Managerial Accounting (5th Edition)
5th Edition
ISBN: 9780134128528
Author: Karen W. Braun, Wendy M. Tietz
Publisher: PEARSON
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Chapter 11, Problem 11.53AP
1.
To determine
To compute: The direct materials price and quantity variance.
2.
To determine
To compute: The direct labor rate and efficiency variances.
3.
To determine
To compute: The variable overhead rate and efficiency variances.
4.
To determine
To compute: The fixed overhead budget and volume variance.
5.
To determine
To indicate: The company’s decision for purchasing superior material wise or not and will it affect the other variances.
6.
To determine
To record: The
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Accessibility tab summary: Financial information for Patterson Incorporated, is presented in cells A4 to G14 and rows 16 to 17. A statement of requirement is presented in rows 19 to 24. A table for Standard Cost Variance Analysis - Direct Materials for student presentation is presented in cells A26 to B29 and A31 to C32. A table for Standard Cost Variance Analysis - Variable Manufacturing Overhead for student presentation is presented in cells A43 to B45 and A47 to C48. A statement of requirement is presented in row 50. A table for student presentation is presented in cell A52 to E62.
Standards for one of Patterson, Inc.'s products is shown below, along with actual cost data for the month:
Direct materials:
Standard
2.4
yards @
$2.75
per yard
$6.60
Actual
3.0
yards @
$2.70
per yard
$8.10
Direct…
Esteban Products produces instructional aids, including white boards, which use colored markers instead of chalk. These are particularly popular for conference rooms in educational institutions and executive offices of large corporations. The standard cost of materials for this product is 10 pounds at $8.50 per pound.
During the first month of the year, 3,600 boards were produced. Information concerning actual costs and usage of materials follows:
Materials purchased
35,600 lbs. @ $8.60
Materials used
35,100 lbs.
Required:
1.
Compute the materials price and usage variances.
2.
Prepare journal entries on Jan. 31 for all activity relating to materials.
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…
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...
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- Esteban Products produces instructional aids, including white boards, which use colored markers instead of chalk. These are particularly popular for conference rooms in educational institutions and executive offices of large corporations. The standard cost of materials for this product is 12 pounds at $8.75 per pound. During the first month of the year, 3,700 boards were produced. Information concerning actual costs and usage of materials follows: Materials purchased 44,000 lbs. @ $8.85 Materials used 43,500 lbs. Required: 1. Compute the materials price and usage variances. 2. Prepare journal entries on Jan. 31 for all activity relating to materials. CHART OF ACCOUNTS General Ledger ASSETS 110 Cash 120 Accounts Receivable 131 Supplies 132 Prepaid Insurance 141 Materials 142 Work in Process 143 Overhead Control 144 Finished Goods 170 Land 180 Equipment 181 Accumulated Depreciation LIABILITIES 210…arrow_forwardPLEASE PROVIDE FULL SOLUTIONS WITH EXPLAINATIONS Prepare fully labeled variance diagrams(used in Class) for manufacturing overhead splitting them between variance and fixed Denominator level in hours 40,000 Actual output in units 21,000 Std. Variable overhead rate per machine hour $2.80 Actual variable overhead incurred $117,000 Actual fixed overhead incurred $302,100 Variable overhead applied $117,600 Variable overhead Efficiency Variance $8,400 U Fixed overhead budget variance $2,100 U What is the Over/under Allocated MO for Variable MO? ______________ What is the Over/under Allocated MO for Fixed MO? ___________________ Prepare journal entries that would be made at the end of each month relating to the above variances.arrow_forwardQuality Fender uses a standard cost system and provide the following information: 1(Click the icon to view the information.) Quality Fender allocates manufacturing overhead to production based on standard direct labor hours. Quality Fender reported the following actual results for 2024: actual number of fenders produced, 20,000; actual variable overhead, $4,610; actual fixed overhead, $24,000; actual direct labor hours, 360. Read the requirements2. Requirement 1. Compute the overhead variances for the year: variable overhead cost variance, variable overhead efficiency variance, fixed overhead cost variance, and fixed overhead volume variance. Begin with the variable overhead cost and efficiency variances. Select the required formulas, compute the variable overhead cost and efficiency variances, and identify whether each variance is favorable (F) or unfavorable (U).(You may need to simply the formula based on the data provided. Abbreviations used:…arrow_forward
- HeadsetHeadset manufactures headphone cases. During September 20182018, the company produced and sold 108 comma 000108,000 cases and recorded the following cost data: LOADING... (Click the icon to view the cost data.) Read the requirements LOADING... . Requirement 1. Compute the cost and efficiency variances for direct materials and direct labor. Begin with the cost variances. Select the required formulas, compute the cost variances for direct materials and direct labor, and identify whether each variance is favorable (F) or unfavorable (U).(Abbreviations used: AC = actual cost; AQ = actual quantity; FOH = fixed overhead; SC = standard cost; SQ = standard quantity.) Formula Variance Direct materials cost variance = = Direct labor cost variance = = Next compute the efficiency variances. Select the required formulas, compute the efficiency variances for direct materials and…arrow_forwardAverage labor cost for the first 700 units of a product is RO 50 and the average labor cost of first 1400 units is RO 45. Average time per unit is 100 minutes. The learning ratio and the average labour cost for first 2800 units will be: a. 80% and RO 36.000 b. 90% and RO 40.500 c. 85% and RO 38.250 d. 95% and RO 42.750arrow_forwardYour company has received an order for 20 units of aproduct. Th e labor cost to produce the item is $9.50 per hour. Th esetup cost for the item is $60 and material costs are $25 per unit. Th e item is sold for $92. Th e learning rate is 80 percent. Overheadis assessed at a rate of 55 percent of unit labor cost.(a) Determine the average unit cost for the 20 units if the fi rstunit takes four hours.(b) Determine the minimum number of units that need to bemade before the selling price meets or exceeds the averageunit cost.arrow_forward
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- Fiberworks Company is a manufacturer of fiberglass toy boats. The company has recently implemented a standard cost system and has designed the system to isolate variances as soon as possible. During the month of May, the following results were reported for the production of 25,500 toy boats: Direct materials (fiberglass) purchased 49,900 pounds Direct materials issued into production 39,900 pounds Standard pounds allowed per boat 1.5 pounds Standard price per pound $6.52 Cost of fiberglass purchased $306,386 Required: Calculate the direct materials usage variance for May. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).)arrow_forwardLearnCo 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. Sales Budget 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.…arrow_forwardAssume the same information for Northern Defense as in Exercise 10-33, except that Northern Defense uses an 85% incremental unit-time learning model as a basis for predicting direct manufacturing labor-hours. (An 85% learning curve means b = -0.234465.) Q. Calculate the total variable costs of producing 2, 3, and 4 units.arrow_forward
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