Variances The variances are used to calculate to the find the variation in actual cost by comparing it to the standard cost. Variances normally find the difference between cost that is actually incurred, and cost which was estimated by the business Variance Report The report which provides the details of the actual and budgeted income and expenses along with the variance is called as variance report. It shows the difference between actual and estimated financial results To describe: The normal industry standard for plants to be considered operating at full capacity.

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Answer 1

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Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

Chapter 11, Problem 11.5BYP

(a)

To determine

Variances

The variances are used to calculate to the find the variation in actual cost by comparing it to the standard cost. Variances normally find the difference between cost that is actually incurred, and cost which was estimated by the business

Variance Report

The report which provides the details of the actual and budgeted income and expenses along with the variance is called as variance report. It shows the difference between actual and estimated financial results

To describe: The normal industry standard for plants to be considered operating at full capacity.

(b)

To determine

To describe: The ideal standard of the company for hoping to achieve.

(c)

To determine

To discuss: The reason for the company does not operate a third shift.

(d)

To determine

To discuss: The some potential drawback of the midnight shift, and implication that have for variances from standards.

(e)

To determine

To describe: Potential sales/marketing disadvantage does the third shift.

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Galveston Pump Corporation is considering implementing a JIT production system. The new system would reduce current average inventory levels of $2,000,000 by 75%, but it would require a much greater dependency on the company’s core suppliers for on-time deliveries and high-quality inputs. The company’s operations manager, Frank Griswold, is opposed to the idea of a new JIT system because he is concerned that the new system (a) will be too costly to manage; (b) will result in too many stockouts; and (c) will lead to the layoff of his employees, several of whom are currently managing inventory. He believes that these layoffs will affect the morale of his entire production department. The management accountant, Bonnie Barrett, is in favor of the new system because of its likely cost savings. Frank wants Bonnie to rework the numbers because he is concerned that top management will give more weight to financial factors and not give due consideration to nonfinancial factors such as employee…

Answer 2

Question

Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

Chapter 11, Problem 11.5BYP

(a)

To determine

Variances

The variances are used to calculate to the find the variation in actual cost by comparing it to the standard cost. Variances normally find the difference between cost that is actually incurred, and cost which was estimated by the business

Variance Report

The report which provides the details of the actual and budgeted income and expenses along with the variance is called as variance report. It shows the difference between actual and estimated financial results

To describe: The normal industry standard for plants to be considered operating at full capacity.

(b)

To determine

To describe: The ideal standard of the company for hoping to achieve.

(c)

To determine

To discuss: The reason for the company does not operate a third shift.

(d)

To determine

To discuss: The some potential drawback of the midnight shift, and implication that have for variances from standards.

(e)

To determine

To describe: Potential sales/marketing disadvantage does the third shift.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 3

Question

Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

Chapter 11, Problem 11.5BYP

(a)

To determine

Variances

The variances are used to calculate to the find the variation in actual cost by comparing it to the standard cost. Variances normally find the difference between cost that is actually incurred, and cost which was estimated by the business

Variance Report

The report which provides the details of the actual and budgeted income and expenses along with the variance is called as variance report. It shows the difference between actual and estimated financial results

To describe: The normal industry standard for plants to be considered operating at full capacity.

(b)

To determine

To describe: The ideal standard of the company for hoping to achieve.

(c)

To determine

To discuss: The reason for the company does not operate a third shift.

(d)

To determine

To discuss: The some potential drawback of the midnight shift, and implication that have for variances from standards.

(e)

To determine

To describe: Potential sales/marketing disadvantage does the third shift.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 4

Question

Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

Chapter 11, Problem 11.5BYP

(a)

To determine

Variances

The variances are used to calculate to the find the variation in actual cost by comparing it to the standard cost. Variances normally find the difference between cost that is actually incurred, and cost which was estimated by the business

Variance Report

The report which provides the details of the actual and budgeted income and expenses along with the variance is called as variance report. It shows the difference between actual and estimated financial results

To describe: The normal industry standard for plants to be considered operating at full capacity.

(b)

To determine

To describe: The ideal standard of the company for hoping to achieve.

(c)

To determine

To discuss: The reason for the company does not operate a third shift.

(d)

To determine

To discuss: The some potential drawback of the midnight shift, and implication that have for variances from standards.

(e)

To determine

To describe: Potential sales/marketing disadvantage does the third shift.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 5

Chapter 11, Problem 11.5BYP

(a)

To determine

Variances

The variances are used to calculate to the find the variation in actual cost by comparing it to the standard cost. Variances normally find the difference between cost that is actually incurred, and cost which was estimated by the business

Variance Report

The report which provides the details of the actual and budgeted income and expenses along with the variance is called as variance report. It shows the difference between actual and estimated financial results

To describe: The normal industry standard for plants to be considered operating at full capacity.

(b)

To determine

To describe: The ideal standard of the company for hoping to achieve.

(c)

To determine

To discuss: The reason for the company does not operate a third shift.

(d)

To determine

To discuss: The some potential drawback of the midnight shift, and implication that have for variances from standards.

(e)

To determine

To describe: Potential sales/marketing disadvantage does the third shift.

Answer 6

Chapter 11, Problem 11.5BYP

(a)

To determine

Variances

The variances are used to calculate to the find the variation in actual cost by comparing it to the standard cost. Variances normally find the difference between cost that is actually incurred, and cost which was estimated by the business

Variance Report

The report which provides the details of the actual and budgeted income and expenses along with the variance is called as variance report. It shows the difference between actual and estimated financial results

To describe: The normal industry standard for plants to be considered operating at full capacity.

Answer 7

Chapter 11, Problem 11.5BYP

(a)

To determine

Variances

The variances are used to calculate to the find the variation in actual cost by comparing it to the standard cost. Variances normally find the difference between cost that is actually incurred, and cost which was estimated by the business

Variance Report

The report which provides the details of the actual and budgeted income and expenses along with the variance is called as variance report. It shows the difference between actual and estimated financial results

To describe: The normal industry standard for plants to be considered operating at full capacity.

Answer 8

(b)

To determine

To describe: The ideal standard of the company for hoping to achieve.

Answer 9

(b)

To determine

To describe: The ideal standard of the company for hoping to achieve.

Answer 10

(c)

To determine

To discuss: The reason for the company does not operate a third shift.

Answer 11

(c)

To determine

To discuss: The reason for the company does not operate a third shift.

Answer 12

(d)

To determine

To discuss: The some potential drawback of the midnight shift, and implication that have for variances from standards.

Answer 13

(d)

To determine

To discuss: The some potential drawback of the midnight shift, and implication that have for variances from standards.

Answer 14

(e)

To determine

To describe: Potential sales/marketing disadvantage does the third shift.

Answer 15

(e)

To determine

To describe: Potential sales/marketing disadvantage does the third shift.

Answer 16

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Answer 17

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Answer 18

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Answer 19

Ch. 11 - (a) Standard costs are the expected total cost of...Ch. 11 - (a) Explain the similarities and differences...Ch. 11 - Standard costs facilitate management planning....Ch. 11 - Standard costs facilitate management planning....Ch. 11 - Prob. 5Q Ch. 11 - What factors should be considered in setting (a)...Ch. 11 - The objective in setting the direct labor quantity...Ch. 11 - How is the predetermined overhead rate determined...Ch. 11 - What is the difference between a favorable cost...Ch. 11 - In each of the following formulas, supply the...

Solution Summary: The author explains that variances are used to calculate the variation in actual cost by comparing it to the standard cost.

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To describe: The ideal standard of the company for hoping to achieve.

To discuss: The reason for the company does not operate a third shift.

To discuss: The some potential drawback of the midnight shift, and implication that have for variances from standards.

To describe: Potential sales/marketing disadvantage does the third shift.

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Chapter 11 Solutions