Rardin Corporation makes a product with the following standard costs: Standard Quantity or Hours Standard Price or Rate Direct materials 7.4 ounces Direct labor 0.3 hours Variable overhead 0.3 hours The company reported the following results concerning this product in July. Actual output Raw materials used in production Purchases of raw materials. Actual direct labor-hours Actual cost of raw materials purchases Actual direct labor cost Actual variable overhead cost The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased. Required: b. Compute the materials price variance. Do not indicate whether Favorable or Unfavorable. $8.00 per ounce $16.00 per hour $7.00 per hour 2,200 units 16,420 ounces 17,900 ounces 720 hours $141,410 $12,528 $5,112
Rardin Corporation makes a product with the following standard costs: Standard Quantity or Hours Standard Price or Rate Direct materials 7.4 ounces Direct labor 0.3 hours Variable overhead 0.3 hours The company reported the following results concerning this product in July. Actual output Raw materials used in production Purchases of raw materials. Actual direct labor-hours Actual cost of raw materials purchases Actual direct labor cost Actual variable overhead cost The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased. Required: b. Compute the materials price variance. Do not indicate whether Favorable or Unfavorable. $8.00 per ounce $16.00 per hour $7.00 per hour 2,200 units 16,420 ounces 17,900 ounces 720 hours $141,410 $12,528 $5,112
Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter2: Accounting For Materials
Section: Chapter Questions
Problem 17E: Davis Co. uses backflush costing to account for its manufacturing costs. The trigger points are the...
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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