Required Compute variances for the following items and indicate whether each variance is favorable or unfavorable: Note: Select "None" if there is no effect (i.e., zero variance). Item Sales price Sales revenue Budget Actual Variance $ 652 $ 526 $ 581,000 $ 602,000 Cost of goods sold $ 386,500 $ 361,000 Material purchases at 5,000 pounds $ 276,000 $ 281,500 Materials usage 181,500 pounds 179,000 pounds pounds Production volume 960 units 905 units units Wages at 4,000 hours $ 60,200 $ 58,800 Labor usage at $16 per hour $ 96,100 $ 97,200 Research and development expense $ 23,000 $ 26,500 Selling and administrative expenses $ 50,500 $ 41,000 Effect

Required Compute variances for the following items and indicate whether each variance is favorable or unfavorable: Note: Select "None" if there is no effect (i.e., zero variance). Item Sales price Sales revenue Budget Actual Variance $ 652 $ 526 $ 581,000 $ 602,000 Cost of goods sold $ 386,500 $ 361,000 Material purchases at 5,000 pounds $ 276,000 $ 281,500 Materials usage 181,500 pounds 179,000 pounds pounds Production volume 960 units 905 units units Wages at 4,000 hours $ 60,200 $ 58,800 Labor usage at $16 per hour $ 96,100 $ 97,200 Research and development expense $ 23,000 $ 26,500 Selling and administrative expenses $ 50,500 $ 41,000 Effect

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter23: Evaluating Variances From Standard Costs

Section: Chapter Questions

Problem 23E: Dickinsen Company gathered the following data for December: a.Compute the revenue price variance....

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(Appendix 10A) Which of the following items describes practices surrounding the recording of variances? a. All inventories are typically carried at standard. b. Unfavorable variances appear as debits. c. Favorable variances appear as credits. d. Immaterial variances are typically closed to Cost of Goods Sold. e. All of these.
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?
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.
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?
Rosenberry Company computed the following revenue variances for January: Revenue price variance (350,000) Favorable Revenue volume variance50,000 Unfavorable Assuming that the planned selling price per unit was 10 and that actual sales were 175,000 units, determine the following: a. Actual selling price of January. b. Planned number of units that were to be sold in January.
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?
A firm comparing the actual variable costs of producing 10,000 units with the total variable costs of a static budget based on 9,000 units would probably see a. no variances. b. small favorable variances. c. large unfavorable variances. d. large favorable variances. e. small unfavorable variances.
(Appendix) Calculating factory overhead: three variances Using the data given in E8-17, calculate the following overhead variances: a. Spending variance. b. Production-volume variance. c. Efficiency variance. d. Was the factory overhead under- or overapplied? By what amount? In all problems involving variances, use F and U to indicate favorable and unfavorable variances, respectively.
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?
Direct materials variances Bellingham Company produces a product that requires 2.5 standard pounds per unit. The standard price is 3.75 per pound. If 15,000 units used 36,000 pounds, which were purchased at 4.00 per pound, what is the direct materials (A) price variance, (B) quantity variance, and (C) cost variance?
Computing 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.)
Sulert, Inc., produces and sells gel-filled ice packs. Sulerts performance report for April follows: Required: 1. Calculate the contribution margin variance and the contribution margin volume variance. 2. Calculate the market share variance and the market size variance. (CMA adapted)