Horngren's Accounting (12th Edition)
12th Edition
ISBN: 9780134486444
Author: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura
Publisher: PEARSON
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Textbook Question
Chapter 23, Problem S23.10SE
Computing
Learning Objective 4
Refer to the Morgan, Inc. data in Short Exercise S23-9. Last month, Morgan reported the following actual results: actual variable overhead, $10,800; actual fixed overhead, $2,770; actual production of 7,000 units at 0.20 direct labor hours per unit. The standard direct labor time is 0.25 direct labor hours per unit (1,300 static direct labor hours/5,200 static units).
Requirements
1. Compute the overhead variances for the month: variable overhead cost variance, variable overhead efficiency variance, fixed overhead cost variance, and fixed overhead volume variance.
2. Explain why the variances are favorable or unfavorable.
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Knowledge Check
Overhead information for Wilts Company is presented.
· Actual fixed overhead, $9,150
. Actual variable overhead, $5,590
Budgeted fixed overhead, $9,300
Variable overhead rate, $0.90
Fixed overhead rate, $1.50
Normal capacity hours, 6,200
Standard hours allowed, 6,100
Determine the overhead controllable and the overhead volume variances. Indicate whether they are favorable or
unfavorable.
Overhead controllable variance
Overhead volume variance
$
4. Learning Curve
A particular manufacturing job is subject to an estimated 80% learning or experience curve. The first unit
required 20 labor hours to complete.
REQUIRED:
A) What is the cumulative average time per unit after four (4) units are completed?
B) How many hours are required to produce a total of two (2) units?
C)
How many hours are required to produce the second unit?
D) Which of the following unfavorable variances would be directly affected by the relative position of a
production process on the learning curve?
a. Material price
b. Material usage
C.
Labor rate
d. Labor efficiency
Required A Required B
What was budgeted production for the month?
Budgeted production
units
Chapter 23 Solutions
Horngren's Accounting (12th Edition)
Ch. 23 - Prob. 1QCCh. 23 - MajorNet Systems is a start-up company that makes...Ch. 23 - MajorNet Systems is a start-up company that makes...Ch. 23 - MajorNet Systems is a start-up company that makes...Ch. 23 - MajorNet Systems has budgeted three hours of...Ch. 23 - MajorNet Systems has budgeted three hours of...Ch. 23 - FrontGrade Systems allocates manufacturing...Ch. 23 - FrontGrade Systems allocates manufacturing...Ch. 23 - FrontGrade Systems allocates manufacturing...Ch. 23 - The person probably most responsible for the...
Ch. 23 - HajorNet System’s static budget predicted...Ch. 23 - What is a variance?Ch. 23 - Explain the difference between a favorable and an...Ch. 23 - What is a static budget performance report?Ch. 23 - How do flexible budgets differ from static...Ch. 23 - How is a flexible budget used?Ch. 23 - What are the two components of the static budget...Ch. 23 - What is a flexible budget performance report?Ch. 23 - What is a standard cost system?Ch. 23 - Explain the difference between a cost standard and...Ch. 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 - List the direct labor variances, and briefly...Ch. 23 - List the variable overhead variances, and briefly...Ch. 23 - List the fixed overhead variances, and briefly...Ch. 23 - How is the fixed overhead volume variance...Ch. 23 - What is management by exception?Ch. 23 - List the eight product variances and the manager...Ch. 23 - Briefly describe how journal entries differ in a...Ch. 23 - What is a standard cost income statement?Ch. 23 - Matching terms Learning Objective 1 Match each...Ch. 23 - Preparing flexible budgets Learning Objective 1...Ch. 23 - Calculating flexible budget variances Learning...Ch. 23 - Matching terms Learning Objective 2 Match each...Ch. 23 - Identifying the benefits of standard costs...Ch. 23 - Calculating materials variances Learning Objective...Ch. 23 - Calculating labor variances Learning Objective 3...Ch. 23 - Interpreting material and labor variances Learning...Ch. 23 - Computing standard overhead allocation rates...Ch. 23 - Computing overhead variances Learning Objective 4...Ch. 23 - Understanding variance relationships Learning...Ch. 23 - Journalizing materials entries Learning Objectives...Ch. 23 - Journalizing labor entries Learning Objectives 6...Ch. 23 - Preparing a standard cost income statement...Ch. 23 - Preparing a flexible budget Learning Objective 1...Ch. 23 - Preparing a flexible budget performance report...Ch. 23 - Preparing a flexible budget performance report...Ch. 23 - Defining the benefits of setting cost standards...Ch. 23 - Calculating materials and labor variances Learning...Ch. 23 - Computing overhead variances Learning Objective 4...Ch. 23 - Calculating overhead variances Learning Objective...Ch. 23 - Preparing a standard cost income statement...Ch. 23 - Preparing journal entries Learning Objective 6 MOH...Ch. 23 - Preparing a standard cost income statement...Ch. 23 - Preparing a flexible budget performance report...Ch. 23 - Preparing a flexible budget computing standard...Ch. 23 - Computing standard cost variances and reporting to...Ch. 23 - Computing and journalizing standard cost variances...Ch. 23 - Prob. P23.29APGACh. 23 - Preparing a flexible budget performance report...Ch. 23 - Preparing a flexible budget and computing standard...Ch. 23 - Prob. P23.32BPGBCh. 23 - Prob. P23.33BPGBCh. 23 - Preparing a standard cost income statement...Ch. 23 - Prob. P23.35CTCh. 23 - Preparing a flexible budget and performance report...Ch. 23 - Prob. 23.1TIATCCh. 23 - Decision Case 23-1 Suppose you manage the local...Ch. 23 - Fraud Case 23-1 Drew Castello, general manager of...
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What is variance analysis?; Author: Corporate finance institute;https://www.youtube.com/watch?v=SMTa1lZu7Qw;License: Standard YouTube License, CC-BY