Variances The variances are used to calculate to the find the variation in actual cost by comparing it to the standard cost. Variances normally find the difference between cost that is actually incurred, and cost which was estimated by the business Variance Report The report which provides the details of the actual and budgeted income and expenses along with the variance is called as variance report. It shows the difference between actual and estimated financial results To describe: The normal industry standard for plants to be considered operating at full capacity.

Question

Want to see the full answer?

Answer 1

Question

Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

Chapter 11, Problem 11.5BYP

(a)

To determine

Variances

The variances are used to calculate to the find the variation in actual cost by comparing it to the standard cost. Variances normally find the difference between cost that is actually incurred, and cost which was estimated by the business

Variance Report

The report which provides the details of the actual and budgeted income and expenses along with the variance is called as variance report. It shows the difference between actual and estimated financial results

To describe: The normal industry standard for plants to be considered operating at full capacity.

(b)

To determine

To describe: The ideal standard of the company for hoping to achieve.

(c)

To determine

To discuss: The reason for the company does not operate a third shift.

(d)

To determine

To discuss: The some potential drawback of the midnight shift, and implication that have for variances from standards.

(e)

To determine

To describe: Potential sales/marketing disadvantage does the third shift.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

The chief executive officer (CEO) of Cobalt Inc. just read an article written by a business professor at Harvard University describing the benefits of the lean philosophy. The CEO issued the following statement after reading the article: This company will become a lean manufacturing company. Presently, we have too much inventory. To become lean, we need to eliminate the excess inventory. Therefore, I want all employees to begin reducing inventories until we make products “just in time. ” Thank you for your cooperation. How would you respond to the CEO’s statement?

“That old equipment for producing carburetors is worn out,” said Bill Seebach, president of Hondrich Company. “We need to make a decision quickly.” The company is trying to decide whether it should rent new equipment and continue to make its carburetors internally or whether it should discontinue production of its carburetors and purchase them from an outside supplier. The alternatives follow: Alternative 1: Rent new equipment for producing the carburetors for $189,000 per year. Alternative 2: Purchase carburetors from an outside supplier for $20.25 each. Hondrich Company’s costs per unit of producing the carburetors internally (with the old equipment) are given below. These costs are based on a current activity level of 30,000 units per year: Direct materials $ 5.70 Direct labour 8.00 Variable overhead 2.40 Fixed overhead ($3.15 supervision, $1.80 depreciation, and $4.00 general company overhead) 8.95 Total cost per…

“That old equipment for producing carburetors is worn out,” said Bill Seebach, president of Hondrich Company. “We need to make a decision quickly.” The company is trying to decide whether it should rent new equipment and continue to make its carburetors internally or whether it should discontinue production of its carburetors and purchase them from an outside supplier. The alternatives follow: Alternative 1: Rent new equipment for producing the carburetors for $150,000 per year. Alternative 2: Purchase carburetors from an outside supplier for $17.80 each. Hondrich Company’s costs per unit of producing the carburetors internally (with the old equipment) are given below. These costs are based on a current activity level of 30,000 units per year: Direct materials $ 4.90 Direct labour 10.00 Variable overhead 1.20 Fixed overhead ($2.50 supervision, $1.80 depreciation, and $4.00 general company overhead) 8.30 Total cost per…

Answer 2

Question

Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

Chapter 11, Problem 11.5BYP

(a)

To determine

Variances

The variances are used to calculate to the find the variation in actual cost by comparing it to the standard cost. Variances normally find the difference between cost that is actually incurred, and cost which was estimated by the business

Variance Report

The report which provides the details of the actual and budgeted income and expenses along with the variance is called as variance report. It shows the difference between actual and estimated financial results

To describe: The normal industry standard for plants to be considered operating at full capacity.

(b)

To determine

To describe: The ideal standard of the company for hoping to achieve.

(c)

To determine

To discuss: The reason for the company does not operate a third shift.

(d)

To determine

To discuss: The some potential drawback of the midnight shift, and implication that have for variances from standards.

(e)

To determine

To describe: Potential sales/marketing disadvantage does the third shift.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 3

Question

Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

Chapter 11, Problem 11.5BYP

(a)

To determine

Variances

The variances are used to calculate to the find the variation in actual cost by comparing it to the standard cost. Variances normally find the difference between cost that is actually incurred, and cost which was estimated by the business

Variance Report

The report which provides the details of the actual and budgeted income and expenses along with the variance is called as variance report. It shows the difference between actual and estimated financial results

To describe: The normal industry standard for plants to be considered operating at full capacity.

(b)

To determine

To describe: The ideal standard of the company for hoping to achieve.

(c)

To determine

To discuss: The reason for the company does not operate a third shift.

(d)

To determine

To discuss: The some potential drawback of the midnight shift, and implication that have for variances from standards.

(e)

To determine

To describe: Potential sales/marketing disadvantage does the third shift.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 4

Question

Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

Chapter 11, Problem 11.5BYP

(a)

To determine

Variances

The variances are used to calculate to the find the variation in actual cost by comparing it to the standard cost. Variances normally find the difference between cost that is actually incurred, and cost which was estimated by the business

Variance Report

The report which provides the details of the actual and budgeted income and expenses along with the variance is called as variance report. It shows the difference between actual and estimated financial results

To describe: The normal industry standard for plants to be considered operating at full capacity.

(b)

To determine

To describe: The ideal standard of the company for hoping to achieve.

(c)

To determine

To discuss: The reason for the company does not operate a third shift.

(d)

To determine

To discuss: The some potential drawback of the midnight shift, and implication that have for variances from standards.

(e)

To determine

To describe: Potential sales/marketing disadvantage does the third shift.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 5

Chapter 11, Problem 11.5BYP

(a)

To determine

Variances

The variances are used to calculate to the find the variation in actual cost by comparing it to the standard cost. Variances normally find the difference between cost that is actually incurred, and cost which was estimated by the business

Variance Report

The report which provides the details of the actual and budgeted income and expenses along with the variance is called as variance report. It shows the difference between actual and estimated financial results

To describe: The normal industry standard for plants to be considered operating at full capacity.

(b)

To determine

To describe: The ideal standard of the company for hoping to achieve.

(c)

To determine

To discuss: The reason for the company does not operate a third shift.

(d)

To determine

To discuss: The some potential drawback of the midnight shift, and implication that have for variances from standards.

(e)

To determine

To describe: Potential sales/marketing disadvantage does the third shift.

Answer 6

Chapter 11, Problem 11.5BYP

(a)

To determine

Variances

The variances are used to calculate to the find the variation in actual cost by comparing it to the standard cost. Variances normally find the difference between cost that is actually incurred, and cost which was estimated by the business

Variance Report

The report which provides the details of the actual and budgeted income and expenses along with the variance is called as variance report. It shows the difference between actual and estimated financial results

To describe: The normal industry standard for plants to be considered operating at full capacity.

Answer 7

Chapter 11, Problem 11.5BYP

(a)

To determine

Variances

The variances are used to calculate to the find the variation in actual cost by comparing it to the standard cost. Variances normally find the difference between cost that is actually incurred, and cost which was estimated by the business

Variance Report

The report which provides the details of the actual and budgeted income and expenses along with the variance is called as variance report. It shows the difference between actual and estimated financial results

To describe: The normal industry standard for plants to be considered operating at full capacity.

Answer 8

(b)

To determine

To describe: The ideal standard of the company for hoping to achieve.

Answer 9

(b)

To determine

To describe: The ideal standard of the company for hoping to achieve.

Answer 10

(c)

To determine

To discuss: The reason for the company does not operate a third shift.

Answer 11

(c)

To determine

To discuss: The reason for the company does not operate a third shift.

Answer 12

(d)

To determine

To discuss: The some potential drawback of the midnight shift, and implication that have for variances from standards.

Answer 13

(d)

To determine

To discuss: The some potential drawback of the midnight shift, and implication that have for variances from standards.

Answer 14

(e)

To determine

To describe: Potential sales/marketing disadvantage does the third shift.

Answer 15

(e)

To determine

To describe: Potential sales/marketing disadvantage does the third shift.

Answer 16

Expert Solution & Answer

Answer 17

Expert Solution & Answer

Answer 18

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 19

Ch. 11 - (a) Standard costs are the expected total cost of...Ch. 11 - (a) Explain the similarities and differences...Ch. 11 - Standard costs facilitate management planning....Ch. 11 - Standard costs facilitate management planning....Ch. 11 - Prob. 5Q Ch. 11 - What factors should be considered in setting (a)...Ch. 11 - The objective in setting the direct labor quantity...Ch. 11 - How is the predetermined overhead rate determined...Ch. 11 - What is the difference between a favorable cost...Ch. 11 - In each of the following formulas, supply the...

Solution Summary: The author explains that variances are used to calculate the variation in actual cost by comparing it to the standard cost.

Videos

To describe: The ideal standard of the company for hoping to achieve.

To discuss: The reason for the company does not operate a third shift.

To discuss: The some potential drawback of the midnight shift, and implication that have for variances from standards.

To describe: Potential sales/marketing disadvantage does the third shift.

Want to see the full answer?

Chapter 11 Solutions