24th Edition

ISBN: 9781259916960

Author: Wild, John J., Shaw, Ken W.

Publisher: Mcgraw-hill Education,

Concept explainers

In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for …

Standard Costing

The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on t…

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Textbook Question

Chapter 23, Problem 13E

Exercise 23-13 Computing and interpreting materials variances P3 Chapter 23, Problem 13E, Exercise 23-13 Computing and interpreting materials variances P3 Hart Company made 3,000 bookshelves
Hart Company made 3,000 bookshelves using 22,000 board feet of wood costing $266,200. The company's direct materials standards for one bookshelf are 8 board feet of wood at $12 per board foot.

1. Compute the direct materials price and quantity variances and classify each as favorable or unfavorable.
2. Hart applies management by exception by investigating direct materials variances of more than 5% of actual direct materials costs. Which direct materials variances will Hart investigate further?

Check Price variance, $2,200 U

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Chapter 23, Problem 12E

Chapter 23, Problem 14E

Chapter 23 Solutions

Fundamental Accounting Principles

Ch. 23 - Prob. 1DQ Ch. 23 - Prob. 2DQ Ch. 23 - Prob. 3DQ Ch. 23 - Prob. 4DQ Ch. 23 - Prob. 5DQ Ch. 23 - Prob. 6DQ Ch. 23 - Prob. 7DQ Ch. 23 - Prob. 8DQ Ch. 23 - Prob. 9DQ Ch. 23 - Prob. 10DQ

Ch. 23 - Prob. 11DQ Ch. 23 - Prob. 12DQ Ch. 23 - Prob. 13DQ Ch. 23 - How can the manager of advertising sales at Google...Ch. 23 - Prob. 15DQ Ch. 23 - Prob. 16DQ Ch. 23 - Is it possible to evaluate a cost center’s...Ch. 23 - Prob. 18DQ Ch. 23 - Prob. 1QS Ch. 23 - Prob. 2QS Ch. 23 - Prob. 3QS Ch. 23 - Prob. 4QS Ch. 23 - Prob. 5QS Ch. 23 - Prob. 6QS Ch. 23 - Prob. 7QS Ch. 23 - Prob. 8QS Ch. 23 - Prob. 9QS Ch. 23 - Prob. 10QS Ch. 23 - Prob. 11QS Ch. 23 - Prob. 12QS Ch. 23 - Prob. 13QS Ch. 23 - Prob. 14QS Ch. 23 - Volume variance P3 Refer to information in QS...Ch. 23 - Prob. 16QS Ch. 23 - Prob. 17QS Ch. 23 - Prob. 18QS Ch. 23 - Prob. 19QS Ch. 23 - Prob. 20QS Ch. 23 - Prob. 21QS Ch. 23 - Prob. 22QS Ch. 23 - Prob. 23QS Ch. 23 - Prob. 24QS Ch. 23 - Exercise 23-1 Management by exception C1 Resset...Ch. 23 - Prob. 2E Ch. 23 - Exercise 23-2 Preparing flexible budgets P1 Tempo...Ch. 23 - Prob. 4E Ch. 23 - Prob. 5E Ch. 23 - Prob. 6E Ch. 23 - Prob. 7E Ch. 23 - Prob. 8E Ch. 23 - Prob. 9E Ch. 23 - Prob. 10E Ch. 23 - Prob. 11E Ch. 23 - Prob. 12E Ch. 23 - Exercise 23-13 Computing and interpreting...Ch. 23 - Prob. 14E Ch. 23 - Exercise 23-15 Direct materials and direct labor...Ch. 23 - Prob. 16E Ch. 23 - Prob. 17E Ch. 23 - Exercise 23-18A Detailed overhead variances P5...Ch. 23 - Prob. 19E Ch. 23 - Prob. 20E Ch. 23 - Prob. 21E Ch. 23 - Prob. 22E Ch. 23 - Prob. 23E Ch. 23 - Prob. 1APSA Ch. 23 - Prob. 2APSA Ch. 23 - Prob. 3APSA Ch. 23 - Prob. 4APSA Ch. 23 - Prob. 5APSA Ch. 23 - Prob. 6APSA Ch. 23 - Prob. 2BPSB Ch. 23 - Prob. 3BPSB Ch. 23 - Prob. 4BPSB Ch. 23 - Prob. 5BPSB Ch. 23 - Prob. 6BPSB Ch. 23 - Prob. 23SP Ch. 23 - Flexible budgets and standard costs emphasize the...Ch. 23 - Prob. 2AA Ch. 23 - Prob. 3AA Ch. 23 - Prob. 1BTN Ch. 23 - Prob. 2BTN Ch. 23 - Prob. 3BTN Ch. 23 - Prob. 4BTN Ch. 23 - Prob. 5BTN Ch. 23 - Training employees to use standard amounts of...

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Variance interpretation You have been asked to investigate some cost problems in the Assembly Department of Ruthenium Electronics Co., a consumer electronics company. To begin your investigation, you have obtained the following budget performance report for the department for the last quarter. Ruthenium Electronics Co.Assembly Department Quarterly Budget Performance Report Standard Quantity at Standard Rates Actual Quantity at Standard Rates Quantity Variances Direct labor 157,500 227,500 70,000 U Direct materials 297,500 385,000 87,500 U Total 455,000 612,500 157,500 U You also obtained the following reports: Ruthenium Electronics Co.Purchasing Department Quarterly Budget Performance Report Actual Quantity at Standard Rates Actual Quantity at Actual Rates Price Variance Direct materials 437,500 385,000 (52,500) F Ruthenium Electronics Co.Fabrication Department Quarterly Budget Performance Report Standard Quantity at Standard Rates Actual Quantity at Standard Rates Quantity Variances Direct labor 245,000 203,000 (42,000) F Direct materials 140,000 140,000 0 Total 385,000 343,000 (42,000) F You also interviewed the Assembly Department supervisor. Excerpts from the interview follow: Q: What explains the poor performance in your department? A: Listen, youve got to understand what its been like in this department recently. Lately, it seems no matter how hard we try, we cant seem to make the standards. Im not sure what is going on, but weve been having a lot of problems lately. Q: What kind of problems? A: Well, for instance, all this Quarter weve been requisitioning purchased parts from the material storeroom, and the parts just didnt fit together very well. Im not sure what is going on, but during most of this quarter, weve had to scrap and sort purchased partsjust to get our assemblies put together. Naturally, all this takes time and material. And thats not all. Q: Go on. A: All this Quarter the work we've been receiving from the Fabrication Department has been shoddy. I mean, maybe around 20% of the stuff that comes in from Fabrication just cant be assembled. The fabrication is all wrong. As a result we've had to scrap and rework a lot of the stuff. Naturally, this has just shot our quantity variances. Interpret the variance reports in light of the comments by the Assembly Department supervisor.
Income statement with variances Prepare an income statement through gross profit for Bellingham Company for the month ended March 31 using the variance data in Practice Exercises 23-1A through 23-4A. Assume that Bellingham sold 15,000 units at 172 per unit.
Variance interpretation You have been asked to investigate some cost problems in the Assembly Department of Ruthenium Electronics Co., a consumer electronics company. To begin your investigation, you have obtained the following budget performance report for the department for the last quarter. Ruthenium Electronics Co.Assembly Department Quarterly Budget Performance Report Standard Quantity at Standard Rates Actual Quantity at Standard Rates Quantity Variances Direct labor 157,500 227,500 70,000 U Direct materials 297,500 385,000 87,500 U Total 455,000 612,500 157,500 U You also obtained the following reports: Ruthenium Electronics Co.Purchasing Department Quarterly Budget Performance Report Actual Quantity at Standard Rates Actual Quantity at Actual Rates Price Variance Direct materials 437,500 385,000 (52,500) F Ruthenium Electronics Co.Fabrication Department Quarterly Budget Performance Report Standard Quantity at Standard Rates Actual Quantity at Standard Rates Quantity Variances Direct labor 245,000 203,000 (42,000) F Direct materials 140,000 140,000 0 Total 385,000 343,000 (42,000) F You also interviewed the Assembly Department supervisor. Excerpts from the interview follow: Q: What explains the poor performance in your department? A: Listen, youve got to understand what its been like in this department recently. Lately, it seems no matter how hard we try, we cant seem to make the standards. Im not sure what is going on, but weve been having a lot of problems lately. Q: What kind of problems? A: Well, for instance, all this Quarter weve been requisitioning purchased parts from the material storeroom, and the parts just didnt fit together very well. Im not sure what is going on, but during most of this quarter, weve had to scrap and sort purchased partsjust to get our assemblies put together. Naturally, all this takes time and material. And thats not all. Q: Go on. A: All this Quarter the work we've been receiving from the Fabrication Department has been shoddy. I mean, maybe around 20% of the stuff that comes in from Fabrication just cant be assembled. The fabrication is all wrong. As a result we've had to scrap and rework a lot of the stuff. Naturally, this has just shot our quantity variances. Interpret the variance reports in light of the comments by the Assembly Department supervisor.

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