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
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Textbook Question
Chapter 23, Problem 28AP
Moss manufactures coffee mugs that it sells to other companies for customizing with their own logos. Moss prepares flexible budgets and uses a
Actual cost and production information for July 2018 follows:
- a. There were no beginning or ending inventory balances. All expenditures were on account.
- b. Actual production and sales were 62,500 coffee mugs.
- c. Actual direct materials usage was 11,000 lbs. at an actual cost of $0.17 per lb.
- d. Actual direct labor usage was 197,000 minutes at a total cost of $25,610.
- e. Actual
overhead cost was $10,835 variable and $29,765 fixed. - f. Selling and administrative costs were $95,000.
Requirements
- 1. Compute the cost and efficiency variances for direct materials and direct labor.
- 2. Journalize the purchase and usage of direct materials and the assignment of direct labor, including the related variances.
- 3. For manufacturing overhead, compute the variable overhead cost and efficiency variances and the fixed overhead cost and volume variances.
- 4. Journalize the actual manufacturing overhead and the allocated manufacturing overhead. Journalize the movement of all production costs from Work-in-Process Inventory. Journalize the adjusting of the Manufacturing Overhead account.
- 5. Moss intentionally hired more highly skilled workers during July. How did this decision affect the cost variances? Overall, was the decision wise?
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Norris Company produces telephones. To help control costs, Norris employs a standard costing system and uses a flexible budget to predict overhead costs at various levels of activity. For the most recent year, Norris used a standard overhead rate of P18 per direct labor hour. The rate was computed using practical activity. Budgeted overhead costs are P792,000 for 36,000 direct labor hours and P1,080,000 for 60,000 direct labor hours. During the past year, Norris generated the following data:
Actual production: 100,000 units
Fixed overhead volume variance: P36,000 U
Determine variable overhead efficiency variance: P24,000 F
Actual fixed overhead costs: P380,000
Actual variable overhead costs: P620,000
REQUIRED:
Calculate the fixed overhead rate:
Determine the fixed overhead spending variance.
Determine the variable overhead spending variance.
Determine the standard hours allowed per unit of product.
Assuming the standard labor rate is P13 per hour, compute the…
Norris Company produces telephones. To help control costs, Norris employs a standard costing system and uses a flexible budget to predict overhead costs at various levels of activity. For the most recent year, Norris used a standard overhead rate of P18 per direct labor hour. The rate was computed using practical activity. Budgeted overhead costs are P792,000 for 36,000 direct labor hours and P1,080,000 for 60,000 direct labor hours. During the past year, Norris generated the following data:
Actual production: 100,000 units
Fixed overhead volume variance: P36,000 U
Determine variable overhead efficiency variance: P24,000 F
Actual fixed overhead costs: P380,000
Actual variable overhead costs: P620,000
REQUIRED:
Determine the standard hours allowed per unit of product.
Assuming the standard labor rate is P13 per hour, compute the labor efficiency variance.
Juda manufactures coffee mugs that it sells to other companies for customizing with their
own logos. Juda prepares flexible budgets and uses a standard cost system to control
manufacturing costs. The standard unit cost of a coffee mug is based on static budget
volume of 60,100 coffee mugs per month:
Actual cost and production information for July 2024 follows:
A (Click the icon to view actual cost and production information.)
Read the requirements.
E (Click the icon to view the cost data.)
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
%3D
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...
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