It was the end of the third quarter for Marigold Industries. There had been some discussion in prior quarters about best practicesrelated to carrying ending inventory of its key DM, acetic acid, for making vinegar. Per established standards, 7.1 ounces of acetic acidat a budgeted price of $0.30 per ounce were needed for each gallon of vinegar (128 ounces). The new production manager wants tofollow lean practices and buy only what is needed for production, while the former production manager preferred to keep someinventory on hand for emergencies. For the third quarter, 316,800 ounces of acetic acid were purchased on account and used to make44,000 gallons of vinegar. The purchase price was $88,704.(a1)Your answer is correct.Determine the DM price and efficiency variances for the third quarter based on the information above.DM price varianceDM efficiency variance $eTextbook and MediaList of Accounts6336Attempts: 1 of 3 used Record the journal entries for the purchase and use of DM under standard costing. (Credit account titles are automatically indentedwhen amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for theamounts. List all debit entries before credit entries)Account Titles and ExplanationDM InventoryDM Price VarianceAccounts Payable(To record purchase of DM)WIP InventoryDM Efficiency VarlanceDM Inventory(To record use of DM)eTextbook and MediaList of AccountsDM Inventory balance $Debit95040]]]per bunde93720Credit63368870495040Assistance UsedContinuing with the detalls in part (a), assume there was a zero balance in the DM Inventory account to start the third quarter.What would the DM Inventory balance be at the end of the quarter? How much did Marigold Industries pay per ounce for theBestic acid? (Round amount per ounce to 2 decimal places, eg. 15.25.)Attempts: 1 of 3 used

Direct material price variance is a variance between the rate at which material should be purchased against the rate at which it is purchased. Direct material price variance = (Standard rate per unit - Actual rate per unit) x Actual quantity purchased Direct material efficiency variance is a variance between the quantity that should be used for production against the actual quantity used. Direct material efficiency variance = (Standard quantity for production - Actual quantity used) * Standard rate per unit Material price variance = ($0.3 - ($88,704/316,800)) x 316,800 = ($0.3 - $0.28) x 316,800 = $6,336 (Favorable) Material efficiency variance = ((7.1 x 44,000) - 316,800) x $0.3 = $1,320 (Unfavorable)Journal entries : Sl no Account title Debit ($) Credit ($) 1 Direct Materials (316,800×$0.30) Dr 95,040 To Direct Material Price Variance 6,336 To Accounts Payable (actual cost of purchase) 88,704 (To record purchase of Direct material) 2 Work in process (7.1×44,000×$0.30) Dr 93,720 Material Quantity Variance 1,320 To Direct material 95,040 (To record use of Direct material)

Business

Accounting

It was the end of the third quarter for Marigold Industries. There had been some discussion in prior quarters about best practices related to carrying ending inventory of its key DM, acetic acid, for making vinegar. Per established standards, 7.1 ounces of acetic acid at a budgeted price of $0.30 per ounce were needed for each gallon of vinegar (128 ounces). The new production manager wants to follow lean practices and buy only what is needed for production, while the former production manager preferred to keep some inventory on hand for emergencies. For the third quarter, 316,800 ounces of acetic acid were purchased on account and used to make 44,000 gallons of vinegar. The purchase price was $88,704. (a1) Your answer is correct. Determine the DM price and efficiency variances for the third quarter based on the information above. DM price variance DM efficiency variance 6336 1320 Favorable Unfavorable

It was the end of the third quarter for Marigold Industries. There had been some discussion in prior quarters about best practices related to carrying ending inventory of its key DM, acetic acid, for making vinegar. Per established standards, 7.1 ounces of acetic acid at a budgeted price of $0.30 per ounce were needed for each gallon of vinegar (128 ounces). The new production manager wants to follow lean practices and buy only what is needed for production, while the former production manager preferred to keep some inventory on hand for emergencies. For the third quarter, 316,800 ounces of acetic acid were purchased on account and used to make 44,000 gallons of vinegar. The purchase price was $88,704. (a1) Your answer is correct. Determine the DM price and efficiency variances for the third quarter based on the information above. DM price variance DM efficiency variance 6336 1320 Favorable Unfavorable

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Burke's Corner currently sells blue jeans and T-shirts. Management is considering adding fleece tops to its inventory to provide a cooler weather option. The tops would sell for $47 each with expected sales of 3,500 tops annually. By adding the fleece tops, management feels the firm will sell an additional 205 pairs of jeans at $57 a pair and 340 fewer T-shirts at $18 each. The variable cost per unit is $25 on the jeans, $9 on the T-shirts, and $21 on the fleece tops. With the new item, the depreciation expense is $27,000 a year and the fixed costs are $62,000 annually. The tax rate is 21 percent. What is the project's operating cash flow? Multiple Choice $25,815 $12,495 $36,180 $20,980 $31,345
Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
6. Person X has managed a downtown store in a major metropolitan city for several years. The firm has ten stores in varying locations. In the past, senior management noticed Person X's work and he has received very good annual evaluations for his management of the store. \\nThis year his store has generated steady growth in sales, but earnings have been deteriorating. After examining the monthly performance report generated by the company budgeting department, he noticed that increasing fixed costs is causing the decrease in earnings. \\nAdministrative corporate costs, primarily fixed costs, are allocated to individual stores each month based on actual sales for that month. Two of these stores are currently growing at a rapid pace, while four other stores are having operating difficulties. \\n\\nRequired:\\nFrom the information presented, what do you think is the cause of Person X's reported decrease in earnings? How can this be corrected?
Burke's Corner currently selis blue jeans and T-shirts. Management is considering adding fleece tops to its inventory to provide a cooler weather option. The tops would sell for 547 each with expected sales of 3, 500 tops annually. By adding the fleece tops, management feels the firm will sell an additional 205 pairs of jeans at 557 a pair and 340 fewer T-shirts at $18 each. The variable cost per unit is $25 on the jeans, $9 on the T-shirts, and $21 on the fleece tops. With the new item, the depreciation expense is $27,000 a year and the fixed costs are $62, 000 annually. The tax rate is 21 percent. What is the project's operating cash flow?
y It was the end of the third quarter for Marigold Industries. There had been some discussion in prior quarters about best practices. related to carrying ending inventory of its key DM, acetic acid, for making vinegar. Per established standards, 7.1 ounces of acetic acid at a budgeted price of $0.30 per ounce were needed for each gallon of vinegar (128 ounces). The new production manager wants to follow lean practices and buy only what is needed for production, while the former production manager preferred to keep some inventory on hand for emergencies. For the third quarter, 316,800 ounces of acetic acid were purchased on account and used to make 44,000 gallons of vinegar. The purchase price was $88,704. (a1) Determine the DM price and efficiency variances for the third quarter based on the information above. DM price variance $ Your answer is correct. DM efficiency variance $ eTextbook and Media 4 R F V % 5 -T G B $ 6 O Search & 4- 7 YU H J N * 6336 1320 00 8 3 T ( K Favorable…
Required information [The following information applies to the questions displayed below.] Black Diamond Company produces snowboards. Each snowboard requires 3 pounds of carbon fiber. Management reports that 5,300 snowboards and 6,300 pounds of carbon fiber are in inventory at the beginning of the third quarter, and that 153,000 snowboards are budgeted to be sold during the third quarter. Management wants to end the third quarter with 3,800 snowboards and 4,300 pounds of carbon fiber in inventory. Carbon fiber costs $18 per pound. Each snowboard requires 0.5 hour of direct labor at $23 per hour. Variable overhead is budgeted at the rate of $11 per direct labor hour. The company budgets fixed overhead of $1,785,000 for the quarter. 3. Prepare the direct labor budget for the third quarter. BLACK DIAMOND COMPANY Units to produce Direct labor hours needed Cost of direct labor Direct Labor Budget Third Quarter
Required information [The following information applies to the questions displayed below.) Black Diamond Company produces snowboards. Each snowboard requires 3 pounds of carbon fiber. Management reports that 6,800 snowboards and 7,800 pounds of carbon fiber are in inventory at the beginning of the third quarter, and that 168,000 snowboards are budgeted to be sold during the third quarter. Management wants to end the third quarter with 5,300 snowboards and 5,800 pounds of carbon fiber in inventory. Carbon fiber costs $17 per pound. Each snowboard requires 0.5 hour of direct labor at $22 per hour. Variable overhead is budgeted at the rate of $12 per direct labor hour. The company budgets fixed overhead of $1,800,000 for the quarter. Required: 1. Prepare the production budget for the third quarter. Hint: Desired ending inventory units are given. BLACK DIAMOND COMPANY Production Budget (in units) Third Quarter Total required units Units to produce
Workman Co. (Workman) had sales of 15,000 units of its only product in Year 10, with a selling price of $66 per unit. In Year 11, the sales manager anticipates Workman selling 20% more units than it sold in Year 10, with a selling price of $68 per unit. The controller decides to use a traditional budgeting approach and to apply a conservative increase of 10% to all income statement line items. Which one of the following is the amount of sales revenue that will appear in the budgeted income statement for Year 11 using the controller's approach? A. $1,089,000 B. $1,224, 000 C. $1,188,000 D. $1,122,000
Tyrone Fletcher, president of SoftGro, Incorporated, was looking forward to seeing the performance reports for November because he knew the company's sales for the month had exceeded budget by a considerable margin. SoftGro, a distributor of educational software packages, had been growing steadily for approximately two years. Fletcher's biggest challenge at this point was to ensure that the company did not lose control of expenses during this growth period. When Fletcher received the November reports, he was dismayed to see the large unfavorable variance in the company's Monthly Selling Expense Report that follows. Unit sales Dollar sales Orders processed Sales personnel per month Advertising Staff salaries Sales salaries Commissions SOFTGRO, INCORPORATED Monthly Selling Expense Report For the Month of November Annual Budget 2,100,000 $ 176,400,000 67,200 90 $ 37,200,000 3,120,000 2,268,000 7,056,000 $ 25,200,000 November Budget November Actual 300,000 November Variance 338,000 38,000…
In Blossom Corporation's first year of operations, inadequate budgeting led to significant cost overruns in multiple production areas. Direct materials needed to be express-delivered, and laborers needed to be paid overtime because reasonable budgets weren't in place, nor were managers properly trained on how to use them. If adequate budgeting had been done, the company might have achieved its objectives that year. As year one comes to a close, all managers are now committed to creating and using accurate budgets for next year so they can properly plan for the resources to support production. The following information is in place to assist the management team in budgeting for year 2. Budgeted sales volume Additional information: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. (a1) Sales Volume Selling Price Sales Revenue Q1 Q2 $ $ Year 2 Q3 Budgeted selling price is $82/unit. Desired ending FG Inventory is 25% of the following quarter's sales volume. Beginning FG Inventory on January 1 of Year 2 is…
Classic Loungers is in the process of preparing a production cost budget for August. Actual costs in July for 400 chaise lounge chairs were: Materials cost $ 6,000 Labor cost 8,000 Rent 2,000 Depreciation 4,000 Other fixed costs 5,000 Total $ 25,000 Material cost and Labor cost are considered variable. Each chair was sold for $160 in July. Management estimates that sales will increase to 440 chairs during August if the company lowers the selling price to $150 per chair. What is the incremental profit (loss) associated with the price reduction? $(200) $(2,200) $2,100 $800 $600
ABC, Inc., uses the absorption costing approach to cost-plus pricing described in the text to set prices for its products. Based on budgeted sales of 45,000 unit next year,the unit product cost of a particular product is 15.60. The company's selling,general,and administrative expenses for this product are budgeted to be 1,035,000 in total for the year. The company has invested 280,000 in this product and expects a return on investment of 11%. The selling price for this product based on the absorption costing approach would be closest to: a. 39.28 b. 17.32 c. 97.20 d. 38.60