The per-unit standards for direct materials are 2.4 pounds at $5.59 per pound. Last month, 3,900 pounds of direct materials that actually cost $20,600 were used to produce 1,300 units of product. What was the direct materials quantity variance for last month? Enter a favorable variance as a positive number or an unfavorable variance as a negative number. Please explain and show work.

The per-unit standards for direct materials are 2.4 pounds at $5.59 per pound. Last month, 3,900 pounds of direct materials that actually cost $20,600 were used to produce 1,300 units of product. What was the direct materials quantity variance for last month? Enter a favorable variance as a positive number or an unfavorable variance as a negative number. Please explain and show work.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter8: Standard Costs And Variances

Section: Chapter Questions

Problem 5PA: Ed Co. manufactures two types of O rings, large and small. Both rings use the same material but...

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Ed Co. manufactures two types of O rings, large and small. Both rings use the same material but require different amounts. Standard materials for both are shown. At the beginning of the month, Edve Co. bought 25,000 feet of rubber for $6.875. The company made 3,000 large O rings and 4,000 small O rings. The company used 14,500 feet of rubber. A. What are the direct materials price variance, the direct materials quantity variance, and the total direct materials cost variance? B. If they bought 10,000 connectors costing $310, what would the direct materials price variance be for the connectors? C. If there was an unfavorable direct materials price variance of $125, how much did they pay per toot for the rubber?
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.
Reddy Corporation has collected the following data for the month or June: What is the variable overhead efficiency variance?
At the end of the period, the factory overhead account has a credit balance of 10,000. (a) Is the total factory cost variance favorable or unfavorable? (b) Are the controllable and volume variances favorable or unfavorable?
Sommers Company uses the following rule to determine whether materials usage variances should be investigated: A materials usage variance will be investigated anytime the amount exceeds the lesser of 12,000 or 10% of the standard cost. Reports for the past 5 weeks provided the following information: Required: 1. Using the rule provided, identify the cases that will be investigated. 2. CONCEPTUAL CONNECTION Suppose investigation reveals that the cause of an unfavorable materials usage variance is the use of lower-quality materials than are normally used. Who is responsible? What corrective action would likely be taken? 3. CONCEPTUAL CONNECTION Suppose investigation reveals that the cause of a significant unfavorable materials usage variance is attributable to a new approach to manufacturing that takes less labor time but causes more material waste. Examination of the labor efficiency variance reveals that it is favorable and larger than the unfavorable materials usage variance. Who is responsible? What action should be taken?
In all of the exercises involving variances, use F and U to designate favorable and unfavorable variances, respectively. E8-1 through E8-5 use the following data: The standard operating capacity of Tecate Manufacturing Co. is 1,000 units. A detailed study of the manufacturing data relating to the standard production cost of one product revealed the following: 1. Two pounds of materials are needed to produce one unit. 2. Standard unit cost of materials is 8 per pound. 3. It takes one hour of labor to produce one unit. 4. Standard labor rate is 10 per hour. 5. Standard overhead (all variable) for this volume is 4,000. Each case in E8-1 through E8-5 requires the following: a. Set up a standard cost summary showing the standard unit cost. b. Analyze the variances for materials and labor. c. Make journal entries to record the transfer to Work in Process of: 1. Materials costs 2. Labor costs 3. Overhead costs (When making these entries, include the variances.) d. Prepare the journal entry to record the transfer of costs to the finished goods account. Standard unit cost; variance analysis; journal entries 1,000 units were started and finished. Case 1: All prices and quantities for the cost elements are standard, except for materials cost, which is 8.50 per pound. Case 2: All prices and quantities for the cost elements are standard, except that 1,900 lb of materials were used.
The worksheet you have developed will handle most simple variance analysis problems. Try the problem below for Pscheidl, Inc.: Actual production for October was 11,500 units. Compute the direct materials and direct labor variances for Pscheidl, Inc. Be careful when entering your input because this problem presents the information in a different format from the McGrade Industries data. Save the file as PRIMEVAR4. Print the worksheet when done.
Ribcos labor cost information for making its only product for March is as follows: A. What is the direct labor rate variance? B. What is the direct labor time variance? C. What is the total direct labor variance?
Refer to Cornerstone Exercise 8.13. In March, Nashler Company produced 163,200 units and had the following actual costs: Required: 1. Prepare a performance report for Nashler Company comparing actual costs with the flexible budget for actual units produced. 2. What if Nashler Companys actual direct materials cost were 1,175,040? How would that affect the variance for direct materials? The total cost variance?
The following data relate to labor cost for production of 5,000 cellular telephones: Actual: 3,360 hrs. at $15.9 Standard: 3,310 hrs. at $16.2 a. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Sfill in the blank 1 FavorableUnfavorable Sfill in the blank 3 FavorableUnfavorable Rate variance Time variance Total direct labor cost variance
The following data relate to labor cost for production of 5,900 cellular telephones: Actual: 3,970 hrs. at $16.10 Standard: 3,910 hrs. at $16.30 a. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Rate variance Time variance 2$ Total direct labor cost variance b. The employees may have been less-experienced or poorly trained, thereby resulting in a labor rate than planned. The lower level of experience or training may have resulted in efficient performance. Thus, the actual time required was than standard.