Variance Analysis
Q: Why do we need to have a "base" for the computation of different types of variances under gross…
A: Gross Profit: It is calculated by subtracting operating expenses from the operating income for the…
Q: Determine the following: Price-Quantity variance Cost variance Cost-Quantity variance
A: A) Price quantity variance = ( Units sold in 2021-units sold in 2020)/ Rate per unit of 2020…
Q: for Julu that includor reveDue and spending variances and activity variances. (Indicate
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Q: Direct Materials and Direct Labor Variance Analysis
A: a. Determine standard cost per unit Direct material standard cost per unit = Std. number of lbs of…
Q: Explain the meaning of the joint price-quantity variance.
A: Joint price-quantity variance: Variances are the difference between the actual results and the…
Q: What is the interpretation of the direct-material quantity variance?
A: Direct material quantity variance is a variance analysis tool for manufacturing companies. It shows…
Q: b) Why are separate price and quantity variances computed?
A: Variances is a word used for finding out the difference between the actual and standard levels set…
Q: TOTAL DM Variance,
A: Standard costing is used to determine the estimated expenses for the production process. In this…
Q: concepts underlying variance analysis
A: Variance analysis is a part of standard costing under cost accounting.
Q: volume
A: The material total variance is the sum of material price variance and material quantity variance.…
Q: significant of variance analysis in cost management.
A: Variance analysis is a tool in cost management to compare and analyze variations in budgeted costs…
Q: Give the general formulas for determining cost and efficiency variances.
A: Cost variance: Cost variance shows the difference of standard cost and actual costs. Efficiency…
Q: Q.How does variance analysis help in continuous improvement?
A: Variance Analysis: Variance analysis is the process of ascertaining the deviations between actual…
Q: What is overhead variance?
A: The variance is the difference between the actual figures with comparison to the budgeted figures.…
Q: Describe five factors that managers often consider when determining the significance of a variance.
A: Definition: Variance: Variance refers to the different levels in the actual cost incurred and…
Q: Explain what is meant by the term management by exception. What is the relationship between the…
A: Management by exception: Under this style of management, employees are allowed to take decisions…
Q: how to compute quantity/efficiency variance
A: Cost accounting is beneficial since it can demonstrate where a corporation spends money, earns…
Q: How are budget variances calculated and used as performance measures? Provide numerical example?
A: budget is the predefined calculations that provide the plan of using the resources and generating…
Q: In two or three paragraphs explain the purpose of variance analysis and its benefits and drawbacks.
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Q: The incom
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Q: What is an activity variance and what does it mean?
A: Variance: Variance refers to the difference level in the actual cost incurred and standard cost. The…
Q: Define direct material variance.
A: Variance: Variance refers to the difference level in the actual cost incurred and standard cost.…
Q: Explain and describe the overhead variance.
A: Variance means when the actual cost does not match with the estimated costs. To compute the…
Q: ne following:
A: The variances are given as,
Q: Which method is used to see if a relationship between the cost driver and total cost exists?…
A: Cost drivers means activity units that will cause change in total cost for example, number of…
Q: Prepare variance analysis for materials, labor and overhead
A: Variance analysis can be defined as investigation tool which studies the deviation between the…
Q: Find material price variance
A: Cost Accounting: It is the process of collecting, recording, analyzing the cost, summarizing cost,…
Q: Q.When inputs are substitutable, how can the direct materials efficiency variance be decomposed…
A:
Q: Required: the variance analysis for labor.
A: 1. Direct labor Variance = (standard rate x Standard hrs for actual output) - (Actual rate x Actual…
Q: Variance analysis SIS
A: Under variance analysis a standard is set for all costs, revenues etc. and this is compared with the…
Q: Explain an example how to calculate cost variance.
A: Cost variance is the difference of standard cost and actual cost in manufacturing of a product. Cost…
Q: What is the relationship between management by exception and variance analysis?
A: Management by Exception: Management by exception is the process of finding the deviations in the…
Q: What should be the organizational purpose for identifying and calculating variances?
A: Management accounting: It is the process of preparing the reports of a business operations helping…
Q: (b) Explain the reasons why Carad Co would be interested in the material price planning variance and…
A: The variations between predicted and actual results of a manufacturing process or other commercial…
Q: How do you find the standard quantity for efficiency variance?
A: Management should pay particular attention to those that are uncommon or noteworthy. Firms may…
Q: Compute overhead variances using a three-variance approach.
A: 1. Budgeted variance 2. Volume variance 3. Overhead variance
Q: naterials yield variance.
A: We have to convert standard data to Actual Data Material A 1500 Material B. 625 Material C. 1000…
Q: How does variance analysis help in continuous improvement?
A: Variance Analysis: Variance analysis is the process of ascertaining the deviations between actual…
Q: Define unfavourable variance.
A: Variance: Variance refers to the difference level in the actual cost incurred and standard cost. The…
Q: unfavorable variances result from
A: Unfavorable variance:-It is a result of lower sales, higher expenses, or combination when actual…
Q: is direct material variance a measure of?
A: Direct material variance is the difference between standard material costs and actual material costs…
Q: a. Break down the material cost variance into different related variances: price variance, usage…
A: Variance analysis: It is the technique in budgeting that allows for analysis of the variances…
Q: What types of variances are found on cost center reports? Explain what each variance is measuring…
A: The variances found in the cost center report are determined by measuring actual performance against…
Q: Define direct labour variances.
A: Definition: Variance Analysis: Variance analysis is the process of evaluating the differences…
Q: Explain how to calculate static budget variance.
A: Static budget: Static budget is a master budget that is prepared for only one level of sales…
Q: in preparing variance analysis for both variable overhead and fixed overhead costs, both include…
A: The answer for the theory question on Spending variances is discussed hereunder :
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- Steeler Towel Company estimates its overhead to be $250,000. It expects to have 100,000 direct labor hours costing $2,500,000 in labor and utilizing 12,500 machine hours. Calculate the predetermined overhead rate using: A. Direct labor hours B. Direct labor dollars C. Machine hoursCoops Stoops estimated its annual overhead to be $85,000 and based its predetermined overhead rate on 24,286 direct labor hours. At the end of the year, actual overhead was $90,000 and the total direct labor hours were 24,100. What is the entry to dispose of the over applied or under applied overhead?If a company bases its predetermined overhead rate on 100,000 machine hours, and It actually has 100,000 machine hours, would there be an under applied or over applied overhead?
- Green Bay Cheese Company estimates its overhead to be $375,000. It expects to have 125,000 direct labor hours costing $1,500,000 in labor and utilizing 15,000 machine hours. Calculate the predetermined overhead rate using: A. Direct labor hours B. Direct labor dollars C. Machine hoursThe following product costs are available for Kellee Company on the production of eyeglass frames: direct materials, $32,125; direct labor, $23.50; manufacturing overhead, applied at 225% of direct labor cost; selling expenses, $22,225; and administrative expenses, $31,125. The direct labor hours worked for the month are 3,200 hours. A. What are the prime costs? B. What are the conversion costs? C. What is the total product cost? D. What is the total period cost? E. If 6.425 equivalent units are produced, what is the equivalent material cost per unit? F. What is the equivalent conversion cost per unit?A company estimates its manufacturing overhead will be $750,000 for the next year. What is the predetermined overhead rate given the following independent allocation bases? Budgeted direct labor hours: 60,000 Budgeted direct labor expense: $1,500,000 Estimated machine hours: 100,000
- SmokeCity, Inc., manufactures barbeque smokers. Based on past experience, SmokeCity has found that its total annual overhead costs can be represented by the following formula: Overhead cost = 543,000 + 1.34X, where X equals number of smokers. Last year, SmokeCity produced 20,000 smokers. Actual overhead costs for the year were as expected. Required: 1. What is the driver for the overhead activity? 2. What is the total overhead cost incurred by SmokeCity last year? 3. What is the total fixed overhead cost incurred by SmokeCity last year? 4. What is the total variable overhead cost incurred by SmokeCity last year? 5. What is the overhead cost per unit produced? 6. What is the fixed overhead cost per unit? 7. What is the variable overhead cost per unit? 8. Recalculate Requirements 5, 6, and 7 for the following levels of production: (a) 19,500 units and (b) 21,600 units. (Round your answers to the nearest cent.) Explain this outcome.Wrappers Tape makes two products: Simple and Removable. It estimates it will produce 369,991 units of Simple and 146,100 of Removable, and the overhead for each of its cost pools is as follows: It has also estimated the activities for each cost driver as follows: Â How much is the overhead allocated to each unit of Simple and Removable?The actual overhead for a company is $73,175. Overhead was based on 4,500 machine hours and was $3,325 over applied for the year. What is the overhead application rate per direct labor hour? What is the journal entry to dispose of the under applied overhead?
- A Company establishes the following standards for the costs of one unit of its product. The standard production overhead costs per unit are bascd on direct-labor hours. Calculation for standard per unit cost is as follows: Std Cost Std Qty 3.00 kg | Direct Material Direct Labor Variable Overhead Fixed Overhead* |Total *based on practical capacity of 20,000 direct-labor hour per month Std Price/Rate $ 8.25 per kg $ 10.00 per hour $ 10.00 per hour $ 7.50 per hour 24.75 $ 20.00 2.00 hour $ 20.00 2.00 hour 15.00 2.00 hour 79.75 During December 2020, the Company purchased 30,000 kg of direct material at a total cost of $246,000. The total wages for December were $260,000, 75% of which were for direct labor. The Company manufactured 9,500 units of product during December 2020, using 28,400 kg of the direct material purchased in December and 18,900 direct-labor hours. Actual variable and fixed overhead cost were $200,000 and $150,000, respectively. The scheduled production for the month was…services XYZ industries applies overhead based on direct labor cost. The following information was available for the last year: Actual manufacturing overhead OMR50,000; Underapplied manufacturing overhead OMR10,400; Actual Prime cost OMR52,000; Actual Direct material cost OMR19,000; Estimated direct labor cost OMR41,000 overhead for the year? What was the estimated man turi Select one: O a. OMR49,200 O b.OMR39,600 O c. None of the answers given O d. OMR46,800 e OMRS1,600 ge Next pageRequired information Skip to question [The following information applies to the questions displayed below.] Antuan Company set the following standard costs per unit for its product. Direct materials (4.0 pounds @ $5.00 per pound) $ 20.00 Direct labor (1.8 hours @ $12.00 per hour) 21.60 Overhead (1.8 hours @ $18.50 per hour) 33.30 Standard cost per unit $ 74.90 The standard overhead rate ($18.50 per direct labor hour) is based on a predicted activity level of 75% of the factory’s capacity of 20,000 units per month. Following are the company’s budgeted overhead costs per month at the 75% capacity level. Overhead Budget (75% Capacity) Variable overhead costs Indirect materials $ 15,000 Indirect labor 75,000 Power 15,000 Maintenance 30,000 Total variable overhead costs 135,000 Fixed overhead costs Depreciation—Building 23,000 Depreciation—Machinery 71,000 Taxes and insurance 18,000 Supervisory salaries 252,500 Total fixed overhead costs 364,500…