Ferro Enterprises, Inc., uses a standard cost system in which it applies manufacturing overhead to units of product on the basis of standard direct labor-hours. During the month of September, the company applied P52,000 in fixed manufacturing overhead cost to units of product. At the end of the month, manufacturing overhead was overapplied by P3,000. If there was no volume variance in September, then the budgeted fixed manufacturing overhead cost for the month was:
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A: MPV = (Standard Price – Actual Price) x Actual Quantity
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A: The question is based on the concept of Cost Accounting.
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A: Solution 1: Fixed overhead spending variance = Budgeted fixed overhead - Actual fixed overhead =…
Q: The following information relates to Finishing department of Tom company for the fourth quarter:…
A: SOLUTION- EXPLANATION- SPENDING VARIANCE = ACTUAL FACTORY OVERHEAD - FLEXIBLE BUDGETED FACTORY…
Q: Unit VIII question 7
A: The variance is the difference between the standard production dat and actual production costs…
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A: Solution.... (A). Labor efficiency variance = (Standard hours - actual hours ) * standard rate…
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A: Variance analysis is performed to find the deviations by comparing actual performance done with the…
Q: Kilo Company uses a standard costing system that allows 2.0 pounds of direct materials for one…
A: Answer = $10,000 unfavorable
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A: 1. Fixed overhead spending variance = Budgeted Fixed overhead - Actual Fixed overhead =…
Q: The data below relate to the month of November for Badong, Inc. which uses a standard cost system:…
A: Labor rate variance = (standard rate - actual rate) * actual hours -1400 = (standard rate -…
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A: Fixed Overhead:-These are those cost which does not change for a long period of time even if volume…
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A: The difference between the actual amount of an expense and the expected (or budgeted) amount of an…
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A: Cost formula per machine-hour for indirect materials cost = Indirect material cost in flexible…
Q: Peters operated at 80% of capacity during the year but applied factory overhead based on the 90%…
A: Overhead amount of cost is the cost which is incurred by the company in order to make the product…
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A: Formula: Total budgeted fixed factory overhead = Total applied factory overhead - Total Variable…
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A: Introduction: Fixed overhead is a collection of costs that do not change as a result of changes in…
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A: The activity variance for manufacturing overhead in March would be closest to $5,600 F
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Q: The data below relate to the month of November for Badong, Inc. which uses a standard cost system:…
A: Controllable variance = Budgeted overhead (BO)- Actual overhead(AO)
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A: Answer Variable overhead rate variance =Actual hours worked×(Standard overhead rate-Actual overhead…
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A: Total Overhead Variance can be calculated by using the formula below: Total Overhead Variance =…
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A: Material quantity variance is the variance between the standard material estimated and the actual…
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A: Definition:
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A: Standard data is calculated by considering budgeted data and using actual data. Variance…
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A: overhead volume variance = Standard hours - normal hours) × fixed overhead rate
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A: (3600 hours /6000 units )*5500 units = 3300 Direct labour hours Budgeted Fixed overhead is $60,000…
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A: The variance is the difference between standard data of production and actual costs incurred for…
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A: Budgeted Cost = Actual Cost - Unfavorable Variance = $9,800 - $200 = $9,600
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A: Total overhead = Variable overhead + Fixed overheads
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A: Formula Flexible budget variance = ( Variable budget overhead - variable actual overhead ) +…
Q: The following information summarizes the standard cost for producing one metal tennis racket frame…
A: The question is based on the concept of Cost Accounting. When compared to the industry or setting…
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A: Overhead represents the indirect cost involved in the production process of the company.
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A: Predetermined overhead rate = Budgeted overhead / Budgeted volume of direct labor hours = P300,000 /…
Q: The data below relate to the month of November for Badong, Inc. which uses a standard cost system:…
A: Labor rate variance = (standard rate - actual rate) * actual hours -1400 = (standard rate -…
Q: The following information relates to the Finishing department of Tom company for the fourth quarter:…
A:
Q: Nolan Mills uses a standard cost system. During May, Nolan manufactured 15,000 pillowcases, using…
A: Material Price Variance = ( Standard Price - Actual Price ) x Actual Quantity Material Quantity…
Q: Cholla Company’s standard fixed overhead rate is based on budgeted fixed manufacturing overhead of…
A: Variance analysis shows the analysis of the difference between actual and budgeted overheads in the…
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A: Net overhead variance shall comprise of both fixed overhead and variable overhead variance.
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A: 1a. Material quantity variance = $2250 U(SQ - AQ) x SP = -$2250(2350 x 3 - AQ) x $5 = -$2250Actual…
Q: The Claus Company uses standard costing for the single product the company makes and sells. The…
A: Solution: Labor efficiency variance = P1,600 F (SH - AH) * SR = P1,600 (SH - 3800) * P8 = P1,600…
Q: During June, Fraser Company's material purchases amounted to 5,100 pounds at a price of $8.25 per…
A: Variances are the differences between the standard and actual costs of direct material, direct labor…
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P49,000
P52,000
P55,000
P58,000
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- Flaherty, Inc., has just completed its first year of operations. The unit costs on a normal costing basis are as follows: During the year, the company had the following activity: Actual fixed overhead was 12,000 less than budgeted fixed overhead. Budgeted variable overhead was 5,000 less than the actual variable overhead. The company used an expected actual activity level of 12,000 direct labor hours to compute the predetermined overhead rates. Any overhead variances are closed to Cost of Goods Sold. Required: 1. Compute the unit cost using (a) absorption costing and (b) variable costing. 2. Prepare an absorption-costing income statement. 3. Prepare a variable-costing income statement. 4. Reconcile the difference between the two income statements.At the beginning of the year, Lopez Company had the following standard cost sheet for one of its chemical products: Lopez computes its overhead rates using practical volume, which is 80,000 units. The actual results for the year are as follows: (a) Units produced: 79,600; (b) Direct labor: 158,900 hours at 18.10; (c) FOH: 831,000; and (d) VOH: 112,400. Required: 1. Compute the variable overhead spending and efficiency variances. 2. Compute the fixed overhead spending and volume variances.Yohan Company has the following balances in its direct materials and direct labor variance accounts at year-end: Unadjusted Cost of Goods Sold equals 1,500,000, unadjusted Work in Process equals 236,000, and unadjusted Finished Goods equals 180,000. Required: 1. Assume that the ending balances in the variance accounts are immaterial and prepare the journal entries to close them to Cost of Goods Sold. What is the adjusted balance in Cost of Goods Sold after closing out the variances? 2. What if any ending balance in a variance account that exceeds 10,000 is considered material? Close the immaterial variance accounts to Cost of Goods Sold and prorate the material variances among Cost of Goods Sold, Work in Process, and Finished Goods on the basis of prime costs in these accounts. The prime cost in Cost of Goods Sold is 1,050,000, the prime cost in Work in Process is 165,200, and the prime cost in Finished Goods is 126,000. What are the adjusted balances in Work in Process, Finished Goods, and Cost of Goods Sold after closing out all variances? (Round ratios to four significant digits. Round journal entries to the nearest dollar.)
- Potter Company has installed a JIT purchasing and manufacturing system and is using back-flush accounting for its cost flows. It currently uses a two-trigger approach with the purchase of materials as the first trigger point and the completion of goods as the second trigger point. During the month of June, Potter had the following transactions: 40,500 labor plus 222,750 overhead. There were no beginning or ending inventories. All goods produced were sold with a 60 percent markup. Any variance is closed to Cost of Goods Sold. (Variances are recognized monthly.) Required: Prepare the journal entries for the month of June using backflush costing, assuming that Potter uses the sale of goods as the second trigger point instead of the completion of goods.Case made 24,500 units during June, using 32,000 direct labor hours. They expected to use 31,450 hours per the standard cost card. Their employees were paid $15.75 per hour for the month of June. The standard cost card uses $15.50 as the standard hourly rate. A. Compute the direct labor rate and time variances for the month of June, and also calculate the total direct labor variance. B. If the standard rate per hour was $16.00, what would change?Smith Industries uses a cost system that carries direct materials inventory at a standard cost. The controller has established these standards for the cost of one basket (unit): Smith Industries made 3,000 baskets in July and used 15,500 pounds of material to make these units. Smith Industries paid $39,370 for the 15,500 pounds of material. A. What was the direct materials price variance for July? B. What was the direct materials quantity variance for July? C. What is the total direct materials cost variance? D. If Smith Industries used 15,750 pounds to make the baskets, what would be the direct materials quantity variance?
- Marymount Company makes one product. In the month of April, it made 3,500 units. Workers were paid $32 per hour for labor, for a total of $718,848. The standard hours per unit are 6.4, and the standard labor wage rate is $38.40 per hour. A. What are the actual hours worked? B. What are the standard hours for the units made? C. What is the direct labor rate variance for April? D. What Is the direct labor time variance for April? E. What is the total direct labor variance for April?If a factory operates at 100% of capacity one month, 90% of capacity the next month, and 105% of capacity the next month, will a different cost per unit be charged to the work-in-process account each month for factory overhead assuming that a predetermined annual overhead rate is used?Shinto Corp. uses a standard cost system and manufactures one product. The variable costs per product follow: Budgeted fixed overhead costs for the month are $4,000, and Shinto expected to manufacture 2,000 units. Actual production, however, was only 1,800 units. Materials prices were 10% over standard, and labor rates were 5% over standard. Of the factory overhead expense, only 80% was used, and fixed overhead was $100 over budget. The actual variable overhead cost was $4,800. In materials usage, 8% more parts were used than were allowed for actual production by the standard, and 6% more labor hours were used than were allowed. Required: Calculate the materials and labor variances. Calculate the variances for overhead by the four-variance method. (Hint: First compute the fixed and variable overhead rates per hour.)
- Queen Industries uses a standard costing system in the manufacturing of its single product. It requires 2 hours of labor to produce 1 unit of final product. In February, Queen Industries produced 12,000 units. The standard cost for labor allowed for the output was $90,000, and there was an unfavorable direct labor time variance of $5,520. A. What was the standard cost per hour? B. How many actual hours were worked? C. If the workers were paid $3.90 per hour, what was the direct labor rate variance?Moleno Company produces a single product and uses a standard cost system. The normal production volume is 120,000 units; each unit requires 5 direct labor hours at standard. Overhead is applied on the basis of direct labor hours. The budgeted overhead for the coming year is as follows: At normal volume. During the year, Moleno produced 118,600 units, worked 592,300 direct labor hours, and incurred actual fixed overhead costs of 2,150,400 and actual variable overhead costs of 1,422,800. Required: 1. Calculate the standard fixed overhead rate and the standard variable overhead rate. 2. Compute the applied fixed overhead and the applied variable overhead. What is the total fixed overhead variance? Total variable overhead variance? 3. CONCEPTUAL CONNECTION Break down the total fixed overhead variance into a spending variance and a volume variance. Discuss the significance of each. 4. CONCEPTUAL CONNECTION Compute the variable overhead spending and efficiency variances. Discuss the significance of each.Business Specialty, Inc., manufactures two staplers: small and regular. The standard quantities of direct labor and direct materials per unit for the year are as follows: The standard price paid per pound of direct materials is 1.60. The standard rate for labor is 8.00. Overhead is applied on the basis of direct labor hours. A plantwide rate is used. Budgeted overhead for the year is as follows: The company expects to work 12,000 direct labor hours during the year; standard overhead rates are computed using this activity level. For every small stapler produced, the company produces two regular staplers. Actual operating data for the year are as follows: a. Units produced: small staplers, 35,000; regular staplers, 70,000. b. Direct materials purchased and used: 56,000 pounds at 1.5513,000 for the small stapler and 43,000 for the regular stapler. There were no beginning or ending direct materials inventories. c. Direct labor: 14,800 hours3,600 hours for the small stapler and 11,200 hours for the regular stapler. Total cost of direct labor: 114,700. d. Variable overhead: 607,500. e. Fixed overhead: 350,000. Required: 1. Prepare a standard cost sheet showing the unit cost for each product. 2. Compute the direct materials price and usage variances for each product. Prepare journal entries to record direct materials activity. 3. Compute the direct labor rate and efficiency variances for each product. Prepare journal entries to record direct labor activity. 4. Compute the variances for fixed and variable overhead. Prepare journal entries to record overhead activity. All variances are closed to Cost of Goods Sold. 5. Assume that you know only the total direct materials used for both products and the total direct labor hours used for both products. Can you compute the total direct materials and direct labor usage variances? Explain.