Horngren's Financial & Managerial Accounting, The Managerial Chapters (6th Edition)
6th Edition
ISBN: 9780134486857
Author: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Textbook Question
Chapter 23, Problem 27AP
Hear Smart manufactures headphone cases. During September 2018, the company produced and sold 105,000 cases and recorded the following
Standard Cost Information
Actual Cost Information
Requirements
- 1. Compute the cost and efficiency variances for direct materials and direct labor.
- 2. For manufacturing
overhead , compute the variable overhead cost and efficiency variances and the fixed overhead cost and volume variances. - 3. Hear Smart’s management used better quality materials during September. Discuss the trade-off between the two direct material variances.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
HeadsetHeadset
manufactures headphone cases. During September
20182018,
the company produced and sold
108 comma 000108,000
cases and recorded the following cost data:
LOADING...
(Click
the icon to view the cost data.)
Read the
requirements
LOADING...
.
Requirement 1. Compute the cost and efficiency variances for direct materials and direct labor.
Begin with the cost variances. Select the required formulas, compute the cost variances for direct materials and direct labor, and identify whether each variance is favorable (F) or unfavorable (U).(Abbreviations used: AC = actual cost; AQ = actual quantity; FOH = fixed overhead; SC = standard cost; SQ = standard quantity.)
Formula
Variance
Direct materials cost variance
=
=
Direct labor cost variance
=
=
Next compute the efficiency variances. Select the required formulas, compute the efficiency variances for direct materials and…
Good Deal, Inc. uses a standard cost system and provides the following information.
Good Deal allocates manufacturing overhead to production based on standard direct labor hours.
Good Deal reported the following actual results for 2024: actual number of units produced, 1,000; actual variable overhead, $5,000; actual fixed overhead, $3,400; actual direct labor hours, 1,900.
Requirement 1. Compute the variable overhead cost and efficiency variances and fixed overhead cost and volume variances. Show all computations.
Begin with the variable overhead cost and efficiency variances. Select the required formulas, compute the variable overhead cost and efficiency variances, and identify whether each variance is favorable (F) or unfavorable (U).(Abbreviations used: AC = actual cost; AQ = actual quantity; FOH = fixed overhead; SC = standard cost; SQ = standard quantity; VOH = variable overhead.)
Data table has the following
Static budget variable…
The managers of Sandusky Inc. have decided to use the month of January to determine the cost of producing their widget for the year. This will help determine proper product pricing and is important for control purposes. Using the data from January, the managers can determine the costs associated with material and labor. However, fixed indirect costs must still be determined. Management intends to use the prior year’s data to determine overhead costs. It is assumed that management will allocate an equal amount of estimated costs each month. Is this an appropriate decision by management? Should January be used as the reference point for the whole year?
Chapter 23 Solutions
Horngren's Financial & Managerial Accounting, The Managerial Chapters (6th Edition)
Ch. 23 - Garland Company expects to sell 600 wreaths in...Ch. 23 - Match the variance to the correct definition....Ch. 23 - Match the variance to the correct definition....Ch. 23 - Match the variance to the correct definition....Ch. 23 - Match the variance to the correct definition....Ch. 23 - Match the variance to the correct definition....Ch. 23 - Prob. 7TICh. 23 - Prob. 8TICh. 23 - Prob. 9TICh. 23 - Prob. 10TI
Ch. 23 - Prob. 11TICh. 23 - Tipton Company manufactures shirts, During June,...Ch. 23 - Prob. 13TICh. 23 - Prob. 14TICh. 23 - Prob. 15TICh. 23 - This Try It! continues the previous Try It! for...Ch. 23 - Calculate the following variances: Fixed overhead...Ch. 23 - Prob. 18TICh. 23 - Prob. 19TICh. 23 - Prob. 20TICh. 23 - Prob. 21TICh. 23 - Prob. 22TICh. 23 - Prob. 23TICh. 23 - Prob. 24TICh. 23 - Prob. 25TICh. 23 - MajorNet Systems is a start-up company that makes...Ch. 23 - MajorNets sales volume variance for total costs is...Ch. 23 - MajorNets flexible budget variance for total costs...Ch. 23 - MajorNet Systemss managers could set direct labor...Ch. 23 - What is MajorNets direct labor cost variance for...Ch. 23 - What is MajorNets direct labor efficiency variance...Ch. 23 - FrontGrades standard variable manufacturing...Ch. 23 - Calculate the variable overhead cost variance for...Ch. 23 - Calculate the variable overhead efficiency...Ch. 23 - Prob. 10QCCh. 23 - MajorNet Systemss static budget predicted...Ch. 23 - Prob. 1RQCh. 23 - Prob. 2RQCh. 23 - What is a static budget performance report?Ch. 23 - How do flexible budgets differ from static...Ch. 23 - Prob. 5RQCh. 23 - What are the two components of the static budget...Ch. 23 - What is a flexible budget performance report?Ch. 23 - Prob. 8RQCh. 23 - Prob. 9RQCh. 23 - Give the general formulas for determining cost and...Ch. 23 - How does the static budget affect cost and...Ch. 23 - List the direct materials variances, and briefly...Ch. 23 - Prob. 13RQCh. 23 - Prob. 14RQCh. 23 - List the fixed overhead variances, and briefly...Ch. 23 - Prob. 16RQCh. 23 - Prob. 17RQCh. 23 - Prob. 18RQCh. 23 - Prob. 19RQCh. 23 - Prob. 20RQCh. 23 - Prob. 1SECh. 23 - Moje, Inc. manufactures travel locks. The budgeted...Ch. 23 - Complete the flexible budget variance analysis by...Ch. 23 - Prob. 4SECh. 23 - Setting standards for a product may involve many...Ch. 23 - Prob. 6SECh. 23 - Martin, Inc. manufactures lead crystal glasses....Ch. 23 - Martin, Inc. is a manufacturer of lead crystal...Ch. 23 - Prob. 9SECh. 23 - Prob. 10SECh. 23 - Prob. 11SECh. 23 - Prob. 12SECh. 23 - Prob. 13SECh. 23 - Prob. 14SECh. 23 - Prob. 15ECh. 23 - Murphy Company managers received the following...Ch. 23 - Prob. 17ECh. 23 - Prob. 18ECh. 23 - Prob. 19ECh. 23 - Prob. 20ECh. 23 - Prob. 21ECh. 23 - Prob. 22ECh. 23 - Prob. 23ECh. 23 - McCarthy Fender, which uses a standard cost...Ch. 23 - Cell One Technologies manufactures capacitors for...Ch. 23 - Morton Recliners manufactures leather recliners...Ch. 23 - Hear Smart manufactures headphone cases. During...Ch. 23 - Moss manufactures coffee mugs that it sells to...Ch. 23 - Review your results from Problem P23-28A. Mosss...Ch. 23 - Prob. 30BPCh. 23 - McKnight Recliners manufactures leather recliners...Ch. 23 - Headset manufactures headphone cases. During...Ch. 23 - Prob. 33BPCh. 23 - Review your results from Problem P23-33B....Ch. 23 - Download an Excel template for this problem online...Ch. 23 - This continues the Piedmont Computer Company...Ch. 23 - Prob. 1TIATCCh. 23 - Suppose you manage the local Scoopys ice cream...Ch. 23 - Drew Gastello, general manager of Sunflower...Ch. 23 - In 75 words or fewer, explain what a cost variance...
Additional Business Textbook Solutions
Find more solutions based on key concepts
For each of the following transactions, state which special journal (Sales Journal, Cash Receipts Journal, Cash...
Principles of Accounting Volume 1
This year, Prewer Inc. received a 160,000 dividend on its investment consisting of 16 percent of the outstandin...
PRINCIPLES OF TAXATION F/BUS.+INVEST.
BE1-7 Indicate which statement you would examine to find each of the following items: income statement (IS), ba...
Financial Accounting
How would the decision to dispose of a segment of operations using a split-off rather than a spin-off impact th...
Advanced Financial Accounting
Preparing Financial Statements from a Trial Balance The following accounts are taken from Equilibrium Riding, I...
Fundamentals Of Financial Accounting
Discussion Analysis A13-41 Discussion Questions 1. How do managers use the statement of cash flows? 2. Describ...
Managerial Accounting (5th Edition)
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
- Silven Company has identified the following overhead activities, costs, and activity drivers for the coming year: Silven produces two models of cell phones with the following expected activity demands: 1. Determine the total overhead assigned to each product using the four activity drivers. 2. Determine the total overhead assigned to each model using the two most expensive activities. The costs of the two relatively inexpensive activities are allocated to the two expensive activities in proportion to their costs. 3. Using ABC as the benchmark, calculate the percentage error and comment on the accuracy of the reduced system. Explain why this approach may be desirable.arrow_forwardDelano Company uses two types of direct labor for the manufacturing of its products: fabricating and assembly. Delano has developed the following standard mix for direct labor, where output is measured in number of circuit boards. During the second week in April, Delano produced the following results: Required: 1. Calculate the yield ratio. 2. Calculate the standard cost per unit of the yield. 3. Calculate the direct labor yield variance. 4. Calculate the direct labor mix variance.arrow_forwardAt the beginning of the year, Lopez Company had the following standard cost sheet for one of its chemical products: Lopez computes its overhead rates using practical volume, which is 80,000 units. The actual results for the year are as follows: (a) Units produced: 79,600; (b) Direct labor: 158,900 hours at 18.10; (c) FOH: 831,000; and (d) VOH: 112,400. Required: 1. Compute the variable overhead spending and efficiency variances. 2. Compute the fixed overhead spending and volume variances.arrow_forward
- Bumblebee Mobiles manufactures a line of cell phones. The management has identified the following overhead costs and related cost drivers for the coming year. The following were incurred in manufacturing two of their cell phones, Bubble and Burst, during the first quarter. REQUIREMENT Review the worksheet called ABC that follows these requirements. You have been asked to determine the cost of each product using an activity-based cost system. Note that the problem information is already entered into the Data Section of the ABC worksheet.arrow_forwardBotella Company produces plastic bottles. The unit for costing purposes is a case of 18 bottles. The following standards for producing one case of bottles have been established: During December, 78,000 pounds of materials were purchased and used in production. There were 15,000 cases produced, with the following actual prime costs: Required: 1. Compute the materials variances. 2. Compute the labor variances. 3. CONCEPTUAL CONNECTION What are the advantages and disadvantages that can result from the use of a standard costing system?arrow_forwardMethod of Least Squares, Predicting Cost for Different Time Periods from the One Used to Develop a Cost Formula Refer to the information for Farnsworth Company on the previous page. However, assume that Tracy has used the method of least squares on the receiving data and has gotten the following results: Required: 1. Using the results from the method of least squares, prepare a cost formula for the receiving activity. 2. Using the formula from Requirement 1, what is the predicted cost of receiving for a month in which 1,450 receiving orders are processed? (Note: Round your answer to the nearest dollar.) 3. Prepare a cost formula for the receiving activity for a quarter. Based on this formula, what is the predicted cost of receiving for a quarter in which 4,650 receiving orders are anticipated? Prepare a cost formula for the receiving activity for a year. Based on this formula, what is the predicted cost of receiving for a year in which 18,000 receiving orders are anticipated?arrow_forward
- This cost data from Hickory Furniture is for the year 2017. Using the high-low method, express the factory utility expenses as an equation where x represents number of chairs produced. Predict the utility costs if 900 chairs are produced. Predict the utility costs if 750 chairs are produced. Using Excel, create a scatter graph of the cost data and explain the relationship between number of chairs processed and utility expenses.arrow_forwardGlacier Bicycle Company manufactures commuter bicycles from recycled materials. The following data for October are available: a. Determine for October the direct labor rate variance, direct labor time variance, and total direct labor cost variance. b. How much direct labor should be debited to Work in Process?arrow_forwardThe controller of Ferrence Company estimates the amount of materials handling overhead cost that should be allocated to the company's two products using the data that are given below: The total materials handling cost for the year is expected to be $16,486.40. If the materials handling cost is allocated on the basis of material moves, how much of the total materials handling cost should be allocated to the specialty windows? (Round off your answer to the nearest whole dollar.) Question 12 options: $3,266 $9,274 $8,243 $6,595arrow_forward
- The HeatRadiator Company uses a normal-costing system with a single manufacturing overhead cost pool and machine-hours as the cost-allocation base. The following data are for 2017: Read the requirements2. Requirement 1. Compute the budgeted manufacturing overhead rate for 2017. Begin by selecting the formula you will use. Then, enter the amounts and calculate the rate. Budgeted manufacturing (1) / (2) = overhead rate / = Requirement 2. Compute the under-or overallocated manufacturing overhead of Heat Radiator in 2017. Begin by selecting the formula you will use. Next, enter the amounts in the formula and compute the under-or overallocated manufacturing overhead. (Use parentheses or a minus sign when entering overallocated amounts.) Manufacturing overhead (3) – (4) = under-allocated (overallocated)…arrow_forwardMichael Roberts is a cost accountant and business analyst for HP Clothing Company (HPCC), which manufactures expensive T-shirts. HPCC uses two direct cost categories: direct materials and direct manufacturing labor. It allocates manufacturing overhead to production based upon labor hours used. At the beginning of 2020, HPCC adopted the following standards for each T-shirt: Standard Quantity Standard Price Or Hour 3.1 kg 2 hours 2 hours Or Rate $9 /kg $8/hour Input Direct materials Direct labor Variable overhead $5 /hour Actual results for April 2020 were as follows: Production 3,200 T-shirts Direct materials purchased Direct materials used 12,900 kg. at S10 kg 9,000 kg 7,200 hours for $59,000 Direct labor Variable manufacturing overhead $ 35,600 Required: a) Compute the standard variable product cost per unit. b) For the month of April 2020, compute the following variances, indicating whether each is favorable or unfavorable: i. Direct materials price variance, based on purchases ii.…arrow_forwardChic Design is a manufacturer of large flower pots for urban settings. The company has these standards: (Click the icon to view the standards.) Last month, the company reported the following actual results for the production of 1,800 flower pots: (Click the icon to view the actual results.) (Click the icon to view related variances.) Assume the company uses a standard cost accounting system. Date Data table Direct materials (resin) Direct labor..... Accounts Requirement 1. Record Watermate's direct material and direct labor journal entries. (Record debits first, then credits. Exclude explanations from any journal entries. Abbreviations used: DM = Direct materials, DL = Direct labor) Let's start by recording the entry for the purchase of raw materials. Journal Entry Standard variable manufacturing overhead rate Budgeted fixed manufacturing overhead Standard fixed MOH rate Print Debit Done Credit 12 pounds per pot at a cost of $5.00 per pound 2.0 hours at a cost of $23.00 per hour .…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Managerial Accounting: The Cornerstone of Busines...AccountingISBN:9781337115773Author:Maryanne M. Mowen, Don R. Hansen, Dan L. HeitgerPublisher:Cengage Learning
Managerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College Pub
Financial And Managerial AccountingAccountingISBN:9781337902663Author:WARREN, Carl S.Publisher:Cengage Learning,
Excel Applications for Accounting PrinciplesAccountingISBN:9781111581565Author:Gaylord N. SmithPublisher:Cengage Learning
Cornerstones of Cost Management (Cornerstones Ser...AccountingISBN:9781305970663Author:Don R. Hansen, Maryanne M. MowenPublisher:Cengage Learning
Principles of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax College
Managerial Accounting: The Cornerstone of Busines...
Accounting
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Cengage Learning
Managerial Accounting
Accounting
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:South-Western College Pub
Financial And Managerial Accounting
Accounting
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:Cengage Learning,
Excel Applications for Accounting Principles
Accounting
ISBN:9781111581565
Author:Gaylord N. Smith
Publisher:Cengage Learning
Cornerstones of Cost Management (Cornerstones Ser...
Accounting
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Cengage Learning
Principles of Accounting Volume 2
Accounting
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax College
What is variance analysis?; Author: Corporate finance institute;https://www.youtube.com/watch?v=SMTa1lZu7Qw;License: Standard YouTube License, CC-BY