Cox Company's direct material costs for the month of January were as follows: Actual quantity purchased.... Actual unit purchase price. Materials 18.000 kilograms $3.60 per kilogram price variance-unfavorable (based on purchases. Standard quantity allowed for actual production. Actual quantity used... $3.600 16,000 kilograms 15,000 kilograms For January there was a favorable direct materials quantity variance of: Select one: a. $3,800 b. 53,400 C. 53,360 o d.$3,375

Cox Company's direct material costs for the month of January were as follows: Actual quantity purchased.... Actual unit purchase price. Materials 18.000 kilograms $3.60 per kilogram price variance-unfavorable (based on purchases. Standard quantity allowed for actual production. Actual quantity used... $3.600 16,000 kilograms 15,000 kilograms For January there was a favorable direct materials quantity variance of: Select one: a. $3,800 b. 53,400 C. 53,360 o d.$3,375

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter8: Standard Costs And Variances

Section: Chapter Questions

Problem 5EA: Sitka Industries uses a cost system that carries direct materials inventory at a standard cost. The...

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Sitka Industries uses a cost system that carries direct materials inventory at a standard cost. The controller has established these standards for one ladder (unit): Sitka Industries made 3,000 ladders in July and used 8,800 pounds of material to make these units. Smith Industries bought 15,500 pounds of material in the current period. There was a $250 unfavorable direct materials price variance. A. How much in total did Sitka pay for the 15,500 pounds? B. What is the direct materials quantity variance? C. What is the total direct material cost variance? D. What ii 9,500 pounds were used to make these ladders, what would be the direct materials quantity variance? E. It there was a $340 favorable direct materials price variance, how much did Sitka pay for the 15,500 pounds of material?
Calculation of materials and labor variances Fritz Corp. manufactures and sells a single product. The company uses a standard cost system. The standard cost per unit of product follows: The charges to the manufacturing department for November, when 5,000 units were produced, follow: The Purchasing department normally buys about the same quantity as is used in production during a month. In November, 5,500 lb were purchased at a price of $2.90 per pound. Required: Calculate the following from standard costs for the data given, using the formulas on pages 421–422 and 424: Materials quantity variance. Materials purchase price variance (at time of purchase). Labor efficiency variance. Labor rate variance. Give some reasons as to why both the materials quantity variance and labor efficiency variance might be unfavorable.
Eagle Inc. uses a standard cost system. During the most recent period, the company manufactured 115,000 units. The standard cost sheet indicates that the standard direct labor cost per unit is $1.50. The performance report for the period includes an unfavorable direct labor rate variance of $3,700 and a favorable direct labor time variance of $10,275. What was the total actual cost of direct labor incurred during the period?
Refer to Cornerstone Exercise 8.13. In March, Nashler Company produced 163,200 units and had the following actual costs: Required: 1. Prepare a performance report for Nashler Company comparing actual costs with the flexible budget for actual units produced. 2. What if Nashler Companys actual direct materials cost were 1,175,040? How would that affect the variance for direct materials? The total cost variance?
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 variances Bellingham Company produces a product that requires 2.5 standard pounds per unit. The standard price is 3.75 per pound. If 15,000 units used 36,000 pounds, which were purchased at 4.00 per pound, what is the direct materials (A) price variance, (B) quantity variance, and (C) cost variance?
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.
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.)
Direct materials and direct labor variance analysis Lenni Clothing Co. manufactures clothing in a small manufacturing facility. Manufacturing has 25 employees. Each employee presently provides 40 hours of productive 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; (B) the price variance, quantity variance, and total direct materials cost variance; and (C) the rate variance, time variance, and total direct labor cost variance.
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.
Kavallia Company set a standard cost for one item at 328,000; allowable deviation is 14,500. Actual costs for the past six months are as follows: Required: 1. Calculate the variance from standard for each month. Which months should be investigated? 2. What if the company uses a two-part rule for investigating variances? The allowable deviation is the lesser of 4 percent of the standard amount or 14,500. Now which months should be investigated?
Materials and labor variances Fausto Fabricators Inc. uses a standard cost system to account for its single product. The standards established for the product include the following: The following operating data came from the records for the month: In process, beginning inventory, none. In process, ending inventory, 800 units, 80% complete as to labor; material is issued at the beginning of processing. Completed during the month, 5,600 units. Materials issued to production were 51,680 lb @ .55 per pound. Direct labor was 384,000 for 40,000 hours worked. Required: Calculate the following variances, using the diagram format in Figure 8-4. 1. Materials price. 2. Materials quantity. 3. Net materials variance. 4. Labor rate. 5. Labor efficiency. 6. Net labor variance. (Hint: Before determining the standard quantity for materials and labor, you must first compute the equivalent units of production for materials and labor.)