour hours as the cost driver, the journal entry to dispose of the manufacturing…
A: “Since you have asked multiple question, we will solve the first question for you. If youwant any…
Q: Formula 1 Material Price Variance Formula 2 Material Quantity variance Formula 3 Total…
A: Calculate the materials price, material quantity, and the total material variance as follows: The…
Q: Requirement: Compute for the following, 1. Cost price variance 2. Cost volume variance 3. Total…
A: Variance analysis refers to the comparison made between two accounting or financial variables and…
Q: Required: 1. What is the application rate per direct labor hour, the total overhead cost equation,…
A: “Since you have posted a question with multiple sub-parts, we will solve first three subparts for…
Q: The credit side of the manufacturing overhead control account ha. O a. The actual overheads incurred…
A: Manufacturing overhead- It includes amount of those overhead or indirect cost which is incurred…
Q: Required: 1. Using the columnar approach, calculate the fixed overhead spending and volume…
A: Volume variance = Budgeted fixed overhead variance - (Standard hours * Standard fixed overhead rate)…
Q: Under the two-variance method for analyzing factory overhead, the difference between the actual…
A: The question is related to Standard Costing and is related to two Varaince method.
Q: e total variance for production labor fo
A: Total variance for production labor = (Standard Rate * Standard Hours) – (Actual Rate * Actual…
Q: The difference between actual factory overhead and budgeted overhead on the basis of standard direct…
A: SOLUTION- EFFICIENCY VARIANCE IS THE DIFFERENCE BETWEEN THE THEORETICAL AMOUNT OF INPUTS REQUIRED…
Q: What is total overhead variance
A: Meaning The Total Overhead Cost Variance is the difference between the total overhead absorbed and…
Q: A. Assume the variance is material, what is the variance share of the Finished goods inventory acc?…
A: Overhead means the cost incurred indirect in factory for the production of goods. Manufacturing…
Q: A. Compute the material price and quantity, and the labor rate and efficiency variances. Enter all…
A: Variance refers to the difference that is calculated by taking the actual cost that is incurred in…
Q: This refers to the difference between actual and standard hours multiplied by the standard labor…
A: Variance is the difference between actual and budgeted.
Q: Required: 1. Compute the following varlances for June: a. Materials price and quantity variances. b.…
A: “Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…
Q: 1. Compute the following variances for May: a. Materials price and quantity variances. b. Labor rate…
A: Since you have asked a question with multiple sub parts, we will solve the first three sub parts…
Q: (1) Compute the direct materials price and quantity variances. (Indicate the effect of each variance…
A: Here discuss about the different costing techniques which can be calculated for material variance…
Q: a. What is the material price usage, material quantity and total material variance D. What is the…
A: Material Quantity Variance-It is the difference between how much material used and expected to be…
Q: company uses predetermined rate for absorption of manufacturing overhead, the volume variance is…
A: Solution: If a company uses predetermined rate for absorption of manufacturing overhead, the volume…
Q: A D 1 Chapter 09: Applying Excel 2 3 Data Exhibit 9-8: Standard Cost Card 4 Inputs Standard Quantity…
A: Direct Material price variance = (Actual price per pound - Standard price per pound)*Actual quantity…
Q: If a company uses predetermined rate for absorption of manufacturing overhead, the volume variance…
A: Introduction:- A predetermined overhead rate is an allocation rate , which is used to apply the…
Q: The credit side of the manufacturing overhead control account ha O a. The actual overheads incurred…
A: Since multiple questions are posted only the first question will be answered. Kindly resubmit the…
Q: Multiple Choice The material quantity variance is recorded when overhead is applied to production.…
A: Material Quantity Variance There are several costing techniques which was used to measure the total…
Q: Compute the actual manufacturing overhead. Compute the applied manufacturing overhead. Compute the…
A: Solution:- Calculation of the actual manufacturing overheads.
Q: Determine the following: a. Total material price variance b. Total material usage (quantity)…
A: d) Calculation of standard hours: It is given that the number of units produced is 850 units and…
Q: a. Direct materials price variance b. Direct materials quantity variance c. Direct materials cost…
A: Material variance is the difference between the actual cost of direct materials and the expected…
Q: (1) Compute the direct materials price and quantity variances. (Indicate the effect of each variance…
A: Solution: Direct material quantity variance is also called as direct material usage or efficiency…
Q: 1. Calculate the total direct materials variance and total direct labour variance, together with…
A:
Q: The difference between actual factory overhead and budgeted factory overhead on the basis of actual…
A: The difference between the actual expenses and the budgeted expenses for the specific units is…
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- Yohan Company has the following balances in its direct materials and direct labor variance accounts at year-end: Unadjusted Cost of Goods Sold equals 1,500,000, unadjusted Work in Process equals 236,000, and unadjusted Finished Goods equals 180,000. Required: 1. Assume that the ending balances in the variance accounts are immaterial and prepare the journal entries to close them to Cost of Goods Sold. What is the adjusted balance in Cost of Goods Sold after closing out the variances? 2. What if any ending balance in a variance account that exceeds 10,000 is considered material? Close the immaterial variance accounts to Cost of Goods Sold and prorate the material variances among Cost of Goods Sold, Work in Process, and Finished Goods on the basis of prime costs in these accounts. The prime cost in Cost of Goods Sold is 1,050,000, the prime cost in Work in Process is 165,200, and the prime cost in Finished Goods is 126,000. What are the adjusted balances in Work in Process, Finished Goods, and Cost of Goods Sold after closing out all variances? (Round ratios to four significant digits. Round journal entries to the nearest dollar.)At the beginning of the year, Lopez Company had the following standard cost sheet for one of its chemical products: Lopez computes its overhead rates using practical volume, which is 80,000 units. The actual results for the year are as follows: (a) Units produced: 79,600; (b) Direct labor: 158,900 hours at 18.10; (c) FOH: 831,000; and (d) VOH: 112,400. Required: 1. Compute the variable overhead spending and efficiency variances. 2. Compute the fixed overhead spending and volume variances.The management of Golding Company has determined that the cost to investigate a variance produced by its standard cost system ranges from 2,000 to 3,000. If a problem is discovered, the average benefit from taking corrective action usually outweighs the cost of investigation. Past experience from the investigation of variances has revealed that corrective action is rarely needed for deviations within 8% of the standard cost. Golding produces a single product, which has the following standards for materials and labor: Actual production for the past 3 months follows, with the associated actual usage and costs for materials and labor. There were no beginning or ending raw materials inventories. Required: 1. What upper and lower control limits would you use for materials variances? For labor variances? 2. Compute the materials and labor variances for April, May, and June. Identify those that would require investigation by comparing each variance to the amount of the limit computed in Requirement 1. Compute the actual percentage deviation from standard. Round all unit costs to four decimal places. Round variances to the nearest dollar. Round variance rates to three decimal places so that percentages will show to one decimal place. 3. CONCEPTUAL CONNECTION Let the horizontal axis be time and the vertical axis be variances measured as a percentage deviation from standard. Draw horizontal lines that identify upper and lower control limits. Plot the labor and material variances for April, May, and June. Prepare a separate graph for each type of variance. Explain how you would use these graphs (called control charts) to assist your analysis of variances.
- Cost and production data for Binghamton Beverages Inc. are presented as follows: Required: Calculate net variances for materials, labor, and factory overhead. Calculate specific materials and labor variances by department, using the diagram format in Figure 8-4. Comment on the possible causes for each of the variances that you computed. Make all journal entries to record production costs in Work in Process and Finished Goods. Determine the balance of ending Work in Process in each department. Assume that 4,000 units were sold at $40 each. Calculate the gross margin based on standard cost. Calculate the gross margin based on actual cost. Why does the gross margin at actual cost differ from the gross margin at standard cost. As the plant controller, you present the variance report in Item 1 above to Paul Crooke, the plant manager. After reading it, Paul states: “If we present this performance report to corporate with that large unfavorable labor variance in Blending, nobody in the plant will receive a bonus. Those standard hours of 5,500 are way too tight for this production process. Fifty-eight hundred hours would be more reasonable, and that would result in a favorable labor efficiency variance that would more than offset the unfavorable labor rate variance. Please redo the variance calculations using 5,800 hours as the standard.” You object, but Paul ends the conversation with, “That is an order.” What standards of ethical professional practice would be violated if you adhered to Paul’s order? How would you attempt to resolve this ethical conflict?Carlo Lee Corp. has established the following standard cost per unit: Although 10,000 units were budgeted, only 8,800 units were produced. The purchasing department bought 55,000 lb of materials at a cost of $123,750. Actual pounds of materials used were 54,305. Direct labor cost was $186,550 for 18,200 hours worked. Required: Make journal entries to record the materials transactions, assuming that the materials price variance was recorded at the time of purchase. Make journal entries to record the labor variances.In all of the exercises involving variances, use F and U to designate favorable and unfavorable variances, respectively. E8-1 through E8-5 use the following data: The standard operating capacity of Tecate Manufacturing Co. is 1,000 units. A detailed study of the manufacturing data relating to the standard production cost of one product revealed the following: 1. Two pounds of materials are needed to produce one unit. 2. Standard unit cost of materials is 8 per pound. 3. It takes one hour of labor to produce one unit. 4. Standard labor rate is 10 per hour. 5. Standard overhead (all variable) for this volume is 4,000. Each case in E8-1 through E8-5 requires the following: a. Set up a standard cost summary showing the standard unit cost. b. Analyze the variances for materials and labor. c. Make journal entries to record the transfer to Work in Process of: 1. Materials costs 2. Labor costs 3. Overhead costs (When making these entries, include the variances.) d. Prepare the journal entry to record the transfer of costs to the finished goods account. Standard unit cost; variance analysis; journal entries 1,000 units were started and finished. Case 1: All prices and quantities for the cost elements are standard, except for materials cost, which is 8.50 per pound. Case 2: All prices and quantities for the cost elements are standard, except that 1,900 lb of materials were used.
- At the end of the period, the factory overhead account has a credit balance of 10,000. (a) Is the total factory cost variance favorable or unfavorable? (b) Are the controllable and volume variances favorable or unfavorable?Recompute the variances from the second Acme Inc. exercise using $0.0725 as the standard cost of the material and $14 as the standard labor cost per hour. How has your explanation of the variances changed?USD Inc. has established the following standard cost per unit: Although 10,000 units were budgeted, 12,000 units were produced. The Purchasing department bought 50,000 lb of materials at a cost of $237,500. Actual pounds of materials used were 46,000. Direct labor cost was $287,500 for 25,000 hours worked. Required: Make journal entries to record the materials transactions, assuming that the materials price variance was recorded at the time of purchase. Make journal entries to record the labor variances.
- Madison Company uses the following rule to determine whether direct labor efficiency variances ought to be investigated. A direct labor efficiency variance will be investigated anytime the amount exceeds the lesser of 12,000 or 10 percent of the standard labor cost. Reports for the past five weeks provided the following information: Required: 1. Using the rule provided, identify the cases that will be investigated. 2. Suppose that investigation reveals that the cause of an unfavorable direct labor efficiency variance is the use of lower quality direct materials than are usually used. Who is responsible? What corrective action would likely be taken? 3. Suppose that investigation reveals that the cause of a significant favorable direct labor efficiency variance is attributable to a new approach to manufacturing that takes less labor time but causes more direct materials waste. Upon examining the direct materials usage variance, it is discovered to be unfavorable, and it is larger than the favorable direct labor efficiency variance. Who is responsible? What action should be taken? How would your answer change if the unfavorable variance were smaller than the favorable?Direct materials, direct labor, and factory overhead cost variance analysis Mackinaw Inc. processes a base chemical into plastic. Standard costs and actual costs for direct materials, direct labor, and factory overhead incurred for the manufacture of 40,000 units of product were as follows: Each unit requires 0.3 hour of direct labor. Instructions Determine (A) the direct materials price variance, direct materials quantity variance, and total direct materials cost variance; (B) the direct labor rate variance, direct labor time variance, and total direct labor cost variance; and (C) the variable factory overhead controllable variance, fixed factory overhead volume variance, and total factory overhead cost variance.Direct materials and direct labor variance analysis Faucet Industries Inc. manufactures faucets in a small manufacturing facility. The faucets are made from zinc. Faucet Industries has 60 employees. Each employee presently provides 36 hours of labor per week. Information about a production week is as follows: Instructions Determine (a) the standard cost per unit for direct materials and direct labor; (h) the price variance, quantity variance, and total direct materials cost variance; and (c) the rate variance, time variance, and total direct labor cost variance.