Horngren's Accounting (12th Edition)
12th Edition
ISBN: 9780134486444
Author: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Concept explainers
Textbook Question
Chapter 23, Problem S23.6SE
Calculating materials variances
Learning Objective 3
Martin, Inc. is a manufacturer of lead crystal glasses. The standard direct materials quantity is 1.0 pound per glass at a cost of $0.50 per pound. The actual result for one month’s production of 6,500 glasses was 1.2 pounds per glass, at a cost of $0.30 per pound. Calculate the direct materials cost variance and the direct materials efficiency variance.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
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
eBook
Show Me How Video
Direct Materials Variances
The following data relate to the direct materials cost for the production of 2,300 automobile tires:
Actual
51,700 lbs. at $1.70
$87,890
Standard
50,700 lbs. at $1.75
$88,725
a. Determine the direct materials price variance, direct materials quantity variance, and total direct materials cost variance. Enter favorable variances as negative numbers. Enter unfavorable variances as positive numbers.
Price variance
$fill in the blank 1
Quantity variance
fill in the blank 3
Total direct materials cost variance
$fill in the blank 5
Calculating materials variances
Martin, Inc. is a manufacturer of lead crystal glasses. The standard direct materials quantity is 1.0 pound per glass at a cost of $0.50 per pound. The actual result for one month’s production of 6,500 glasses was 1.2 pounds per glass, at a cost of $0.30 per pound. Calculate the direct materials cost variance and the direct materials efficiency variance.
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...
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
- eBook Show Me How Print Item Direct Materials Variances The following data relate to the direct materials cost for the production of 1,800 automobile tires: Actual: 53,600 lb. at $2.00 Standard: 52,500 lb. at $2.05 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 a minus sign and an unfavorable variance as a positive number. Price variance $fill in the blank 1 Quantity variance $fill in the blank 3 Total direct materials cost variance $fill in the blank 5 b. The direct materials price variance should normally be reported to the . If lower amounts of direct materials had been used because of production efficiencies, the variance would be reported to the . If the favorable use of raw materials had been caused by the purchase of higher-quality raw materials, the variance should be reported to thearrow_forwardII. SALES VARIANCE ANALYSIS The Furniluxe manufactures two types of study desk: one for the residential market, and the other for the school market. Budgeted and actual operating data for the year 2022 are: Static Budget Number of desk sold Contribution margin Residential School 390,000 $39,000,000 210,000 $16,800,000 Total 600,000 $55,800,000 School Total 580,000 $48,720,000 Actual Results Residential Number of desk sold Contribution margin 232,000 348,000 $20,880,000 $27,840,000 The Furnilixe prepared the budget for 2022 assuming a 15% market share based on total desk sales in the region. The total desk market was estimated to reach sales of 4,000,000 desks. However, actual total sales volume was 3,625,000 desks. Required: Compute the following variances in terms of contribution margin: 1. Compute the total sales-volume variance. (3%) 2. Compute the sales-mix variance and the sales-quantity variance by type of desk. (7%) 3. Compute the market share variance and the market size…arrow_forwardUsing the format dicaksed in Exthbit 21.10 and Exhibit 21.11 of your textbook or formulas solve for the following variance. You may use EXCEL WORD. Picture of Paper, or enter your work into Camvas. I will cover how to do this during the Zoom recorded lecture for that week or during a recording Standard Quantities and Costs: DM (.25 it per unit at $10 per foot)=$2.50 DL(5hour per unit at 520 per hour)=$10.00Total Dirsct Cost per unit=$12.50 Additional information: During the period, MK, Inc, badgeted to produce 2.000 widgets, it actually produced 1.900 widgets. K Actual Quantibes, and Costs: DM purchased & used = 505 feet at $9.80Dthours used +990 hours at $19.75 Required: Calculate the following variances using the matrix format mentioned above or formulas: -Price Variance - Quantity Variancer - Total DM Vanance - Rate Variarice - Eificiency Variance - Total DL Variancearrow_forward
- Calculating labor variances Martin, Inc. manufactures lead crystal glasses. The standard direct labor time is 0.5 hours per glass, at a cost of $18 per hour. The actual results for one month’s production of 6,500 glasses were 0.2 hours per glass, at a cost of $11 per hour. Calculate the direct labor cost variance and the direct labor efficiency variance.arrow_forwardUse the information provided to answer the questions. Actual Price Paid Per Pound of Material: $14.50 Total Standard Pounds for Units Produced This Period 12,500 Pounds of Material Used 13,250 Direct Material Price Variance Favorable $4,637.50 All material purchased was used in production. A. What is the standard price for materials? B. What is the direct materials quantity variance? C. What is the total direct materials cost variance? D. If the direct materials price variance was unfavorable, what would be the standard price?arrow_forwardThe Gourmand Cooking School runs short cooking courses at its small campus. Management has identified two cost drivers it uses in its budgeting and performance reports-the number of courses and the total number of students. For example, the school might run two courses in a month and have a total of 62 students enrolled in those two courses. Data concerning the company's cost formulas appear below Instructor wages Classroom supplies utilities Campus rent Insurance Administrative expenses Fixed Cost Cost per per Month Revenue Instructor wages Classroom supplies Utilities Campus rent Insurance Administrative expenses $1,240 5 75 $5,000 $2,200 $3,600 $ 44 Courses Course $ 2,950 For example, administrative expenses should be $3,600 per month plus $44 per course plus $6 per student. The company's sales should average $890 per student The company planned to run four courses with a total of 62 students, however, it actually ran four courses with a total of only 58 students. The actual…arrow_forward
- Use the following standard cost card for 1 gallon of ice cream to answer the questions. Actual direct costs incurred to make 50 gallons of ice cream: 275 quarts of cream at $1.05 per quart 832 ounces of sugar at $0.075 per ounce 165 minutes of labor at $37 per hour All material used was bought during the current period. A. Compute the material and labor variances. B. Comment on the results and possible causes of the variances.arrow_forwardFlexible Budgets, Direct-Cost Variances, and Management Control Question 2 a. Using an example, explain the concept of a flexible budget, flexible budget variances and sales volume variances. 2b. Hasan Table Company manufactures tables for schools. The 2018 operating budget is based on sales of 45,000 units at 55 Taka per table. Operating income is anticipated to be 240,000 Taka. Budgeted variable costs are 35 Taka per unit, while fixed costs total 660,000 Taka. Actual income for 2018 was a surprising 569,000 Taka on actual sales of 46,000 units at 60 Taka each. Actual variable costs were 34 Taka per unit and fixed costs totaled 627,000 Taka. Required: Prepare a variance analysis report with both flexible-budget and sales-volume variances.arrow_forwardProblem 2 (Comprehensive Variance Analysis; Journal Entries) Moda Mills, Inc., is a large producer of men's and women's clothing. The company uses standard costs for all of its products. The standard costs and actual costs for a recent period are given below for one of the company's product lines (per unit of product): Standard Cost Actual Cost Direct materials: Standard: 4.0 yards at P3.60 per yard... Actual: 4.4 yards at P3..35 per yard... P14.40 P14.74 Direct labor: Standard: 1.6 hours at P4.50 per hour.. Actual: 1.4 hours at P4.85 per Variable manufacturing overhead: Standard: 1.6 hours at P1.80 per hour..... Actual: 1.4 hours at P2.15 per Total cost per unit...... 7.20 hour.. 6.79 2.88 hour .. 3.01 P24.54 P24.48arrow_forward
- Question Content Area Ruby Company produces a chair that requires a standard 3 yards of material per unit. The standard price of one yard of material is $9.90. During the month, 6,700 chairs were manufactured, using 20,500 yards at a cost of $9.40 per yard. Determine the (a) direct materials price variance, (b) direct materials quantity variance, and (c) total direct materials cost variance. Enter favorable variances as negative numbers.arrow_forwardBudgeted production of product P = 200 units. Standard consumption of Raw materials = 2 kg. per unit of P. Standard price of material A = 6 per kg. Actually, 250 units of P were produced and material A was purchased at 8 per kg and consumed at 1.8 kg per unit of P. Calculate the Total Material Cost Variances and price variance.arrow_forwardLearning Curve Sharon Glessing, controller for Janson Company, has noticed that the company faces a 80 percent learning rate for its specialty design line. In planning the cost of the latest design, Sharon assumed that the first set of units would take 1,200 direct labor hours. She decided to use this information in budgeting for the cost of the total project, which would involve the manufacture of 16 sets. Direct labor is paid $40 per hour. Required: 1. Complete the table below showing results by row for total production of: one unit, two units, four units, eight units, and sixteen units. (Round hour answers to two significant digits.) (Round Cumulative Total Time answers to the nearest whole number.) Cumulative Number of Units Cumulative Average Time per Unit in Hours 1,200 ✓ 960 ✓ 768 ✔ 614.4 ✔ 492 X 2. What is the total labor cost if Janson Company makes eight sets? Sixteen sets? (Use the rounded answers in the subsequent computations). Total labor cost for eight sets Total labor…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Principles of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax College
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