Comment on the following statement made by a plant manager: “Meetings with my plant accountant are frustrating. All he wants to do is pin the blame on someone for the many variances he reports.”
Q: An unfavorable fixed overhead volume variance can be due to all of the following except a.employee…
A: The correct answer is option b. increase in utility costs.
Q: Which of the following would produce a materials price variance? Select one: a. An excess number…
A: Variance analysis is the one that shows the disparity between the actual costs incurred and the cost…
Q: In gross profit analysis, if the cost variance is zero, such variance indicates that a.…
A: Gross profit analysis is used to find the reasons for difference between the Gross profit margin for…
Q: In a manufacturing environment, like the GM truck plant in Flint, who has primary responsibility for…
A: Sales Volume Variance is the difference between actual units and budgeted units sold which is…
Q: Mention some important factors that must be born in your mind while interpreting variances.
A: Variance analysis is defined as the quantitative investigation, which is also a difference between…
Q: If there is an unfavorable direct material usage variance due to the substandard quality of the raw…
A: Solution: If there is an unfavorable direct material usage variance due to the substandard quality…
Q: Our production department has been showing a high amount of raw material waste this last period. Our…
A: In accounting material yield variance refers to the difference between actual amount of material…
Q: Examine the main reasons why manufacturing companies are more sensitive to material price variances,…
A: (a) The main reasons why manufacturing companies are more sensitive to material price variances, as…
Q: Alex Company has a large underapplied overhead balance in the manufacturing overhead account. This…
A: Overhead Cost Overhead cost includes all the indirect expenses incurred by an organization for…
Q: Which one of the following would not explain an adverse direct labor efficiency variance? Group of…
A: Lets understand some basic of direct labor efficiency variance. Direct labor efficiency variance is…
Q: Samsung monitors its overhead. In an analysis of overhead cost variances, what is the controllable…
A: Controllable Variance: Controllable Variance is used for the factory overhead variances.…
Q: Top management notices a variation from budget and an investigation of the difference reveals that…
A: Controllable budget and Investigation variation: The "rate" part of a variation is referred to as a…
Q: How does persistent favorable variances in an employees cost performance create a management…
A: Favorable Variance: When the actual costs are lower than the standard, (or when the actual revenue…
Q: Lynx Corp. manufactures windows and doors. Lynx has been using a standard cost system that bases…
A: 1. List the types of variances that are recommended to company L. Company L should calculate…
Q: What would be the most likely cause of an unfavorable pay rate variance together with a favorable…
A: when we talk in context of the counting the variance implements the difference between the busted…
Q: Calculate the fixed factory overhead volume variance and state why it is favorable or unfavorable.…
A: Fixed factory overhead volume variance = Applied Fixed Overhead – Budgeted Fixed Overhead Applied…
Q: Required: 1. On the basis of the information contained in the performance report, should Santa Rosa…
A: Since you have posted a question with multiple sub-parts, we will solve first three subparts for…
Q: a. Analyze the factory overhead variance of Golden Manufacturers Inc., based on the given data.
A: Factory Overhead means all indirect costs related to factory or production of goods. Factory…
Q: 1. If demand is insufficient to keep everyone busy and workers are not laid off, which of the…
A: Hey, since there are multiple questions posted, we will answer first question. If you want any…
Q: *Rooney uses flexible budgets for performance evaluation. Required a. Prepare a responsibility…
A: The responsibility performance report is the budget which shows the comparison between the budgeted…
Q: Lynx Corp. manufactures windows and doors. Lynx has been using a standard cost system that bases…
A: 1. L should calculate efficiency variances and cost variances for every kind of direct material…
Q: Which of the following would explain an unfavorable variable overhead efficiency variance? (1)…
A: Unfavorable Variable overhead efficiency variance refers to a situation when Actual labor hour>…
Q: Q.Explain in details with example:- Control and Cost Reduction are the two important factors by…
A: To earn a profit is the main goal of every business.
Q: Which of the following statements might cause a labor rate variance? Group of choices: Hiring of…
A: Labor rate variance is a deviation between actual rates paid to labourers and standard rates. In…
Q: Please confirm the correct answer among the bold-fond choices. Assume that Cabanarama develops the…
A: Variance analysis: It is the theory of deviations between actual results and planned behaviour in…
Q: Away, as discussed in the chapter opener, uses a costing system with standard costs for direct…
A: Variance: Variance refers to the difference level in the actual cost incurred and standard cost. The…
Q: Which of the following statements is incorrect with regards to production variances? Select…
A: Production variance refers to form of measure which is used to compute the cost of production of…
Q: Which of the following is a possible cause of an unfavorable material quantity variance? A) paying…
A: Variance refers to a change between the expected value and the actual result. This term is usually…
Q: which of the following is a possible cause of an unfavorable labor efficiency variance? A. hiring…
A: The difference between the Standard labour Cost for actual hours worked and actual wages paid is…
Q: Why is the identification of favorable and unfavorable variances so important to a company? How can…
A: Introduction: Every business creates Standard Costs for a range of goods and services. It uses these…
Q: The budgeted variable selling, and administrative expense is calculated by multiplying the budgeted…
A: Answer: False, The budgeted selling Variable expense is computed on the Budgeted sale units but the…
Q: Standard Costing and Variance Analysis Standard cost systems set budgets for the materials, labor,…
A: Standard costing is a costing strategy for establishing performance standards that allow firms to…
Q: If a purchasing manager is able to buy direct materials required in the manufacturing of a product…
A: Total direct material variance: Total direct material variance is the result of difference between…
Q: Which of the following statements are true? a. The standard price of materials should include…
A: Solution: a. True, standard price of materials should include delivery charges and any discount b.…
Q: Which of the following would produce a labor rate variance? A. Poor quality materials causing…
A: The correct option is B.
Q: Which of the following statements is true of performance reporting? A. Responsibility reports…
A: Performance reporting refers to a process of reporting the performance of any particular thing. It…
Q: A company product has used more material to produce than the standard amount but takes fewer labor…
A: The correct option with proper explanation are as follows
Q: When variances have been determined, management should, decide whether each variance is sufficiently…
A: Variance analysis is usually undertaken by manufacturing organizations that involve direct…
Q: As long as the total actual factory overhead cost is not significantly different from the total…
A: Solution: I do not agree with this statement that "As long as the total actual factory overhead cost…
Q: Which one of the following may account for an adverse labour efficiency variance? O a. Using higher…
A: Labor Efficiency is the productivity of the labor employed and measures whether the labor is able to…
Q: A business is reporting on materials cost variances for the month. The report indicates a large…
A: Material Price Variance Material Price variance is defined as the difference between Actual price…
Q: Bill Wilson, the financial accountant at Robson Ltd is considering implementing a standard costing…
A: Standard Costing - It is the process of estimation of expenses of the production process. It is cost…
Comment on the following statement made by a plant manager: “Meetings with my plant accountant are frustrating. All he wants to do is pin the blame on someone for the many variances he reports.”
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- What internal control or procedure(s) would provide protection against the following threats? A factory supervisor wrote off a robotic assembly machine as being sold for salvage but actually sold the machine and pocketed the proceeds. A factory supervisor accessed the production planning file and inflated the standards for work completed in his department. Consequently, future performance reports show favorable budget variances for that department. Overproduction of a slow-moving product resulted in excessive inventory that had to eventually be marked down and sold at a lossVincent Bassani has come to the accounting department for help in interpreting his variance report. He says that he understands that last month was not a very good one for output, but he really thought everyone put forth good effort, so he is confused about the existence of an unfavorable labor efficiency variance. He cites as an example of the workers' effort their willingness to work extra hours to get full output, even when a whole week's worth of production had to be scrapped. He knew that his materials costs would be higher, and that overtime would make his rate variance unfavorable, but he certainly didn't think his workers had been inefficient. Required: Write a short note to Vincent explaining the probable cause of the unfavorable labor efficiency varianceBrandt Gardner, the owner-manager of a small firm that manufactures feed processing equipment and round-hay bailers, is unhappy with the latest report on financial performance in the Kansas City, Missouri, plant. The company had recently installed a standard cost system in the Kansas City plant with the objective of controlling manufacturing costs. The performance report for the year ended revealed that the variances for materials, labor, and variable overhead were all within the desired ranges, but the fixed overhead spending and volume variances were both significantly unfavorable. Brandt wanted an explanation of the fixed overhead variances and a recommendation. Which do you think is more important for control of fixed overhead costs: the spending variance or the volume variance? Explain.
- In a manufacturing environment, like the GM truck plant in Flint, who has primary responsibility for the sales volume variance?Drew Castello, general manager of Sunflower Manufacturing, was frustrated. He wanted the budgeted results, and his staff was not getting them to him fast enough. Drew decided to pay a visit to the accounting office, where Jeff Hollingsworth was supposed to be working on the reports. Jeff had recently been hired to update the accounting system and speed up the reporting process. “What’s taking so long?” Drew asked. “When am I going to get the variance reports?” Jeff sighed and attempted to explain the problem. “Some of the variances appear to be way off. We either have a serious problem in production, or there is an error in the spreadsheet. I want to recheck the spreadsheet before I distribute the report.” Drew pulled up a chair, and the two men went through the spreadsheet together. The formulas in the spreadsheet were correct and showed a large unfavorable direct labor efficiency variance. It was time for Drew and Jeff to do some investigating. After looking at the time records, Jeff…Drew Castello, general manager of Sunflower Manufacturing, was frustrated. He wanted the budgeted results, and his staff was not getting them to him fast enough. Drew decided to pay a visit to the accounting office, where Jeff Hollingsworth was supposed to be working on the reports. Jeff had recently been hired to update the accounting system and speed up the reporting process. “What’s taking so long?” Drew asked. “When am I going to get the variance reports?” Jeff sighed and attempted to explain the problem. “Some of the variances appear to be way off. We either have a serious problem in production, or there is an error in the spreadsheet. I want to recheck the spreadsheet before I distribute the report.” Drew pulled up a chair, and the two men went through the spreadsheet together. The formulas in the spreadsheet were correct and showed a large unfavorable direct labor efficiency variance. It was time for Drew and Jeff to do some investigating. After looking at the time records, Jeff…
- The head of production at your manufacturing facility said, “Our manufacturing processes are doing great. All our variances for materials, labor, and overhead are favorable. Actual costs for all our products are far below standard costs. We are killing it!” You, as company controller, just shake your head and think of how your respond to the head of production. What would you say?The president of McGrade Industries wants an analysis prepared to help explain why the variances computed in requirement 1 occurred. Using the worksheet called PRIMEVAR that follows these requirements, calculate the material and labor variances for McGrade Industries. The problem requires you to enter the input in the Data Section as well as formulas in the Answer Section.Refer to the information for Cinturon Corporation on the previous page. Required: 1. Break down the total variance for labor into a rate variance and an efficiency variance using the columnar and formula approaches. 2. CONCEPTUAL CONNECTION As part of the investigation of the unfavorable variances, the plant manager interviews the production manager. The production manager complains strongly about the quality of the leather strips. He indicates that the strips are of lower quality than usual and that workers have to be more careful to avoid a belt with cracks and more time is required. Also, even with extra care, many belts have to be discarded and new ones produced to replace the rejects. This replacement work has also produced some overtime demands. What corrective action should the plant manager take?
- In the book Advanced Managerial Accounting, Robert P. Magee discusses monitoring cost variances. A cost variance is the difference between a budgeted cost and an actual cost. Magee describes the following situation: Michael Bitner has responsibility for control of two manufacturing processes. Every week he receives a cost variance report for each of the two processes, broken down by labor costs, materials costs, and so on. One of the two processes, which we'll call process A , involves a stable, easily controlled production process with a little fluctuation in variances. Process B involves more random events: the equipment is more sensitive and prone to breakdown, the raw material prices fluctuate more, and so on. "It seems like I'm spending more of my time with process B than with process A," says Michael Bitner. "Yet I know that the probability of an inefficiency developing and the expected costs of inefficiencies are the same for the two processes. It's just the magnitude of…You brought your work home one evening, and your nephew spilled his chocolate milk shake on the variance report you were preparing. Fortunately, knowing that overhead was applied based on machine hours, you were able to reconstruct the obliterated information from the remaining data. Fill in the missing numbers below. Note: Round your per machine hour and per unit answers to two decimal places. Indicate the effect of the variance by selecting "Positive" or "Negative". Select "None" and enter "0" for no effect (i.e., zero variance). Standard Machine hours per unit of output 5 hours Standard Variable-overhead rate per machine hour $9 Actual variable-overhead rate per mchine hours ? Actual machine hours per unit of output ? Budgeted fixed overhead $27,500 Actual fixed overhead ? Budgeted production in units 11,000 Actual production in units…Why is the identification of favorable and unfavorable variances so important to a company? How can the identification of the variances help management control costs? Please explain. As you are considering the flexible budgeting topic of the week, it is important for you to look at this analysis as a significant contribution to the management of the company. Knowing what the bottom line profit or loss is important. But what is more important is to understand how your actual results varied in terms of units sold versus how the actual cost of each unit differed from the budget.