1-a. Draw a statistical control chart and plot the variance data given above. 1-b. Which variances will be investigated?
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- 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, 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?Madison Company uses the following rule to determine whether direct labor efficiency variances ought to be investigated. A direct labor efficiency variance will be investigated anytime the amount exceeds the lesser of 12,000 or 10 percent of the standard labor cost. Reports for the past five weeks provided the following information: Required: 1. Using the rule provided, identify the cases that will be investigated. 2. Suppose that investigation reveals that the cause of an unfavorable direct labor efficiency variance is the use of lower quality direct materials than are usually used. Who is responsible? What corrective action would likely be taken? 3. Suppose that investigation reveals that the cause of a significant favorable direct labor efficiency variance is attributable to a new approach to manufacturing that takes less labor time but causes more direct materials waste. Upon examining the direct materials usage variance, it is discovered to be unfavorable, and it is larger than the favorable direct labor efficiency variance. Who is responsible? What action should be taken? How would your answer change if the unfavorable variance were smaller than the favorable?
- 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.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.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.
- 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.Required Information EX 10-28 (Algo) Cost Variance Investigation (LO 10-4) The director of cost management for Odessa Company uses a statistical control chart to help management determine when to investigate variances. The critical value is 1 standard deviation. The company incurred the following direct-labor efficiency variances during the first six months of the current year. January February March April May June The standard direct-labor cost during each of these months was $21,000. The controller has estimated that the firm's monthly direct-labor variances have a standard deviation of $970. EX 10-28 (Algo) Part 2: Which varlances will be investigated? $ 270 F 820 U 720 U 920 U 1,070 U 1,300 U Required: 2-a. Determine the cutoff value for investigation if the controller's rule of thumb is to investigate all variances equal to or greater than 6 percent of standard cost. 2-b. Based on the cutoff value, which month will have its direct-labor efficiency variance investigated? Complete…The director of cost management for Odessa Company uses a statistical control chart to help management determine when to investigate variances. The critical value is 1 standard deviation. The company incurred the following direct-labor efficiency variances during the first six months of the current year. January February March April May June $ 300 F 850 U 750 U 950 U 1,100 U 1,480 U The standard direct-labor cost during each of these months was $24,000. The controller has estimated that the firm's monthly direct- labor variances have a standard deviation of $1,000. Required: 2-a. Determine the cutoff value for investigation if the controller's rule of thumb is to investigate all variances equal to or greater than 6 percent of standard cost. 2-b. Based on the cutoff value, which month will have its direct-labor efficiency variance investigated? Complete this question by entering your answers in the tabs below. Req 2A Reg 2B Determine the cutoff value for investigation if the…
- DL variances; journal entriesCalista & Lane, CPAs, set the following standard for its inventory audit of Triumph Co.: 560 hours at an average hourly rate of $250. The firm actually worked 528 hours during the inventory audit process. The total labor variance for the audit was $5,600 unfavorable.a. Compute the total actual payroll. $Answerb. Compute the labor efficiency variance.Note: Do not use a negative sign with your answer.Labor efficiency variance $Answer AnswerFavorableUnfavorableNeither favorable or unfavorablec. Compute the labor rate variance.Note: Do not use a negative sign with your answer.Labor rate variance $Answer AnswerFavorableUnfavorableNeither favorable or unfavorabled. Prepare the entry to assign labor costs to inventory, record the labor variances, and accrue payroll costs.Note: Record any multiple debits or any multiple credits in alphabetical order by account name. Account Debit Credit AnswerAccounts PayableCost of Good SoldLabor Efficiency…Required information [The following information applies to the questions displayed below.] Alvarez Company for the current period shows a $22,000 favorable volume variance and a $59,000 unfavorable controllable variance. Standard overhead applied for the period is $233,000. (a) What is the actual total overhead cost incurred for the period? (b) What is the total overhead variance and is it favorable of unfavorable? a. Actual total overhead b. Total overhead varianceHaku Comprehensive Inc had the following variances for the most recent month: Materials Price Variance Material Usage Variance Direct labor Rate Variance Direct Labor Efficiency Variance P13,960 U P7,000 U P 1,440 F P11,540 F Other information included: actual wages paid P144,620; material purchased P261,520: standard per unit were 2 labor hours at P5 per hour, 3 pounds at P6 per pound. There were no changes in materials inventories. Required: a. Find the units produced b. Find the standard labor hours C. Find the actual labor hours d. Find the standard quantity. of materials allowed e. Find the actual quantity of materials used