Loose-leaf for Managerial Accounting - Standalone book
15th Edition
ISBN: 9780077522940
Author: Ray H Garrison, Eric Noreen, Peter C. Brewer Professor
Publisher: McGraw-Hill Education
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Chapter 10, Problem 15P
PROBLEM 10-15 Comprehensive
Miller Toy Company manufactures a plastic swimming pool at its Westwood Plant. The plant has been experiencing problems as shown by its June contribution format income statement below:
Flexible Budget
Actual
‘Contains direct materials, direct labor, and variable manufacturing overhead.
Janet Dunn, who has just been appointed general manager of the Westwood Plant, has been given instructions to “get things under control? Upon reviewing the plant’s income statement, Ms. Dunn has concluded that the major problem lies in the variable cost of goods sold. She has been provided with the following
| Standard Quantity or Hours | Standard Price or Rate | Standard Cost | |
| Direct materials | 3.0 pounds |
$5.00 per pound | $15.00 |
| Direct labor | 0.8 hours |
$16.00 per hour | 12.80 |
| Variable manufacturing overhead | 0.4 hours' |
$3.00 per hour | 1.20 |
| Total standard cost per unit | $29.00 |
'Based on machine-hours.
During June the plant produced 15:000 pools and incurred the following costs:
- Purchased 60:000 pounds of materials at a cost of $4.95 per pound.
- Used 49,200 pounds of materials in production. (Finished goods and work in process inventories are insignificant and can be ignored.)
- Worked 11,800 direct labor-hours at a cost of SI7.00 per hour.
- Incurred variable
manufacturing overhead cost totaling S18,290 for the month. A total of 5,900 machine-hours was recorded. It is the company’s policy to close all variances to cost of goods sold on a monthly basis.
Required:
- Compute the following variances for June: a Materials price and quantitv variances.
- Labor rate and efficiency variances.
- Variable overhead rate and efficiency variances.
- Summarize the variances that you computed in (1) above by showing the net overall fas orable or unfavorable variance for the month. What impact did this figure have on the company’s income statement9 Show computations.
- Pick out the two most significant variances that you computed in (1) above. Explain to Ms. Dunn possible causes of these variances.
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Question 2 : a company produces chemicals for large biotech companies. It has the following data fo
manufacturing overhead costs during August 2017
Variable
$35,000
Fixed
$16,500
Actual costs incurred
Costs allocated to products
Flexible budget
Actual input x budgeted rate
36,000
15,200
16,000
31,500
Fill in the blanks. Use F for favorable and U for unfavorable:
Variable
Fixed
(1) Spending variance
(2) Efficiency variance
(3) Production-volume variance
(4) Flexible-budget variance
(5) Underallocated (overallocated) manufacturing overhead
I need part 4 and 5 solution
The Henry company made the following data available from its accounting records and reports.
600,000 estimated factory overhead = Rs.3.00
200,000 estimated direct labor hours
Further analysis indicates that one-third of the rate is variable cost oriented.
During the year, the company worked 210,000 direct labor hours and actual factory overhead expenditures were Rs.631,000.
Requirement:
Fixed FOH
Under or overapplied FOH
Spending Variance
Volume variance
Solve the problem if variable cost is 2/3 of applied rate.
Critique a Variance Report
The Terminator Inc. provides on-site residential pest extermination services. The company bas several mobile teams who are dispatched from a central location in company-owned trucks. The company uses the number of jobs to measure activity. At the beginning of April, the company budgeted for 100 jobs, but the actual number of jobs turned out to be 105. A report comparing the budgeted revenues and costs to the actual revenues and costs appears below:
Required:
Is the above variance report useful for evaluating how well revenues and costs were controlled during April? Why or Why not?
Chapter 10 Solutions
Loose-leaf for Managerial Accounting - Standalone book
Ch. 10.A - EXERCISE 10A-1 Fixed Overhead Variances LO10-4...Ch. 10.A - EXERCISE 10A-2 Predetermined Overhead Rate;...Ch. 10.A - Prob. 3ECh. 10.A - EXERCISE 10A-4 Fixed Overhead Variances LO10-4...Ch. 10.A - EXERCISE 10A5 Using Fixed Overhead Variances LO104...Ch. 10.A - EXERCISE 10A-6 Predetermined Overhead Rate LO10-4...Ch. 10.A - EXERCISE 10A-7 Relations Among Fixed Overhead...Ch. 10.A - Prob. 8PCh. 10.A - PROBLEM 10A-9 Applying Overhead; Overhead...Ch. 10.A - PROBLEM 10A-10 Comprehensive Standard Cost...
Ch. 10.A -
PROBLEM 10A-11 Comprehensive Standard Cost...Ch. 10.A - Prob. 12PCh. 10.B - Prob. 1ECh. 10.B - Prob. 2ECh. 10.B - Prob. 3PCh. 10.B - Prob. 4PCh. 10.B - Prob. 5CCh. 10 - Prob. 1QCh. 10 - Why are separate price and quantity variances...Ch. 10 - 10-3 Who is generally responsible for the...Ch. 10 - The materials price variance can be computed at...Ch. 10 - 10-5 If the materials price variance is favorable...Ch. 10 - Prob. 6QCh. 10 - Prob. 7QCh. 10 - 10-8 What effect, if any, would you expect...Ch. 10 - 10-9 If variable manufacturing overhead is applied...Ch. 10 - 10-10 Why can undue emphasis on labor efficiency...Ch. 10 -
The Excel worksheet form that appears below is to...Ch. 10 - Prob. 2AECh. 10 - Prob. 1F15Ch. 10 - Prob. 2F15Ch. 10 - Prob. 3F15Ch. 10 - Prob. 4F15Ch. 10 - Prob. 5F15Ch. 10 - Prob. 6F15Ch. 10 - Prob. 7F15Ch. 10 - Prob. 8F15Ch. 10 - Prob. 9F15Ch. 10 - Preble Company manufactures one product. Its...Ch. 10 - Prob. 11F15Ch. 10 - Prob. 12F15Ch. 10 - Prob. 13F15Ch. 10 - Prob. 14F15Ch. 10 - Prob. 15F15Ch. 10 - EXERCISE 10-1 Direct Materials Variances LO10-1...Ch. 10 -
EXERCISE 10-2 Direct Labor Variances...Ch. 10 -
EXERCISE 10–3 Variable Overhead Variances...Ch. 10 - EXERCISE 10-4 Direct Labor and Variable...Ch. 10 -
EXERCISE 10-5 Working Backwards from Labor...Ch. 10 - EXERCISE 10-6 Direct Materials and Direct Labor...Ch. 10 - EXERCISE 10-7 Direct Materials Variances LOIO-1...Ch. 10 -
EXERCISE 10-8 Direct Materials and Direct Labor...Ch. 10 -
PROBLEM 10-9 Comprehensive Variance Analysis...Ch. 10 -
PROBLEM 10-10 Multiple Products, Materials, and...Ch. 10 - PROBLEM 10-11 Direct Materials and Direct Labor...Ch. 10 - PROBLEM 10-12 Variance Analysis in a...Ch. 10 - Prob. 13PCh. 10 - Prob. 14PCh. 10 - PROBLEM 10-15 Comprehensive Variance Analysis...Ch. 10 - Prob. 16PCh. 10 - Prob. 17C
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What is variance analysis?; Author: Corporate finance institute;https://www.youtube.com/watch?v=SMTa1lZu7Qw;License: Standard YouTube License, CC-BY