units. For the three questions below, indicate two things: the amount of variance AND whether the variance was favorable or unfavorable. For blank one, indicate the labor price (or rate) variance. For blank two, indicate the labor efficiency variance. For blank three, indicate the total labor variance.
Q: Explain who is in the best position in the organization to influence each of these variances. a.…
A: Variance is a term used for measurement of variability. It computes the difference between the…
Q: The flexible budget variance for fixed overhead is known as the A.) Static budget variance. B.)…
A: Flexible budget variance for fixed overhead is the difference between Actual fixed overhead and…
Q: If the materials price variance is P2,400 F and the materials quantity and labor variances are each…
A: Total Materials variance = Materials price variance + Material quantity variances Total…
Q: What is the direct labor (a) rate variance, (b) time variance, and (c) cost variance? Round your…
A: Formula: Direct Labor Rate Variance= (SR-AR)AT Direct Labor Time Variance= (ST-AT)SR Direct Labor…
Q: The total overhead variance is equal to the sum of the controllable variance and the volume…
A: Answer: Total overhead variance is the difference between actual overhead and applied overhead.
Q: need help finding the: - materials price variance & the materials quantity variance - labor rate…
A:
Q: Required: Calculate the following labour variances: 1.1. Labour rate variance 1.2. Labour efficiency…
A: Labour rate variance = (Actual rate - Standard rate) x Actual hours worked = ( 4.75 - 5 ) * 510 = -…
Q: Required: a. Determine the direct materials price variance, direct materials quantity variance, and…
A: Standard costing: Standard costing consists of the setting of the predetermined estimate of costs…
Q: t variances. Select the required formulas, compute the cost variances for direct materials and…
A: Variiances ariise when the actual results differs from standard or budgeted results. There are…
Q: Assume the labor rate variance is $400 unfavorable and the labor spending varlance is $200…
A: Solution. Labor rate variance = $400 Unfavorable Labor spending variance = $200 Unfavorable Labor…
Q: Outline 2 potential causes for each of the material and labour variances calculated above (Do not…
A: The potential causes for the difference in the variance include: The differences in the actual…
Q: Accounting Question
A: a. Compute direct material price variance, direct materials quantity variance and total direct…
Q: the materials quantity variance was $18,612 unfavorable, what was the standard materials quantity…
A: Actual quantity of direct material used = 130,200 pounds Actual rate of direct material = $0.90…
Q: 1. What is meant by the total operating-income variance for a given accounting period? What…
A: 1. Explain the meaning of total operating income variance for the given accounting period, and state…
Q: 1. How is the flexible budget used within the variance analysis system to evaluate effectiveness and…
A: 1) Flexible budget refers to a budget that flexes with change in volume or change in activity. It is…
Q: A company using direct costing in its performance evaluation would normally include the following…
A: The answer is stated below:
Q: List the direct labor variances, and briefly describe each.
A: Labor variance arises when the actual expenses associated with a labor activity varies from the…
Q: 1. Material price variance, Material quantity variance, and Total material variance 2. Labor rate…
A: working notes AQ means actual quantity AP means actual price SP means standard price SQ means…
Q: Which of the following variances are most similar with respect to the manner in which they are…
A: Cost Accounting: It is the process of collecting, recording, analyzing the cost, summarizing cost,…
Q: Total gross profit variance = Price variance = Price-Quantity variance = Cost variance =…
A: Variance is the deviation between actual figures and budgeted figures. If the deviation or change is…
Q: A statistical control chart is best used for determining: A. direct-material price variances. B.…
A: Cost Accounting: It is the process of collecting, recording, analyzing the cost, summarizing cost,…
Q: Compute for the following: Sales price variance Cost price variance Quantity variance Format:…
A: Variance is calculated for comparing results either between two years or between budget and actuals.…
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: From the following particulars, calculate the following material variances and give their…
A: Solution:- a)Calculation of Material Cost variance as follows under:- It is difference between the…
Q: hich of the following factor may not be included in the computation of the total materials variance?…
A: Formula Total Material variance = (Standard cost of material allowed for actual output) – (Actual…
Q: Which of the following is a TRUE statement about the variable overhead efficiency variance when the…
A: Variable overhead efficiency variance Variable overhead variance refers to the distinguished…
Q: Give an example of a Direct Material Price Variance with figures and calculate the variance
A: Direct Material Price Variance is the difference between actual material cost and standard cost of…
Q: Why are product cost variances (DM, DL, MOH) broken down and separated into price & quantity…
A: Direct Material Variance Materials Price Variance- A variance which shows the difference between…
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: 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 set of terms describes the same type of variance? Price variance, rate…
A: The variance is calculated as difference between the actual results and standard output.
Q: Which one of the following best describes the direct material price variance? O a. The difference…
A: Direct Material price variance can be calculated by using the following formula: (AQ × SP ) -…
Q: (b) Explain the reasons why Carad Co would be interested in the material price planning variance and…
A: The variations between predicted and actual results of a manufacturing process or other commercial…
Q: Which of the following is a correct equation to calculate the fixed overhead production-volume…
A: Variances are calculated to compare the standard fixed with the actual performance of the company.
Q: The Flexible-Budget Variance is the sum of a. The static-budget variance and the sales-volume…
A: Flexible-Budget Variance = Actual results - Flexible results
Q: If the materials price variance is $3,600 F and the materials quantity and labor variances are each…
A: Description: Total materials variance: Sum of both Materials price variance and Materials quantity…
Q: Which of the following statements is true with respect to the materials price variance? Multiple…
A: Materials price variance = (Standard price - Actual price) x Actual Quantity purchased
Q: One way of analyzing the fixed factory overhead variance is breaking it down into Select one:…
A: The question is related to Fixed overhead variance of standard costing. As question just asked to…
Q: Which of the following variances cannot occur together during the same accounting period? Select…
A: Cost Accounting: It is the process of collecting, recording, analyzing the cost, summarizing cost,…
Q: in preparing variance analysis for both variable overhead and fixed overhead costs, both include…
A: The answer for the theory question on Spending variances is discussed hereunder :
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- 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?Calculating factory overhead: two variances Munoz Manufacturing Co. normally produces 10,000 units of product X each month. Each unit requires 2 hours of direct labor, and factory overhead is applied on a direct labor hour basis. Fixed costs and variable costs in factory overhead at the normal capacity are 2.50 and 1.50 per direct labor hour, respectively. Cost and production data for May follow: a. Calculate the flexible-budget variance. b. Calculate the production-volume variance. c. Was the total factory overhead under- or overapplied? By what amount?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?
- Calculating factory overhead: two variances Monrovia Manufacturing Inc. normally produces 10,000 units of product A each month. Each unit requires 4 hours of direct labor, and factory overhead is applied on a direct labor hour basis. Fixed costs and variable costs in factory overhead at the normal capacity are 10 and 5 per unit, respectively. Cost and production data for June follow: a. Calculate the flexible-budget variance. b. Calculate the production-volume variance. c. Was the total factory overhead under- or overapplied? By what amount?Variances Refer to Cornerstone Exercise 9.6. Required: 1. Calculate the variable overhead spending variance using the formula approach. (If you compute the actual variable overhead rate, carry your computations out to five significant digits and round the variance to the nearest dollar.) 2. Calculate the variable overhead efficiency variance using the formula approach. 3. Calculate the variable overhead spending variance and variable overhead efficiency variance using the three-pronged graphical approach. 4. What if 26,100 direct labor hours were actually worked in February? What impact would that have had on the variable overhead spending variance? On the variable overhead efficiency variance? Standish Company manufactures consumer products and provided the following information for the month of February: Required: 1. Calculate the fixed overhead spending variance using the formula approach. 2. Calculate the volume variance using the formula approach. 3. Calculate the fixed overhead spending variance and volume variance using the three-pronged graphical approach. 4. What if 129,600 units had actually been produced in February? What impact would that have had on the fixed overhead spending variance? On the volume variance?Standard cost summary; materials and labor cost variances Perkins Processors Inc. produces an average of 10,000 units each month. The factory standards are 20,000 hours of direct labor and 10,000 pounds of materials for this volume. The standard cost of direct labor is 9.00 per hour, and the standard cost of materials is 4.00 per pound. The standard factory overhead at this level of production is 20,000. During the current month the production and cost reports reflected the following information: On the basis of this information: 1. Prepare a standard cost summary. 2. Calculate the materials (use the materials purchase price variance) and labor cost variances, and indicate whether they are favorable or unfavorable, using the formulas on pages 421422 and 424.
- 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.Using variance analysis and interpretation Last year, Endicott Corp. adopted a standard cost system. Labor standards were set on the basis of time studies and prevailing wage rates. Materials standards were determined from materials specifications and the prices then in effect. On June 30, the end of the current fiscal year, a partial trial balance revealed the following: Standards set at the beginning of the year have remained unchanged. All inventories are priced at standard cost. What conclusions can be drawn from each of the four variances shown in Endicotts trial balance?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.
- 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.Refer to the data in Exercise 9.15. Required: 1. Compute overhead variances using a two-variance analysis. 2. Compute overhead variances using a three-variance analysis. 3. Illustrate how the two- and three-variance analyses are related to the four-variance analysis. Oerstman, Inc., uses a standard costing system and develops its overhead rates from the current annual budget. The budget is based on an expected annual output of 120,000 units requiring 480,000 direct labor hours. (Practical capacity is 500,000 hours.) Annual budgeted overhead costs total 787,200, of which 556,800 is fixed overhead. A total of 119,400 units using 478,000 direct labor hours were produced during the year. Actual variable overhead costs for the year were 230,600, and actual fixed overhead costs were 556,250. Required: 1. Compute the fixed overhead spending and volume variances. How would you interpret the spending variance? Discuss the possible interpretations of the volume variance. Which is most appropriate for this example? 2. Compute the variable overhead spending and efficiency variances. How is the variable overhead spending variance like the price variances of direct labor and direct materials? How is it different? How is the variable overhead efficiency variance related to the direct labor efficiency 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.