COST ACCOUNTING
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ISBN: 9781323927397
Author: Pearson
Publisher: PEARSON
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Chapter 7, Problem 7.41P
Direct materials and manufacturing labor variances, solving unknowns. (CPA, adapted) On May 1, 2017, Bovar Company began the manufacture of a new paging machine known as Dandy. The company installed a
| Direct materials (3 lb. at $4 per lb.) | $12.00 |
| Direct manufacturing labor (1/2 hour at $20 per hour) | 10.00 |
| Manufacturing overhead (75% of direct manufacturing labor costs) | 7.50 |
| $29.50 |
The following data were obtained from Bovar’s records for the month of May:
| Debit | Credit | |
| Revenues | $125,000 | |
| Accounts payable control (for May’s purchases of direct materials) | 55,000 | |
| Direct materials price variance | $3,500 | |
| Direct materials efficiency variance | 2,400 | |
| Direct manufacturing labor price variance | 1,890 | |
| Direct manufacturing labor efficiency variance | 2,200 |
Actual production in May was 4,000 units of Dandy, and actual sales in May were 2,500 units.
The amount shown for direct materials price variance applies to materials purchased during May. There was no beginning inventory of materials on May 1, 2017 no beginning inventory of materials on May 1, 2017.
Compute each of the following items for Bovar for the month of May. Show your computations.
- 1. Standard direct manufacturing labor-hours allowed for actual output produced
Required
- 2. Actual direct manufacturing labor-hours worked
- 3. Actual direct manufacturing labor wage rate
- 4. Standard quantity of direct materials allowed (in pounds)
- 5. Actual quantity of direct materials used (in pounds)
- 6. Actual quantity of direct materials purchased (in pounds)
- 7. Actual direct materials price per pound
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Chapter 7 Solutions
COST ACCOUNTING
Ch. 7 - What is the relationship between management by...Ch. 7 - What are two possible sources of information a...Ch. 7 - Distinguish between a favorable variance and an...Ch. 7 - What is the key difference between a static budget...Ch. 7 - Why might managers find a flexible-budget analysis...Ch. 7 - Describe the steps in developing a flexible...Ch. 7 - List four reasons for using standard costs.Ch. 7 - How might a manager gain insight into the causes...Ch. 7 - List three causes of a favorable direct materials...Ch. 7 - Describe three reasons for an unfavorable direct...
Ch. 7 - How does variance analysis help in continuous...Ch. 7 - Why might an analyst examining variances in the...Ch. 7 - Prob. 7.13QCh. 7 - When inputs are substitutable, how can the direct...Ch. 7 - Benchmarking against other companies enables a...Ch. 7 - Metal Shelf Companys standard cost for raw...Ch. 7 - All of the following statements regarding...Ch. 7 - Amalgamated Manipulation Manufacturings (AMM)...Ch. 7 - Atlantic Company has a manufacturing facility in...Ch. 7 - Basix Inc. calculates direct manufacturing labor...Ch. 7 - Flexible budget. Sweeney Enterprises manufactures...Ch. 7 - Flexible budget. Bryant Companys budgeted prices...Ch. 7 - Flexible-budget preparation and analysis. Bank...Ch. 7 - Flexible budget, working backward. The Clarkson...Ch. 7 - Flexible-budget and sales volume variances....Ch. 7 - Price and efficiency variances. Sunshine Foods...Ch. 7 - Materials and manufacturing labor variances....Ch. 7 - Direct materials and direct manufacturing labor...Ch. 7 - Price and efficiency variances, journal entries....Ch. 7 - Materials and manufacturing labor variances,...Ch. 7 - Journal entries and T-accounts (continuation of...Ch. 7 - Price and efficiency variances, benchmarking....Ch. 7 - Static and flexible budgets, service sector....Ch. 7 - Flexible budget, direct materials, and direct...Ch. 7 - Variance analysis, nonmanufacturing setting. Joyce...Ch. 7 - Comprehensive variance analysis review. Ellis...Ch. 7 - Possible causes for price and efficiency...Ch. 7 - Material-cost variances, use of variances for...Ch. 7 - Direct manufacturing labor and direct materials...Ch. 7 - Direct materials efficiency, mix, and yield...Ch. 7 - Direct materials and manufacturing labor...Ch. 7 - Direct materials and manufacturing labor...Ch. 7 - Use of materials and manufacturing labor variances...Ch. 7 - Direct manufacturing labor variances: price,...Ch. 7 - Direct-cost and selling price variances. MicroDisk...Ch. 7 - Variances in the service sector. Derek Wilson...Ch. 7 - Prob. 7.47P
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