Managerial Accounting (5th Edition)
5th Edition
ISBN: 9780134128528
Author: Karen W. Braun, Wendy M. Tietz
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Question
Chapter 11, Problem 11.52AP
1.
To determine
To compute: The actual number of direct labor hours worked during September.
2.
To determine
To compute: The direct labor rate and efficiency variances & to indicate if managers can have trade-offs based on these variances.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
MANAGEMENT ACCOUNTING & CONTROL
STANDARD COSTS AND VARIANCE ANALYSIS
LEARNING ACTIVITY 1
Torres Company has established standard costs for the cabinet department, in which one size of MX cabinet is made. The standard costs of producing one of these MX cabinets are shown below:
Standard Cost Card – MX Cabinet
Direct Material: Lumber 50 board ft at P 4
200
Direct Labor: 8 hours at P 10
80
Overhead Costs: Variable – 8 hrs at P5
40
Fixed – 8 hrs at P3
24
Total Standard Unit Cost
344
During June 2018, 500 of these cabinets were produced. The cost of operations during the month are shown below. There is no work in process at the beginning and end of the month.
Direct material purchased: 30,000 bf at P4.10
123,000
Direct materials used: 24,000 board ft
Direct labor: 4,200 hrs at P9.50
39,900
Overhead Costs : Variable Costs
22,000
Fixed Costs
11,000…
Critiquing a Variance Report; Preparing a Performance Report
Several years ago, Westmont Corporation developed a comprehensive budgeting system for planning and control purposes. While departmental supervisors have been happy with the system, the factory manager has expressed considerable dissatisfaction with the information being generated by the system.
A report for the company’s Assembly department for the month of march follows:
After receiving a copy of this cost report, the supervisor of the assembly department started, “These reports are super. It makes me feel really good to see how well things are going in my department. I can’t understand why those people upstairs complain so much about the reports.”
For the last several years, the company’s marketing department has chronically failed to meet the sales goals expressed in the company’s monthly budgets.
Required:
1. The company’s president is uneasy about the cost reports and would like you to evaluate their usefulness to the…
The Terminator Inc. provides on-site residential pest extermination services. The company has 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:
(picture)
Required:Is the above variance report useful for evaluating how well revenues and costs were controlled during April? Why, or why not?
Chapter 11 Solutions
Managerial Accounting (5th Edition)
Ch. 11 - (Learning Objective 1) Which of the following is...Ch. 11 - (Learning Objective 2) The direct material price...Ch. 11 - Prob. 3QCCh. 11 - Prob. 4QCCh. 11 - Prob. 5QCCh. 11 - (Learning Objective 4) Which of the following is...Ch. 11 - Prob. 7QCCh. 11 - (Learning Objective 6) Which of the following is...Ch. 11 - Prob. 9QCCh. 11 - (Learning Objective 7Appendix) Which of the...
Ch. 11 - Compute the standard cost of direct materials...Ch. 11 - Compute the standard cost of direct labor...Ch. 11 - Explain a direct material variance (Learning...Ch. 11 - Prob. 11.4SECh. 11 - Calculate direct material variances when the...Ch. 11 - Calculate direct labor variances (Learning...Ch. 11 - Prob. 11.7SECh. 11 - Prob. 11.8SECh. 11 - Calculate fixed overhead variances (Learning...Ch. 11 - Calculate and interpret fixed overhead variances...Ch. 11 - Prob. 11.11SECh. 11 - Calculate and interpret overhead variances...Ch. 11 - Record costing transactions (Learning Objective 7)...Ch. 11 - Record standard costing transactions (Learning...Ch. 11 - Identify ethical standards violated (Learning...Ch. 11 - Vocabulary (Learning Objectives 1, 2, 3, 4, 5, 6)...Ch. 11 - Calculate standard cost and gross profit per unit...Ch. 11 - Calculate standard cost per unit (Learning...Ch. 11 - Calculate and explain direct material variances...Ch. 11 - Calculate missing direct material variables...Ch. 11 - Calculate and explain direct labor variances...Ch. 11 - Calculate and interpret direct material and direct...Ch. 11 - Calculate the material and labor variances...Ch. 11 - Record materials and labor transactions (Learning...Ch. 11 - Calculate the standard cost of a product before...Ch. 11 - Recognize advantages and disadvantages of standard...Ch. 11 - Compute and interpret overhead variances (Learning...Ch. 11 - Data Set for E11-28A through E11-32A Country...Ch. 11 - Data Set for E11-28A through E11-32A Country...Ch. 11 - Data Set for E11-28A through E11-32A Country...Ch. 11 - Make journal entries in a standard costing system...Ch. 11 - Prepare a standard cost income statement (Learning...Ch. 11 - Calculate standard cost and gross profit per unit...Ch. 11 - Calculate the standard cost per unit (Learning...Ch. 11 - Calculate and explain direct material variances...Ch. 11 - Calculate missing direct material variables...Ch. 11 - Calculate and explain direct labor variances...Ch. 11 - Prob. 11.38BECh. 11 - Prob. 11.39BECh. 11 - Prob. 11.40BECh. 11 - Prob. 11.41BECh. 11 - Recognize advantages and disadvantages of standard...Ch. 11 - Calculate and interpret overhead variances...Ch. 11 - Prob. 11.44BECh. 11 - Prob. 11.45BECh. 11 - Prob. 11.46BECh. 11 - Prob. 11.47BECh. 11 - Prob. 11.48BECh. 11 - Prob. 11.49APCh. 11 - Comprehensive standards and variances problem...Ch. 11 - Comprehensive standards and variances problem...Ch. 11 - Prob. 11.52APCh. 11 - Prob. 11.53APCh. 11 - Prob. 11.54BPCh. 11 - Comprehensive standards and variances problem...Ch. 11 - Comprehensive standards and variances problem...Ch. 11 - Work backward through labor variances (Learning...Ch. 11 - Determine all variances and make journal entries...Ch. 11 - Calculate labor variances in a hotel (Learning...
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- More information Maria Ann has a policy of analyzing all input variances when they add up to more than 8% of the total cost of materials and labor in the flexible budget, and this is true in May 2017. The production manager discusses the sources of the variances: "A new type of material was purchased in May. This led to faster cutting and sewing, but the workers used more material than usual as they learned to work with it. For now, the standards are fine."arrow_forwardMANAGERIAL ACCOUNTING NEED FAST ANSWER THANKS During the last period, the managerial accountant of Red Rose Company has journalized the following variances. DM price variance 2,000 F DM quantity variance 6,000 F DL rate variance 8,000 U DL efficiency variance 2,000 F Overhead controllable variance 4,000 U Overhead volume variance 9,000 F Show the closing journal entry for all variance accounts assuming all units are produced and sold in the same period.arrow_forwardTipTop Flight School offers flying lessons at a small municipal airport. The school’s owner and manager has been attempting to evaluate performance and control costs using a variance report that compares the planning budget to actual results. A recent variance report appears below: TipTop Flight SchoolVariance ReportFor the Month Ended July 31 ActualResults PlanningBudget Variances Lessons 145 140 Revenue $ 33,110 $ 32,200 $ 910 F Expenses: Instructor wages 8,510 8,400 110 U Aircraft depreciation 4,350 4,200 150 U Fuel 2,470 1,960 510 U Maintenance 2,010 1,900 110 U Ground facility expenses 1,465 1,480 15 F Administration 3,265 3,340 75 F Total expense 22,070 21,280 790 U Net operating income $ 11,040 $ 10,920 $ 120 F After several months of using such variance reports, the owner has become frustrated. For example,…arrow_forward
- LearnCo manufactures and sells one product, an abacus for classroom use, with two models, the Basic model and the Deluxe model. The company began operations on January 1, 20Y1, and is planning for 20Y2, its second year of operations, by preparing budgets from its master budget. The company is trying to decide how many units to manufacture, how much it might spend on direct materials and direct labor, and what their factory overhead expenses might be. In addition, the company is interested in budgeting for selling and administrative costs, and in creating a budgeted income statement showing a prediction of net income for 20Y2. You have been asked to assist the controller of LearnCo in preparing the 20Y2 budgets. The sales budget often uses the prior year’s sales as a starting point, and then sales quantities are revised for various factors such as planned advertising and promotion, projected pricing changes, and expected industry and general economic conditions. LearnCo has…arrow_forwardCritique 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?arrow_forwardThe management accountant of a business is calculating the monthly variances to review and control performance.The company makes and sells one product and uses full absorption costing.The product has the following standard costs per unit:Direct materials £15 Direct labour £10 Production overhead £6The company planned to sell 1,000 units at a price of £50.Actual sales were 1,150 units and a total revenue of £56,350What was the sales volume profit variance for the month, stating clearly whether it was favourable or adverse?arrow_forward
- TipTop Flight School offers flying lessons at a small municipal airport. The school’s owner and manager has been attempting to evaluate performance and control costs using a variance report that compares the planning budget to actual results. A recent variance report appears below: TipTop Flight SchoolVariance ReportFor the Month Ended July 31 Actual Results Planning Budget Variances Lessons 140 135 Revenue $ 33,420 $ 32,400 $ 1,020 F Expenses: Instructor wages 6,875 6,750 125 U Aircraft depreciation 5,040 4,860 180 U Fuel 3,185 2,565 620 U Maintenance 2,895 2,770 125 U Ground facility expenses 1,950 2,020 70 F Administration 3,465 3,555 90 F Total expense 23,410 22,520 890 U Net operating income $ 10,010 $ 9,880 $ 130 F After several months of using these reports, the owner has become frustrated. For example, she is quite confident that instructor wages were very tightly controlled in July, but the report shows an unfavorable variance.…arrow_forwardTipTop Flight School offers flying lessons at a small municipal airport. The school’s owner and manager has been attempting to evaluate performance and control costs using a variance report that compares the planning budget to actual results. A recent variance report appears below: TipTop Flight SchoolVariance ReportFor the Month Ended July 31 Actual Results Planning Budget Variances Lessons 175 170 Revenue $ 36,640 $ 35,700 $ 940 F Expenses: Instructor wages 8,640 8,500 140 U Aircraft depreciation 6,300 6,120 180 U Fuel 2,410 1,870 540 U Maintenance 2,030 1,890 140 U Ground facility expenses 1,660 1,690 30 F Administration 3,340 3,430 90 F Total expense 24,380 23,500 880 U Net operating income $ 12,260 $ 12,200 $ 60 F After several months of using these reports, the owner has become frustrated. For example, she is quite confident that instructor wages were very tightly controlled in July, but the report shows an unfavorable variance. The…arrow_forwardAccounting Capstone - Budget Performance Variane Report Mastery Problem: Evaluating Variances from Standard Costs Question Content Area Sole Purpose Shoe Company Sole Purpose Shoe Company is owned and operated by Sarah Charles. The company manufactures casual shoes, with manufacturing facilities in your state. Sarah began the business this year, and while she has a great deal of experience in manufacturing popular and comfortable shoes, she needs some help in evaluating her results for the year, and asks for your help. Starting Questions Sarah’s first questions for you have to do with the general ideas and terminology used to evaluate variances. Provide answers to the following questions (1)-(3). 1. Why might Sarah want to use standard costs to compare with her actual costs? a. Standard costs give management a cost structure for products that is applicable for the entire life of the business. b. Standard costs allow management to motivate employees by comparing their…arrow_forward
- Please do provide the soolution for the correct answer. Thank you! Each unit of product Mindoro takes five direct labor hours to make. Quality standards are highand 8% of units produced are normally rejected due to substandard quality. Next month budgets are as follows:Beginning inventory of FG 3,000 unitsPlanned ending inventory of FG 7,600 unitsBudgeted sales of Mindoro 36,800 unitsAll stocks of finished goods must have successfully passed the quality control check. What is thedirect labor budget for the month?a. 198,720 hours b. 200,000 hours c. 223,560 hours d. 225,000 hoursarrow_forwardTerry Travers is the manufacturing supervisor of Aurora Manufacturing Company, which produces avariety of plastic products. Some of these products are standard items that are listed in the company’scatalog, while others are made to customer specifications. Each month, Travers receives a performancereport showing the budget for the month, the actual activity, and the variance between budget and actual.Part of Travers’s annual performance evaluation is based on his department’s performance against budget.Aurora’s purchasing manager, Sally Christensen, also receives monthly performance reports and she, too,is evaluated in part on the basis of these reports.The monthly reports for June had just been distributed when Travers met Christensen in the hallwayoutside their offices. Scowling, Travers began the conversation, “I see we have another set of monthlyperformance reports hand-delivered by that not very nice junior employee in the budget office. He seemedpleased to tell me that I’m in…arrow_forwardSHOW YOUR WORK!!!! During its first year of operations, Snobegon, Inc. (located in Lake Snobegon, Minnesota), produced 40,300 plastic snow scoops. Snow scoops are oversized shovel-type scoops that are used to push snow away. Unit sales were 38,400 scoops. Fixed overhead was applied at $0.75 per unit produced. Fixed overhead was underapplied by $2,500. This fixed overhead variance was closed to Cost of Goods Sold. There was no variable overhead variance. The results of the year's operations are as follows (on an absorption-costing basis): Sales (38,400 units @ $20) $768,000 Less: Cost of goods sold 546,260 Gross margin $221,740 Less: Selling and administrative expenses (all fixed) 184,500 Operating income $ 37,240 Required: 1. Calculate the cost of the firm's ending inventory under absorption costing. Round unit cost to five decimal places. Round your final answer to the nearest dollar.$_________ What is the cost of the ending inventory under variable costing? Round unit…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,
Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSON
Intermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill Education
Financial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education
What is variance analysis?; Author: Corporate finance institute;https://www.youtube.com/watch?v=SMTa1lZu7Qw;License: Standard YouTube License, CC-BY