kk.Subject :- Accounting Lexi Belcher picked up the monthly report that Irvin Santamaria left on her desk. She smiled as her eyes went straight to the bottomline of the report and saw the favorable variance for operating income, confirming her decision to push the workers to get those last390 cases off the production line before the end of the month.But as she glanced over the rest of numbers, Lexi couldn't help but wonder if there were errors in some of the line items. She waspuzzled at how most of the operating expenses could be higher than the budget since she had worked hard to manage the productionline to improve efficiency and reduce costs. Yet the report, shown below, showed a different story.Cases produced and soldSales revenueLess variable expensesDirect materialDirect laborVariable manufacturing overheadVariable selling expensesVariable administrative expensesTotal variable expenseContribution marginLess fixed expensesFixed manufacturing overheadFixed selling expensesFixed administrative expensesTotal fixed expenseOperating incomeActual10,300$2,080,400Direct materialsDirect laborVariable overheadFixed overheadTotal standard cost per case592,650288,300226.300111,80042,6501,261,700818,700113,00085,150135,000333,150$485,550Budget9,910$1,915,000Irvin also found the standard cost card for a case of product.Standard Price$11.35 per pound$11.15 per DLH$4.40 per MH$2.40 per MH575,300271,500225,500108,60041,3001,222,200692,800115,80084,200133,500Direct materials purchased: 53,800 pounds at a total of $610,630Direct materials used: 51,400 poundsDirect labor hours worked: 25,220 at a total cost of $278,593Machine hours used: 52,000333,500$359,300Standard Quantity5.00 pounds2.40 DLH5 MHVarianceLexi picked up the phone and called Irvin. "Irvin, I don't get it. We beat the budgeted operating income for the month, but look at all theunfavorable variances on the operating costs. Can you help me understand what's going on?" "Let me look into it and I'll get back toyou, Irvin replied.Irvin gathered the following additional information about the month's performance.5 MH390 Favorable$165,400 Favorable17,350 Unfavorable16,800 Unfavorable800 Unfavorable3,200 Unfavorable1,350 Unfavorable39,500 Unfavorable125,900 Favorable2,800 Favorable950 Unfavorable1,500 Unfavorable.(350) Favorable$126,250 FavorableStandard Cost$56.7526.7622.0012.00$117.51 (a-g)Your answer is partially correct.(a-b) Calculate the direct material price variance and direct material quantity variance for the month. (If variance is zero, select "NotApplicable" and enter O for the amounts.)Direct material price varianceDirect material quantity varianceDirect labor rate varianceDirect labor efficiency variance(c-d) Calculate the direct labor rate variance and direct labor efficiency variance for the month. (Round answers to O decimal places,e.g. 1,525. If variance is zero, select "Not Applicable" and enter O for the amounts.)$Variable overhead spending variance$Variable overhead efficiency varianceFixed overhead spending varianceeTextbook and Media$Save for Later$$$467,690(e-f) Calculate the variable overhead spending variance and variable overhead efficiency variance for the month. (If variance iszero, select "Not Applicable" and enter O for the amounts.)$02,5225,580Not Applicable02,200Favorable350Favorable(g) Calculate the fixed overhead spending variance for the month. (If variance is zero, select "Not Applicable" and enter O for theamounts.)UnfavorableFavorableUnfavorableFavorableAttempts: unlimited Submit Answer

Name: kk.Subject :- Accounting Lexi Belcher picked up the monthly report tha
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Description: kk.Subject :- Accounting Lexi Belcher picked up the monthly report that Irvin Santamaria left on her desk. She smiled as her eyes went straight to the bottomline of the report and saw the favorable variance for operating income, confirming her decisi

Variance analysis is a very important technique used in management accounting, in which actual costs…

Business

Accounting

Direct material price variance Direct material quantity variance Direct labor rate variance Direct labor efficiency variance $ (c-d) Calculate the direct labor rate variance and direct labor efficiency variance for the month. (R e.g. 1,525. If variance is zero, select "Not Applicable" and enter O for the amounts.) $ tA LA 467,690 2,522 Not Applicable V 5,580 Favorable Favorable Unfavorable

Direct material price variance Direct material quantity variance Direct labor rate variance Direct labor efficiency variance $ (c-d) Calculate the direct labor rate variance and direct labor efficiency variance for the month. (R e.g. 1,525. If variance is zero, select "Not Applicable" and enter O for the amounts.) $ tA LA 467,690 2,522 Not Applicable V 5,580 Favorable Favorable Unfavorable

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter9: Evaluating Variances From Standard Costs

Section: Chapter Questions

Problem 25E: Lowell Manufacturing Inc. has a normal selling price of 20 per unit and has been selling 125,000...

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Lexi Belcher picked up the monthly report that Irvin Santamaria left on her desk. She smiled as her eyes went straight to the bottom line of the report and saw the favorable variance for operating income, confirming her decision to push the workers to get those last 310 cases off the production line before the end of the month.But as she glanced over the rest of numbers, Lexi couldn’t help but wonder if there were errors in some of the line items. She was puzzled at how most of the operating expenses could be higher than the budget since she had worked hard to manage the production line to improve efficiency and reduce costs. Yet the report, shown below, showed a different story. Actual Budget Variance Cases produced and sold 10,300 9,990 310 Favorable Sales revenue $ 2,080,600 $ 1,925,000 $ 155,600 Favorable Less variable expenses    Direct material 592,750 575,500 17,250 Unfavorable…
Lexi Belcher picked up the monthly report that Irvin Santamaria left on her desk. She smiled as her eyes went straight to the bottom line of the report and saw the favorable variance for operating income, confirming her decision to push the workers to get those last 390 cases off the production line before the end of the month.But as she glanced over the rest of numbers, Lexi couldn’t help but wonder if there were errors in some of the line items. She was puzzled at how most of the operating expenses could be higher than the budget since she had worked hard to manage the production line to improve efficiency and reduce costs. Yet the report, shown below, showed a different story. Actual Budget Variance Cases produced and sold 10,300 9,910 390 Favorable Sales revenue $ 2,081,100 $ 1,950,000 $ 131,100 Favorable Less variable expenses    Direct material 593,000 576,000 17,000 Unfavorable…
he smiled as her eyes went straight to the bottom line of the report and saw the favorable variance for operating income, confirming her decision to push the workers to get those last 310 cases off the production line before the end of the month.But as she glanced over the rest of numbers, Lexi couldn’t help but wonder if there were errors in some of the line items. She was puzzled at how most of the operating expenses could be higher than the budget since she had worked hard to manage the production line to improve efficiency and reduce costs. Yet the report, shown below, showed a different story. Actual Budget Variance Cases produced and sold 10,300 9,990 310 Favorable Sales revenue $ 2,080,600 $ 1,925,000 $ 155,600 Favorable Less variable expenses    Direct material 592,750 575,500 17,250 Unfavorable    Direct labor 288,500 272,500 16,000 Unfavorable    Variable…
Vincent 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 variance
Anu Ghai was a new production analyst at RHI, Inc., a large furniture factory in North Carolina. One of her first jobs was to update the predetermined overhead allocation rates for factory production costs. This was normally done once a year, by analyzing the previous year’s actual data, factoring in projected changes, and calculating a new rate for the coming year. What Anu found was strange. The activity rate for “ maintenance” had more than doubled in one year, and she was puzzled how that could have happened. When she spoke with Larry McAfee, the factory manager, she was told to spread the increases out over the other activity costs to “smooth out” the trends. She was a bit intimidated by Larry, an imposing and aggressive man, but she knew something wasn’t quite right. Then one night she was at a restaurant and overheard a few employees who worked at RHI talking. They were joking about the work they had done fixing up Larry’s home at the lake last year. Suddenly everything made…
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…
Nodalos Company has a maintenance shop where all kinds of trucks repairs are performed. Through the years, various labor standards have been developed to judge performance. However, during a March strike, some labor records vanished. The actual hours of input were 1,000. The direct labor variance was P 1,700, favorable. The standard labor rate was P14 per hour; however, a recent labor shortage had necessitated using higher paid labor workers for some jobs and had produced a labor rate variance for March of P400, unfavorable. 1. What are the standard hours allowed for output achieved? 2. What is the actual labor rate?
Four Seasons Industries has established direct labor performance standards for its maintenance and repair shop. However, some of the labor records were destroyed during a recent fire. The actual hours worked during August were 2,500, and the total direct labor budget variance was $1,300 unfavorable. The standard labor rate was $16 per hour, but recent resignations allowed the firm to hire lower-paid replacement worker for some jobs, and this produced a favorable rate variance of $3,500 for August. a. Calculate the actual direct labor rate paid per hour during August. b. Calculate the dollar amount of the direct labor efficiency variance for August. c. Calculate the standard direct labor hours allowed for the actual level of activity during August.
Cow, Inc. has a maintenance shop where repairs to its motor vehicles are done. During last month's labor strike, certain records were lost. The actual input of direct labor hours was 1,000 and the resulting direct labor budget variance was a favorable of Ph 3,400. The standard direct labor rate was Ph28.00 per hour, but an unexpected labor shortage necessitated the hiring of higher-paid workers for some jobs and resulted in a rate variance of Ph 800. The actual direct labor rate was? Ph 27.20 per hour Ph 28.80 per hour Ph 30.25 per hour Ph 31.40 per hour
The Fantasy Gifts Company, a maker of Holiday novelties, needs your help immediately. The company's accountant resigned without leaving adequate records or explanations for what she did. In reviewing the records, you find the following information for May: Materials Purchased Materials Used 36,000 units 23,000 units You find a copy of the budget which shows that materials were budgeted at $0.60 per unit. You know that the materials price variance is recorded at the time of purchase and you find some handwritten notes among the accountants work papers, which indicate the following: Materials price variance Materials efficiency variance $ 360 F $ 1,400 F What was the total actual cost of the direct materials purchased during May? Multiple Cholce $13,800 $21,240 $21.600
Maria Mendez is division controller andJames Dalton is division manager of the Hestor Shoe Company. Mendez has line responsibility to Dalton,but she also has staff responsibility to the company controller.Dalton is under severe pressure to achieve the budgeted division income for the year. He has askedMendez to book $200,000 of revenues on December 31. The customers’ orders are firm, but the shoes arestill in the production process. They will be shipped on or around January 4. Dalton says to Mendez, “Thekey event is getting the sales order, not shipping the shoes. You should support me, not obstruct my reachingdivision goals.” What should Mendez do if Dalton gives her a direct order to book the sales?