MANAGERIAL ACCOUNTING ACCT 2302 >IC<
5th Edition
ISBN: 9781259690440
Author: Wild
Publisher: MCG CUSTOM
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Question
Chapter 8, Problem 6E
To determine
Concept introduction:
Variance: The term variance is used under standard costing system. Variance is actually the difference between the standard amount and actual amount. The variance can be calculated for costs and revenues.
To identify:
Variances with greatest concerns.
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Calculate the spending variances for March. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (I.E., zero variance) Input all amounts as positive values.)
What characteristics of the variance pattern shown in the report should draw the controller’s attention, regardless of the usual investigation rule?
Which of the following is the best reason to also follow up on favorable variances?
Bias in investigation targets and subsequent reports is reduced.
Favorable variances occur more often as activity levels rise.
Production efficiencies may be able to be replicated elsewhere in the organization.
Which of the following statements is true of performance reporting?
A.
Responsibility reports should focus on the person responsible for unfavorable variances, rather than information.
B.
Every variance, regardless of magnitude, must be investigated by the managers.
C.
Managers should not be held accountable for uncontrollable variances.
D.
Only unfavorable variances in the reports should be explained.
Chapter 8 Solutions
MANAGERIAL ACCOUNTING ACCT 2302 >IC<
Ch. 8 - Prob. 1MCQCh. 8 - Prob. 2MCQCh. 8 - Prob. 3MCQCh. 8 - A Company’s standard for a unit of its single...Ch. 8 - Prob. 5MCQCh. 8 - Prob. 1DQCh. 8 - Prob. 2DQCh. 8 - Prob. 3DQCh. 8 - Prob. 4DQCh. 8 - Prob. 5DQ
Ch. 8 - Prob. 6DQCh. 8 - Prob. 7DQCh. 8 - Prob. 8DQCh. 8 - Prob. 9DQCh. 8 - Prob. 10DQCh. 8 - Prob. 11DQCh. 8 - Prob. 12DQCh. 8 - Prob. 13DQCh. 8 - Prob. 14DQCh. 8 - Prob. 15DQCh. 8 - Prob. 16DQCh. 8 - Prob. 1QSCh. 8 - Prob. 2QSCh. 8 - Prob. 3QSCh. 8 - Prob. 4QSCh. 8 - Prob. 5QSCh. 8 - Prob. 6QSCh. 8 - Managers use management by exception for control...Ch. 8 - Tercer report the following on one of its...Ch. 8 - Prob. 9QSCh. 8 - Materials cost variances P2 Juan Company’s output...Ch. 8 - The following information describes a companys...Ch. 8 - Prob. 12QSCh. 8 - Fogel Co. expects 116,000 units for the year. The...Ch. 8 - AizPro Corp, reports the following for November....Ch. 8 - Refer to information in QS 8-14. Compute the...Ch. 8 - Prob. 16QSCh. 8 - A Preparing overhead entries P5 Refer to the...Ch. 8 - Mosaic Company applies overhead using machine...Ch. 8 - Refer to the information from QS 8-18. Compute the...Ch. 8 - Farad, Inc., specializes in selling used SUVs....Ch. 8 - In a recent year, BMW sold 216,944 of its 1 series...Ch. 8 - JPAK Company manufactures and sells mountain...Ch. 8 - Prob. 2ECh. 8 - Prob. 3ECh. 8 - Prob. 4ECh. 8 - Prob. 5ECh. 8 - Prob. 6ECh. 8 - Prob. 7ECh. 8 - Exercise 21-8 Standard unit cost; total variance...Ch. 8 - Prob. 9ECh. 8 - Prob. 10ECh. 8 - Prob. 11ECh. 8 - Prob. 12ECh. 8 - Prob. 13ECh. 8 - Refer to Exercise 8-13. Hart Company records...Ch. 8 - Prob. 15ECh. 8 - After evaluating Null Companys manufacturing...Ch. 8 - Prob. 17ECh. 8 - Prob. 18ECh. 8 - Exercise 21-19 Computation of total overhead rate...Ch. 8 - Prob. 20ECh. 8 - Prob. 21ECh. 8 - Prob. 22ECh. 8 - Prob. 23ECh. 8 - Phoenix Companys 2015 master budget included the...Ch. 8 - Prob. 2PSACh. 8 - Prob. 3PSACh. 8 - Prob. 4PSACh. 8 - Prob. 5PSACh. 8 - Prob. 6PSACh. 8 - Tohono Companys 2015 master budget included the...Ch. 8 - Refer to the information in Problem 8-1B. Tohono...Ch. 8 - Prob. 3PSBCh. 8 - Prob. 4PSBCh. 8 - Prob. 5PSBCh. 8 - Problem 21-6BA Materials, labor, and overhead...Ch. 8 - (This serial problem began in Chapter 1 and...Ch. 8 - Prob. 1BTNCh. 8 - Prob. 2BTNCh. 8 - Prob. 3BTNCh. 8 - The reason we use the words favorable when...Ch. 8 - Prob. 5BTNCh. 8 - Prob. 6BTNCh. 8 - Prob. 7BTNCh. 8 - Prob. 8BTNCh. 8 - Prob. 9BTN
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- Acme Inc. has the following information available: A. Compute the material price and quantity, and the labor rate and efficiency variances. B. Describe the possible causes for this combination of favorable and unfavorable variances.arrow_forwardWhat is the cause of an unfavorable volume variance? Does the volume variance convey any meaningful information to managers?arrow_forwardSommers Company uses the following rule to determine whether materials usage variances should be investigated: A materials usage variance will be investigated anytime the amount exceeds the lesser of 12,000 or 10% of the standard cost. Reports for the past 5 weeks provided the following information: Required: 1. Using the rule provided, identify the cases that will be investigated. 2. CONCEPTUAL CONNECTION Suppose investigation reveals that the cause of an unfavorable materials usage variance is the use of lower-quality materials than are normally used. Who is responsible? What corrective action would likely be taken? 3. CONCEPTUAL CONNECTION Suppose investigation reveals that the cause of a significant unfavorable materials usage variance is attributable to a new approach to manufacturing that takes less labor time but causes more material waste. Examination of the labor efficiency variance reveals that it is favorable and larger than the unfavorable materials usage variance. Who is responsible? What action should be taken?arrow_forward
- The president of McGrade Industries wants an analysis prepared to help explain why the variances computed in requirement 1 occurred. Using the worksheet called PRIMEVAR that follows these requirements, calculate the material and labor variances for McGrade Industries. The problem requires you to enter the input in the Data Section as well as formulas in the Answer Section.arrow_forwardThis variance is the difference involving spending more or using more than the standard amount. A. favorable variance B. unfavorable variance C. no variance D. variancearrow_forwardThis variance is the difference involving spending less, or using less than the standard amount. A. favorable variance B. unfavorable variance C. no variance D. variancearrow_forward
- Anker Company had the data below for its most recent year, ended December 31: Required: Prepare a performance report that shows the variances on an item-by-item basis.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_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_forward
- Which method of closing out the fixed MOH volume variance will have no effect on the financial statements, no matter the capacity used? Question options: a) Prorating the fixed MOH volume variance to FG inventory and COGS. b) Allocating the fixed MOH volume variance equally among WIP Inventory, FG inventory and COGS. c) Prorating the fixed MOH volume variance to WIP Inventory, FG inventory and COGS. d) Allocating the fixed MOH volume variance to COGS.arrow_forwardShould both favorable and unfavorable variances be investigated, or only the unfavorable ones? Explain your response. What if a company found that they had a favorable price variance and an unfavorable quantity variance for direct materials. What might be the cause(s) of this pattern of variances?arrow_forwardResset Co. provides the following results of April’s operations: F indicates favorable and U indicates unfavorable. In applying management by exception, the company investigates all variances of $400 or more. Which variances will the company investigate? Direct materials price variance . $ 300 F Direct labor efficiency variance . $2,200 F Direct materials quantity variance . 3,000 U Controllable overhead variance . 400 U Direct labor rate variance . 100 U Fixed overhead volume variance . 500 Farrow_forward
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