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Bundle: Cornerstones of Cost Management, Loose-Leaf Version, 4th + CengageNOWv2, 1 term Printed Access Card
4th Edition
ISBN: 9781337539098
Author: Hansen
Publisher: CENGAGE L
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Textbook Question
Chapter 9, Problem 24E
Which of the following is true concerning labor variances that are not material in amount?
- a. They are closed to Cost of Goods Sold.
- b. They are prorated among Work in Process, Finished Goods, and Cost of Goods Sold.
- c. They are prorated among Materials, Work in Process, Finished Goods, and Cost of Goods Sold.
- d. They are reported as part of Overall Variance on the balance sheet at the end of the year.
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28.
If at the end of the fiscal year, the variances from standard are significant, the variances should be transferred to the
a.finished goods account
b.work in process account
c.cost of goods sold account
d.work in process, cost of goods sold, and finished goods accounts
Which of the following is true of direct labor variances? a. The labor efficiency variance measures the difference between what was paid to direct laborers and what should have been paid. b. The labor rate variance measures the difference between the labor hours that were actually used and the labor hours that should have been used. c. The labor rate variance measures the difference between the labor hours that were originally budgeted and the labor hours that should have been used. d. The labor rate and labor efficiency variances will always add up to the total labor variance. e. The labor rate variance measures the difference between the labor hours that were actually used and the labor hours that were originally budgeted.
Why should a production-volume variance (PVV) that is material be prorated among work-in-process, finished goods, cost and cost of goods sold rather than writing it all off to cost of goods sold?
a.
If a PVV is always written off to cost of goods sold, then the assets on the balance sheet would be the same as actual costs.
b.
If a PVV is always written off to cost of goods sold, then the liabilities on the balance sheet would be overstated.
c.
If a PVV is always written off to cost of goods sold, then the balances in the inventory accounts on the balance sheet would be most accurate.
d.
If a PVV is always written off to cost of goods sold, a company could set its standard costs to either increase or decrease operating incomes.
Chapter 9 Solutions
Bundle: Cornerstones of Cost Management, Loose-Leaf Version, 4th + CengageNOWv2, 1 term Printed Access Card
Ch. 9 - Discuss the difference between budgets and...Ch. 9 - What is the quantity decision? The pricing...Ch. 9 - Why is historical experience often a poor basis...Ch. 9 - Prob. 4DQCh. 9 - How does standard costing improve the control...Ch. 9 - The budget variance for variable production costs...Ch. 9 - Explain why the direct materials price variance is...Ch. 9 - The direct materials usage variance is always the...Ch. 9 - The direct labor rate variance is never...Ch. 9 - Prob. 10DQ
Ch. 9 - Prob. 11DQCh. 9 - What is the cause of an unfavorable volume...Ch. 9 - Prob. 13DQCh. 9 - Explain how the two-, three-, and four-variance...Ch. 9 - Prob. 15DQCh. 9 - Prob. 1CECh. 9 - Direct Materials Usage Variance Refer to...Ch. 9 - Refer to Cornerstone Exercise 9.1. Guillermos Oil...Ch. 9 - Kavallia Company set a standard cost for one item...Ch. 9 - Yohan Company has the following balances in its...Ch. 9 - Standish Company manufactures consumer products...Ch. 9 - Variances Refer to Cornerstone Exercise 9.6....Ch. 9 - Standish Company manufactures consumer products...Ch. 9 - Mangia Pizza Company makes frozen pizzas that are...Ch. 9 - Mangia Pizza Company makes frozen pizzas that are...Ch. 9 - Refer to Cornerstone Exercise 9.9. Required: 1....Ch. 9 - Quincy Farms is a producer of items made from farm...Ch. 9 - During the year, Dorner Company produced 280,000...Ch. 9 - Zoller Company produces a dark chocolate candy...Ch. 9 - Oerstman, Inc., uses a standard costing system and...Ch. 9 - Refer to the data in Exercise 9.15. Required: 1....Ch. 9 - Chypre, Inc., produces a cologne mist using a...Ch. 9 - Refer to Exercise 9.17. Chypre, Inc., purchased...Ch. 9 - Delano Company uses two types of direct labor for...Ch. 9 - Jameson Company produces paper towels. The company...Ch. 9 - Madison Company uses the following rule to...Ch. 9 - Laughlin, Inc., uses a standard costing system....Ch. 9 - Responsibility for the materials price variance...Ch. 9 - Which of the following is true concerning labor...Ch. 9 - A company uses a standard costing system. At the...Ch. 9 - Relevant information for direct labor is as...Ch. 9 - Which of the following is the most likely...Ch. 9 - Haversham Corporation produces dress shirts. The...Ch. 9 - Plimpton Company produces countertop ovens....Ch. 9 - Algers Company produces dry fertilizer. At the...Ch. 9 - Misterio Company uses a standard costing system....Ch. 9 - Petrillo Company produces engine parts for large...Ch. 9 - Business Specialty, Inc., manufactures two...Ch. 9 - Vet-Pro, Inc., produces a veterinary grade...Ch. 9 - Refer to the data in Problem 9.34. Vet-Pro, Inc.,...Ch. 9 - Energy Products Company produces a gasoline...Ch. 9 - Nuevo Company produces a single product. Nuevo...Ch. 9 - Ingles Company manufactures external hard drives....Ch. 9 - As part of its cost control program, Tracer...Ch. 9 - Aspen Medical Laboratory performs comprehensive...Ch. 9 - Leather Works is a family-owned maker of leather...
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- (Appendix 10A) Which of the following is true concerning labor variances that are not material in amount? a. They are closed to Cost of Goods Sold. b. They are prorated among Work in Process, Finished Goods, and Cost of Goods Sold. c. They are prorated among Materials, Work in Process, Finished Goods, and Cost of Goods Sold. d. They are reported on the balance sheet at the end of the year. e. All of these.arrow_forwardIf variances are recorded in the accounts at the time the manufacturing costs are incurred, what does a debit balance in Direct Materials Price Variance represent?arrow_forwardBreakaway Companys labor information for May is as follows: A. What is the actual direct labor rate per hour? B. What is the standard direct labor rate per hour? C. What was the total standard direct labor cost for May? D. What was the direct labor rate variance for May?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_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_forwardIf variances are recorded in the accounts at the time the manufacturing costs are incurred, what does a debit balance in Direct Materials Price Variance represent?arrow_forward
- If variances are recorded in the accounts at the time the manufacturing costs are incurred, what does a debit balance in Direct Materials Price Variance represent?arrow_forwardComputing labor variances Fill in the missing figures for each of the following independent cases: (Round all rates to the nearest cent and all totals to the nearest dollar.)arrow_forwardA. What are the two variances between the actual cost and the standard cost for direct labor? B. Who generally has control over the direct labor cost variances?arrow_forward
- For the month of April, compute the variances, indicating whether it is favorable (F) or unfavorable (U): Q. Direct manufacturing labor price variance ?arrow_forwardFortes Incorporated has provided the following data concerning one of the products in its standard cost system. Variable manufacturing overhead is applied to products on the basis of direct labor-hours. Standard Quantity or Hours per Unit of Output 8.5 ounces 0.6 hours 0.6 hours. Inputs Direct materials Direct labor Variable manufacturing overhead The company has reported the following actual results for the product for April: 6,100 units 55,050 ounces Actual output Raw materials purchased Actual cost of raw materials purchased Raw materials used in production Actual direct labor-hours Actual direct labor cost Actual variable overhead cost $ 303,010 51,860 ounces 3,360 hours Standard Price or Rate $6.60 per ounce $24.80 per hour $ 4.90 per hour $ 86,810 $ 15,717 Required: a. Compute the materials price variance for April. b. Compute the materials quantity variance for April. c. Compute the labor rate variance for April. d. Compute the labor efficiency variance for April. e. Compute the…arrow_forwardFor the month of April, compute the variances, indicating whether it is favorable (F) or unfavorable (U): Q. Direct manufacturing labor efficiency variance ?arrow_forward
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What is variance analysis?; Author: Corporate finance institute;https://www.youtube.com/watch?v=SMTa1lZu7Qw;License: Standard YouTube License, CC-BY