HORNGRENS COST ACCOUNTING CUSTOM FOR UC
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ISBN: 9780136696667
Author: Datar
Publisher: PEARSON
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Chapter 7, Problem 7.43P
Use of materials and manufacturing labor variances for benchmarking. You are a new junior accountant at In Focus Corporation, maker of lenses for eyeglasses. Your company sells generic-quality lenses for a moderate price. Your boss, the controller, has given you the latest month’s report for the lens trade association. This report includes information related to operations for your firm and three of your competitors within the trade association. The report also includes information related to the industry benchmark for each line item in the report. You do not know which firm is which, except that you know you are Firm A.
- 1. Calculate the total variable cost per unit for each firm in the trade association. Compute the percent of total for the material, labor, and variable
overhead components. - 2. Using the trade association’s industry benchmark, calculate direct materials and direct manufacturing labor price and efficiency variances for the four firms. Calculate the percent over standard for each firm and each variance.
- 3. Write a brief memo to your boss outlining the advantages and disadvantages of belonging to this trade association for benchmarking purposes. Include a few ideas to improve productivity that you want your boss to take to the department heads’ meeting.
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Use of materials and manufacturing labor variances for benchmarking. You are a new junior accountant at In Focus Corporation, maker of lenses for eyeglasses. Your company sells generic-quality lenses for a moderate price. Your boss, the controller, has given you the latest month’s report for the lens trade association. This report includes information related to operations for your rm and three of your competitors within the trade association. The report also includes information related to the industry benchmark for each line item in the report. You do not know which rm is which, except that you know you are Firm A.
Computing standard cost variances and reporting to management
Hear Smart manufactures headphone cases. During September 2018, the company produced and sold 105,000 cases and recorded the following cost data:
Requirements
Compute the cost and efficiency variances for direct materials and direct labor.
For manufacturing overhead, compute the variable overhead cost and efficiency variances and the fixed overhead cost and volume variances.
Hear Smarts management used better quality materials during September. Discuss the trade-off between the two direct material variances.
Computing standard cost variances and reporting to management
Headset manufactures headphone cases. During September 2018, the company produced 106,000 cases and recorded the following cost data:
Requirements
Compute the cost and efficiency variances for direct materials and direct labor.
For manufacturing overhead, compute the variable overhead cost and efficiency variances and the fixed overhead cost and volume variances.
Headset’s management used better-quality materials during September. Discuss the trade-off between the two direct material variances.
Chapter 7 Solutions
HORNGRENS COST ACCOUNTING CUSTOM FOR UC
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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