Managerial Accounting
17th Edition
ISBN: 9781260247787
Author: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer
Publisher: RENT MCG
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Standard Costing and Variance Analysis
Standard Price or Rate
P6.00 per meter
Direct Materials
Direct Labor
Variable Factory Overhead
P3.00 direct labor hour
per
Factory overhead is applied to production based on direct labor hours. During
the month of February, 5,000 units were produced and sold to customers. Th
following are the selected production data for the month:
Materials
Direct
Variable
used
Labor
FOH
P52,500
Standard Cost allowed
Actual cost incurred
P84,000
P75,000
P6,000 U
P21,000
P18,000
?
Materials Quantity variance
Actual direct labor hours
7,500 hours
Standard FOH rate per direct labor hour
Standard Price per meter
P3.00/hr.
P6.00 /m.
The difference between the standard and actual cost per unit produced is P0.15
favorable.
Required: Compute the following:
1. The standard cost per unit of product.
2. The actual cost per unit of product.
Standard Quantity per unit.
4. Material Price variance.
3.
5.
6. Labor Rate variance.
Standard direct labor rate per hour.
7. Labor…
ssignment-Variance Analysis i
Saved
Huron Company produces a commercial cleaning compound known as Zoom. The direct materials and direct labor standards for one
unit of Zoom are given below:
Standard
Quantity or
Standard Price
Standard
Hours
or Rate
$2.10 per pound
$5.00 per hour
Cost
$16.59
$ 2.50
Direct materials
7.90 pounds
0.50 hours
Direct labor
ok
During the most recent month, the following activity was recorded:
nces
a. 14,850.00 pounds of material were purchased at a cost of $2.00 per pound.
b. All of the material purchased was used to produce 1,500 units of Zoom.
C. 600 hours of direct labor time were recorded at a total labor cost of $4,200.
Required:
1. Compute the materials price and quantity variances for the month.
2. Compute the labor rate and efficiency variances for the month.
(For all requirements, Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no
effect (i.e., zero variance). Input all amounts as positive…
MC Qu. 10-65 Assume that...
Cost standards for one unit of product no. C77:
Direct material
Direct labor
3 pounds at $2.70 per pound
7 hours at $7.50 per hour
Actual results:
Units produced
5,900 units
Direct material purchased
Direct material used
27,000 pounds at $2.90
17,400 pounds at $2.90
41,500 hours at $7.30
Direct labor
Assume that the company computes variances at the earliest point in time.
The standard hours allowed for the work performed are:
Multiple Choice
O 40,250.
41,450.
41,300.
41,200.
None of the answers is correct.
O
$
8.10
52.50
$ 78,300
50,460
302,950
Chapter 10 Solutions
Managerial Accounting
Ch. 10.A - EXERCISE 10A-1 Fixed Overhead Variances LO10-4...Ch. 10.A - EXERCISE 10A-2 Predetermined Overhead Rate;...Ch. 10.A - Prob. 3ECh. 10.A - EXERCISE 10A-4 Fixed Overhead Variances LO10-4...Ch. 10.A - EXERCISE 10A5 Using Fixed Overhead Variances LO104...Ch. 10.A - EXERCISE 10A-6 Predetermined Overhead Rate LO10-4...Ch. 10.A - EXERCISE 10A-7 Relations Among Fixed Overhead...Ch. 10.A - Prob. 8PCh. 10.A - PROBLEM 10A-9 Applying Overhead; Overhead...Ch. 10.A - PROBLEM 10A-10 Comprehensive Standard Cost...
Ch. 10.A -
PROBLEM 10A-11 Comprehensive Standard Cost...Ch. 10.A - Prob. 12PCh. 10.B - EXERCISE 10B-1 Standard Cost Flows; Income...Ch. 10.B - Prob. 2ECh. 10.B - Prob. 3ECh. 10.B - Prob. 4ECh. 10.B - Prob. 5PCh. 10.B - Prob. 6PCh. 10 - Prob. 1QCh. 10 - Why are separate price and quantity variances...Ch. 10 - 10-3 Who is generally responsible for the...Ch. 10 - The materials price variance can be computed at...Ch. 10 - 10-5 If the materials price variance is favorable...Ch. 10 - Prob. 6QCh. 10 - Prob. 7QCh. 10 - 10-8 What effect, if any, would you expect...Ch. 10 - 10-9 If variable manufacturing overhead is applied...Ch. 10 - 10-10 Why can undue emphasis on labor efficiency...Ch. 10 -
The Excel worksheet form that appears below is to...Ch. 10 - Prob. 2AECh. 10 - Prob. 1F15Ch. 10 - Prob. 2F15Ch. 10 - Prob. 3F15Ch. 10 - Prob. 4F15Ch. 10 - Prob. 5F15Ch. 10 - Prob. 6F15Ch. 10 - Prob. 7F15Ch. 10 - Prob. 8F15Ch. 10 - Prob. 9F15Ch. 10 - Preble Company manufactures one product. Its...Ch. 10 - Prob. 11F15Ch. 10 - Prob. 12F15Ch. 10 - Prob. 13F15Ch. 10 - Prob. 14F15Ch. 10 - Prob. 15F15Ch. 10 - EXERCISE 10-1 Direct Materials Variances LO10-1...Ch. 10 -
EXERCISE 10-2 Direct Labor Variances...Ch. 10 -
EXERCISE 10–3 Variable Overhead Variances...Ch. 10 - EXERCISE 10-4 Direct Labor and Variable...Ch. 10 -
EXERCISE 10-5 Working Backwards from Labor...Ch. 10 - EXERCISE 10-6 Direct Materials and Direct Labor...Ch. 10 - EXERCISE 10-7 Direct Materials Variances LOIO-1...Ch. 10 -
EXERCISE 10-8 Direct Materials and Direct Labor...Ch. 10 -
PROBLEM 10-9 Comprehensive Variance Analysis...Ch. 10 -
PROBLEM 10-10 Multiple Products, Materials, and...Ch. 10 - PROBLEM 10-11 Direct Materials and Direct Labor...Ch. 10 - PROBLEM 10-12 Variance Analysis in a...Ch. 10 - Prob. 13PCh. 10 - Prob. 14PCh. 10 - PROBLEM 10-15 Comprehensive Variance Analysis...Ch. 10 - Prob. 16PCh. 10 - Prob. 17C
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Question Content AreaApril Industries employs a standard costing system in the manufacturing of its sole product, a park bench. They purchased 60,000 feet of raw material for $360,000, and it takes 5 feet of raw materials to produce one park bench. In August, the company produced 11,000 park benches. The standard cost for material output was $110,000, and there was an unfavorable direct materials quantity variance of $7,000. A. What is April Industries’ standard price for one unit of material? Standard cost per unit $fill in the blank 1B. What was the total number of units of material used to produce the August output? Actual quantity feet fill in the blank 2 UnitsC. What was the direct materials price variance for August? Direct materials price variance $ fill in the blank 3arrow_forward0:29:44 The following materials standards have been established for a particular product: Standard quantity per unit of output Standard price 5.2 meters $18.00 per meter The following data pertain to operations concerning the product for the last month: Actual materials purchased Actual cost of materials purchased. Actual materials used in production Actual output What is the materials price variance for the month? 8,100 meters $151,065 7,700 meters 1,450 unitsarrow_forwardQuestion Content Area Direct Materials, Direct Labor, and Factory Overhead Cost Variance Analysis Santiago Inc. processes a base chemical into plastic. Standard costs and actual costs for direct materials, direct labor, and factory overhead incurred for the manufacture of 70,000 units of product were as follows: Line Item Description Standard Costs Actual Costs Direct materials 231,000 lbs. at $5.50 per lb. 228,700 lbs. at $5.30 per lb. Direct labor 17,500 hrs. at $16.20 per hr. 17,900 hrs. at $16.40 per hr. Factory overhead Rates per direct labor hr., based on 100% of normal capacity of 18,260 direct labor hrs.: Factory overhead Variable cost, $4.30 $74,500 variable cost Factory overhead Fixed cost, $6.80 $124,168 fixed cost Each unit requires 0.25 hour of direct labor. Required: a. Determine the direct materials price variance, direct materials quantity variance, and total direct materials cost variance. Enter a favorable variance as a negative number using…arrow_forward
- Problem 1 Marietta co. adopted a standard cost system several years ago. The standard costs for the prime costs of its single product follow: Material: 10 kg @ P4.50/kg P45.00 Labor: 6 hours @ P8.50/hr P51.00 The following operating data were taken from the records for November: Units completed 5,800 units Budgeted output 6,000 units Materials purchased 60,000 kg Total actual labor costs P306,600 Actual hours of labor 36,500 hours Material usage variance P2,250 unfavorable Total material variance P450 unfavorable Required: Compute for the following: Actual cost paid per kilogram Labor efficiency variancearrow_forward--/1 Question 16 View Policies Current Attempt in Progress Clark Company manufactures a product with a standard direct labor cost of two hours at $18 per hour. During July, 1400 units were produced using 3200 hours at $18.30 per hour. The labor quantity variance was port O $7320 U. O $7320 F. O $7200 U. O $6480 U. hp ins fiu f10 prt s fg f7 f8 f6 f5 +. & 96. 80 7 %D Y н TO 96arrow_forwardQuestion Content Area April Industries employs a standard costing system in the manufacturing of its sole product, a park bench. They purchased 60,000 feet of raw material for $240,000, and it takes 5 feet of raw materials to produce one park bench. In August, the company produced 10,000 park benches. The standard cost for material output was $100,000, and there was an unfavorable direct materials quantity variance of $7,000. A. What is April Industries’ standard price for one unit of material? Standard cost per unit $fill in the blank 1 B. What was the total number of units of material used to produce the August output? Actual quantity feet fill in the blank 2 Units C. What was the direct materials price variance for August? Direct materials price variance $ fill in the blank 3arrow_forward
- Problem 8 Material and Labor Variance Journal Entries Clyette Corporation uses a standard cost system and has the following standard costs for direct materials and direct labor. Direct materials: Direct labor 2.5 meters @ P14 per meter 1.6 hours @ P8 per hour P35.00 P12.80 During the month of February, 15,000 units were produced. The costs related to the production of the product were as follows: • 50,000 meters of materials were purchased at a cost of P13.80 per meter. 40,000 meters of materials were used. 25,000 direct labor hours were used at a cost of P8.60 per hour. Required: Prepare the journal entries to record the purchased of materials, used of materials and labor incurrence.arrow_forwardQuestion # 1 Standard and the actual costs for direct materials and direct labor are given as under: Standard costs Direct materials 8,000 units at total direct material costs Rs. 40,000 Direct labor: 7,000 hours at Rs. 6 per hour Actual costs Direct materials 8,500 units at Rs. 4.5 per unit Direct labor: 6,500 hours at Rs. 6.25 per hour Required a. Material Price Variance and Material Quantity Variance b. Labor Rate Variance and Labor Efficiency Variancearrow_forwardThe standard costs and actual costs for direct materials for the manufacture of 2,800 actual units of product are Standard Costs Direct materials (per completed unit) 1,040 kilograms @$8.82 Actual Costs Direct materials 2,800 kilograms @ $8.40 Round your final answer to the nearest dollar. The amount of direct materials price variance is a.$437 unfavorable b.$1,176 unfavorable c.$1,176 favorable d.$437 favorablearrow_forward
- Q.No.2 The standard and actual cost data of M/s. ABC Company are as follows: Standard Raw Material (DM) is 5000 units @ Rs. 10 while Actual 4900 units @ Rs. 8 Standard Direct Labor (DL) is 10000 hours @ Rs. 4 while Actual 12000 Hours @ Rs. 5 Standard Factory Overhead (FOH) is 50% of Direct Labor while Actual FOH Rs. 15000 Required: A) Calculate; Material Price Variance and Material Quantity Variance Labor rate variance and Labor time variance Overhead Variance B) Give journal entries to record the above information and close the variance accounts.arrow_forwardVariance Problem Standard Quantity Standard Cost Standard price $1.75 per hr $11.50 per hr $5.00 per hr per unit $7.00 $13.80 $6.00 per unit Direct Materials Direct Labor Variable Overhead 4 1.2 1.2 Manufacturing overhead is applied using direct labor hours as the base. During the month of July, XYZ company had the following information available about production: a. 9,000 units were produced b. 37,000 lbs of raw materials were purchased at a cost of $62,900 c. There was no beginning inventory and no ending iInventory of raw materials d. 10,500 hours of direct labor were used during the month at a cost of $119,175 e. Variable overhead cost in July totaled $57,750 Compute the following and verify the total variance for each component of product cost: 1. Material price variance, Material quantity variance, and Total material variance 2. Labor rate variance, Labor efficiency variance, and Total labor variance 3. Variable Overhead spending variance, Variable Overhead efficiency variance,…arrow_forwardQuestion 2 The following report has been produced for the production department for the ABC Company for the month of June 2022: Actual Вudget 10,000 Variance Volume (units) 12,800 2,800 (F) Direct materials 105,000 132,000 5,800 27,000(A) Other materials 4,700 1,100 (A) Direct labour 135,000 145,000 10,000(A) Production overheads 96,000 105,600 9,600(A) Head office recharges 26,000 32,000 6,000 (A) Total 366,700 420,400 53,700(A) • Direct materials and other materials are variable costs. • Direct labour includes fixed salary costs of £110,000 the balance is variable. The production overhead includes a variable cost that is constant at all volume levels, and a stepped fixed cost which changes when the volume level exceeds 11,000 units. • A further analysis of the production overheads is shown below: Volume (units) 8,000 10,000 12,000 Costs (£) £91,200 £96,000 £115,800 Required a. Compute budgeted rates for • Direct materials Other materials Variable direct labor cost b. Using high-low…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,
Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSON
Intermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill Education
Financial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education
What is variance analysis?; Author: Corporate finance institute;https://www.youtube.com/watch?v=SMTa1lZu7Qw;License: Standard YouTube License, CC-BY