Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN: 9781305970663
Author: Don R. Hansen, Maryanne M. Mowen
Publisher: Cengage Learning
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Textbook Question
Chapter 18, Problem 32P
Sulert, Inc., produces and sells gel-filled ice packs. Sulert’s performance report for April follows:
Required:
- 1. Calculate the contribution margin variance and the contribution margin volume variance.
- 2. Calculate the market share variance and the market size variance. (CMA adapted)
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Inc., produces chemicals for large biotech companies. It has the following data for manufacturing overhead costs during August
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Requirement
Fill in the blanks. Use F for favorable and U for unfavorable:
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(If no variance exists leave the dollar value blank. Label the variance as favorable (F), unfavorable (U) or never a variance (N).)
Variable
(1)
Spending variance
(2)
Efficiency variance
(3)
Production-volume variance
(4)
Flexible-budget variance
(5)
Underallocated (overallocated) manufacturing overhead
Fixed
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Data Table…
Razi Company is a manufacturer of the leather belt based in Kelang, Selangor. The company estimated a total of 400 units of production for the most recent period. The standard costs per unit are given below:
(see the picture)
Required
From the foregoing information, compute the following variances and indicate whether they are favorable (F) or unfavorable (U). State why each of the variances occurred.
Material price variance
Material usage variance
Direct labour rate variance
Direct labour efficiency variance
Variable overhead spending variance
Variable overhead efficiency variance
Chapter 18 Solutions
Cornerstones of Cost Management (Cornerstones Series)
Ch. 18 - Define price elasticity of demand. Give an example...Ch. 18 - What are the features of a perfectly competitive...Ch. 18 - How do you calculate the markup on cost of goods...Ch. 18 - Prob. 4DQCh. 18 - Prob. 5DQCh. 18 - Prob. 6DQCh. 18 - What is price discrimination? Is it legal?Ch. 18 - Prob. 8DQCh. 18 - Prob. 9DQCh. 18 - Suppose that Alpha Company has four product lines,...
Ch. 18 - How does absorption costing differ from variable...Ch. 18 - What are some advantages and disadvantages of...Ch. 18 - Prob. 13DQCh. 18 - Prob. 14DQCh. 18 - Describe the product life cycle. How do unit-level...Ch. 18 - Ventana Window and Wall Treatments Company...Ch. 18 - Kaune Food Products Company manufactures canned...Ch. 18 - Pattison Products, Inc., began operations in...Ch. 18 - Refer to Cornerstone Exercise 18.3. Required: 1....Ch. 18 - Saginaw Company is a garden products wholesale...Ch. 18 - Iliff, Inc., produces and sells two types of...Ch. 18 - Iliff, Inc., produces and sells two types of...Ch. 18 - Refer to Cornerstone Exercise 18.6. Required: 1....Ch. 18 - Budgeted unit sales for the entire countertop oven...Ch. 18 - Prob. 10ECh. 18 - Prob. 11ECh. 18 - Prob. 12ECh. 18 - Prob. 13ECh. 18 - Many different businesses employ markup on cost to...Ch. 18 - Flaherty, Inc., has just completed its first year...Ch. 18 - During its first year of operations, Snobegon,...Ch. 18 - Prob. 17ECh. 18 - Otero Fibers, Inc., specializes in the manufacture...Ch. 18 - Data for Torleson Company are as follows:...Ch. 18 - Eastman, Inc., manufactures and sells three...Ch. 18 - Prob. 21ECh. 18 - The following information pertains to three...Ch. 18 - Thebes Company had the following information: What...Ch. 18 - Banwood Company has the following information for...Ch. 18 - Jasmine Companys expected sales were 2,000 units...Ch. 18 - Prob. 26PCh. 18 - Snyder Company produced 90,000 units during its...Ch. 18 - The following information pertains to Vladamir,...Ch. 18 - Jellison Company had the following operating data...Ch. 18 - San Mateo Optics, Inc., specializes in...Ch. 18 - Haysbert Company provides management services for...Ch. 18 - Sulert, Inc., produces and sells gel-filled ice...Ch. 18 - Prob. 33PCh. 18 - Dana Baird was manager of a new Medical Supplies...Ch. 18 - Bill Fremont, division controller and CMA, was...Ch. 18 - Dantrell Palmer has just been appointed manager of...Ch. 18 - Prob. 37PCh. 18 - Porter Insurance Company has three lines of...Ch. 18 - Porter Insurance Company has three lines of...Ch. 18 - Olin Company manufactures and distributes...Ch. 18 - Shannon, Inc., has two divisions. One produces and...Ch. 18 - Prob. 42P
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- Data for Torleson Company are as follows: Required: 1. Calculate the sales price variance. 2. Calculate the sales volume variance. 3. Suppose that the product is in the introductory stage of the product life cycle. What information do these two variances provide to Torlesons managers?arrow_forwardMarten Company has a cost-benefit policy to investigate any variance that is greater than 1,000 or 10% of budget, whichever is larger. Actual results for the previous month indicate the following: The company should investigate: a. neither the materials variance nor the labor variance. b. the materials variance only. c. the labor variance only. d. both the materials variance and the labor variance.arrow_forwardRefer to the information for Cinturon Corporation on the previous page. Required: 1. Break down the total variance for materials into a price variance and a usage variance using the columnar and formula approaches. 2. CONCEPTUAL CONNECTION Suppose the Boise plant manager investigates the materials variances and is told by the purchasing manager that a cheaper source of leather strips had been discovered and that this is the reason for the favorable materials price variance. Quite pleased, the purchasing manager suggests that the materials price standard be updated to reflect this new, less expensive source of leather strips. Should the plant manager update the materials price standard as suggested? Why or why not?arrow_forward
- Reddy Corporation has collected the following data for the month or June: What is the variable overhead efficiency variance?arrow_forwardRecompute 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?arrow_forwardRibcos labor cost information for making its only product for March is as follows: A. What is the direct labor rate variance? B. What is the direct labor time variance? C. What is the total direct labor variance?arrow_forward
- Dickinsen Company gathered the following data for December: a.Compute the revenue price variance. b.Compute the revenue volume variance. c.Compute the total revenue variance.arrow_forwardKavallia 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?arrow_forwardIliff, Inc., produces and sells two types of countertop ovensthe toaster oven and the convection oven. Budgeted and actual data for the two models are shown below. Budgeted Amounts: Actual Amounts: Required: 1. Calculate the contribution margin variance. 2. What if actual units sold of the convection oven decreased? How would that affect the contribution margin variance? What if actual units sold of the convection oven increased? How would that affect the contribution margin variance?arrow_forward
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