By year-end, Oriole Corp. had recognized standard cost variances for all of its production costs, including DM, DL, variable-MOH, and fixed-MOH. The following variances exist per the trial balances; the balance of COGS at this time is $130,390. DM price variance DM efficiency variance DL price variance DL efficiency variance $5,920 Credit 4,080 Debit 1,830 Debit 2,420 Credit Variable-MOH price variance Variable-MOH efficiency variance Fixed-MOH price variance Fixed-MOH volume variance $3,860 Debit 240 Debit 1,860 Debit 870 Credit

By year-end, Oriole Corp. had recognized standard cost variances for all of its production costs, including DM, DL, variable-MOH, and fixed-MOH. The following variances exist per the trial balances; the balance of COGS at this time is $130,390. DM price variance DM efficiency variance DL price variance DL efficiency variance $5,920 Credit 4,080 Debit 1,830 Debit 2,420 Credit Variable-MOH price variance Variable-MOH efficiency variance Fixed-MOH price variance Fixed-MOH volume variance $3,860 Debit 240 Debit 1,860 Debit 870 Credit

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter9: Evaluating Variances From Standard Costs

Section: Chapter Questions

Problem 2CMA: Marten Company has a cost-benefit policy to investigate any variance that is greater than 1,000 or...

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Recompute 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?
Kavallia Company set a standard cost for one item at 328,000; allowable deviation is 14,500. Actual costs for the past six months are as follows: Required: 1. Calculate the variance from standard for each month. Which months should be investigated? 2. What if the company uses a two-part rule for investigating variances? The allowable deviation is the lesser of 4 percent of the standard amount or 14,500. Now which months should be investigated?
Using variance analysis and interpretation Last year, Endicott Corp. adopted a standard cost system. Labor standards were set on the basis of time studies and prevailing wage rates. Materials standards were determined from materials specifications and the prices then in effect. On June 30, the end of the current fiscal year, a partial trial balance revealed the following: Standards set at the beginning of the year have remained unchanged. All inventories are priced at standard cost. What conclusions can be drawn from each of the four variances shown in Endicotts trial balance?
Using variance analysis and interpretation Last year, Wrigley Corp. adopted a standard cost system. Labor standards were set on the basis of time studies and prevailing wage rates. Materials standards were determined from materials specifications and the prices then in effect. On June 30, the end of the current fiscal year, a partial trial balance revealed the following: Standards set at the beginning of the year have remained unchanged. All inventories are priced at standard cost. What conclusions can be drawn from each of the four variances shown in Wrigleys trial balance?
Marten 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.
At the end of the current fiscal year, the trial balance of Big Apple Inc. revealed the following debit (unfavorable) balances: Flexible-Budget Variance — $2,000 Production–Volume Variance — $75,000 What conclusions can be drawn from these two variances?
In all of the exercises involving variances, use F and U to designate favorable and unfavorable variances, respectively. E8-1 through E8-5 use the following data: The standard operating capacity of Tecate Manufacturing Co. is 1,000 units. A detailed study of the manufacturing data relating to the standard production cost of one product revealed the following: 1. Two pounds of materials are needed to produce one unit. 2. Standard unit cost of materials is 8 per pound. 3. It takes one hour of labor to produce one unit. 4. Standard labor rate is 10 per hour. 5. Standard overhead (all variable) for this volume is 4,000. Each case in E8-1 through E8-5 requires the following: a. Set up a standard cost summary showing the standard unit cost. b. Analyze the variances for materials and labor. c. Make journal entries to record the transfer to Work in Process of: 1. Materials costs 2. Labor costs 3. Overhead costs (When making these entries, include the variances.) d. Prepare the journal entry to record the transfer of costs to the finished goods account. Standard unit cost; variance analysis; journal entries 1,000 units were started and finished. Case 1: All prices and quantities for the cost elements are standard, except for materials cost, which is 8.50 per pound. Case 2: All prices and quantities for the cost elements are standard, except that 1,900 lb of materials were used.
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.
Susan Corporation started the year expecting to produce and sell 117,000 units of its super-insulating coffee mugs, but it ended the year having produced and sold even more than that-129,000 units. Needless to say, owners Eli and his sister Anna were thrilled to have exceeded sales goals for the year. By the end of the third quarter, results looked promising. They were even more excited to see the final year-end financial statements and share the great news with their crew. The actual results, along with the original master budget for the year, are as follows. Sales Variable costs: DM DL Variable-MOH Variable SG&A Contribution margin Fixed costs: Fixed-MOH Fixed SG&A Operating income Actual Income $2,560,650 389,064 621.264 268,320 122,550 1,159,452 442,728 436,500 $280,224 Flexible Budget Master Budget $2,357,550 351,000 561,600 210,600 111,150 1,123,200 421,200 409,000 $293,000 In addition to seeing total actual results, the owners would like a more thorough analysis of many of these…
Lido Company's standard and actual costs per unit for the most recent period, during which 400 units were actually produced, are given below: Required: From the foregoing information, compute the following variances. Show whether the variance is favorable (F) or unfavorable (U): a.Materials price variance b.Materials quantity variance c.Direct labor rate variance d.Direct labor efficiency variance e.Variable overhead rate variance f.Variable overhead efficiency variance Please show me the steps of calculating.
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The following data relate to labor cost for production of 3,300 cellular telephones: Actual: 2,210 hrs. at $14.20Standard: 2,180 hrs. at $14.40 a. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Line Item Description Amount Variance Rate variance $fill in the blank 1 Time variance $fill in the blank 3 Total direct labor cost variance $fill in the blank 5