The material price variance is favorable when there is a cost-saving that is the actual prices are less than the standard price. The favorable variance helps in increasing the profitability of the entity. The material variances include direct material price variance and direct material quantity variance. The direct material price variance, direct material quantity variance, direct labor price variance, and direct labor quantity variance.

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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 26, Problem 5PSA

a.

To determine

Introduction: The material price variance is favorable when there is a cost-saving that is the actual prices are less than the standard price. The favorable variance helps in increasing the profitability of the entity. The material variances include direct material price variance and direct material quantity variance.

The direct material price variance, direct material quantity variance, direct labor price variance, and direct labor quantity variance.

b

To determine

Introduction: The applied overheads are the number of manufacturing overheads determined based on the standard time allowed and standard rate. Applied overheads are based on budget while the actual overheads are the overheads incurred actually.

To calculate: The overhead variance.

c

To determine

Introduction: The income statement consists of revenues, cost of goods sold based on standard costs, gross profit, variances, and net profit. The income statement is the information on revenues earned and costs incurred in addition it also indicates the variances.

To prepare: The income statement.

d

To determine

Introduction: The variance indicates the targeted cots are different from the actual costs. The variances in costs are used to determine the difference and analyze the reason for differences. The variance is used in controlling costs.

To explain: The explanation for unfavorable variance.

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Oriole Labs, Inc. provides mad cow disease testing for both state and federal governmental agricultural agencies. Because the company's customers are governmental agencies, prices are strictly regulated. Therefore, Oriole Labs must constantly monitor and control its testing costs. Shown below are the standard costs for a typical test. Direct materials (2 test tubes @ $1.80 per tube) Direct labor (1 hour @ $32 per hour) Variable overhead (1 hour @ $7.00 per hour) Fixed overhead (1 hour @ $12.00 per hour) Total standard cost per test Direct materials (2,520 test tubes) Direct labor (1,248 hours) Variable overhead Fixed overhead $4,284 38,688 7,068 $3.60 14,940 32.00 The lab does not maintain an inventory of test tubes. As a result, the tubes purchased each month are used that month. Actual activity for the month of November 2022, when 1,200 tests were conducted, resulted in the following. 7.00 12.00 $54.60 Monthly budgeted fixed overhead is $16,320. Revenues for the month were $79,200,…

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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 26, Problem 5PSA

a.

To determine

Introduction: The material price variance is favorable when there is a cost-saving that is the actual prices are less than the standard price. The favorable variance helps in increasing the profitability of the entity. The material variances include direct material price variance and direct material quantity variance.

The direct material price variance, direct material quantity variance, direct labor price variance, and direct labor quantity variance.

b

To determine

Introduction: The applied overheads are the number of manufacturing overheads determined based on the standard time allowed and standard rate. Applied overheads are based on budget while the actual overheads are the overheads incurred actually.

To calculate: The overhead variance.

c

To determine

Introduction: The income statement consists of revenues, cost of goods sold based on standard costs, gross profit, variances, and net profit. The income statement is the information on revenues earned and costs incurred in addition it also indicates the variances.

To prepare: The income statement.

d

To determine

Introduction: The variance indicates the targeted cots are different from the actual costs. The variances in costs are used to determine the difference and analyze the reason for differences. The variance is used in controlling costs.

To explain: The explanation for unfavorable variance.

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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 26, Problem 5PSA

a.

To determine

Introduction: The material price variance is favorable when there is a cost-saving that is the actual prices are less than the standard price. The favorable variance helps in increasing the profitability of the entity. The material variances include direct material price variance and direct material quantity variance.

The direct material price variance, direct material quantity variance, direct labor price variance, and direct labor quantity variance.

b

To determine

Introduction: The applied overheads are the number of manufacturing overheads determined based on the standard time allowed and standard rate. Applied overheads are based on budget while the actual overheads are the overheads incurred actually.

To calculate: The overhead variance.

c

To determine

Introduction: The income statement consists of revenues, cost of goods sold based on standard costs, gross profit, variances, and net profit. The income statement is the information on revenues earned and costs incurred in addition it also indicates the variances.

To prepare: The income statement.

d

To determine

Introduction: The variance indicates the targeted cots are different from the actual costs. The variances in costs are used to determine the difference and analyze the reason for differences. The variance is used in controlling costs.

To explain: The explanation for unfavorable variance.

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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 26, Problem 5PSA

a.

To determine

Introduction: The material price variance is favorable when there is a cost-saving that is the actual prices are less than the standard price. The favorable variance helps in increasing the profitability of the entity. The material variances include direct material price variance and direct material quantity variance.

The direct material price variance, direct material quantity variance, direct labor price variance, and direct labor quantity variance.

b

To determine

Introduction: The applied overheads are the number of manufacturing overheads determined based on the standard time allowed and standard rate. Applied overheads are based on budget while the actual overheads are the overheads incurred actually.

To calculate: The overhead variance.

c

To determine

Introduction: The income statement consists of revenues, cost of goods sold based on standard costs, gross profit, variances, and net profit. The income statement is the information on revenues earned and costs incurred in addition it also indicates the variances.

To prepare: The income statement.

d

To determine

Introduction: The variance indicates the targeted cots are different from the actual costs. The variances in costs are used to determine the difference and analyze the reason for differences. The variance is used in controlling costs.

To explain: The explanation for unfavorable variance.

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Answer 5

Chapter 26, Problem 5PSA

a.

To determine

Introduction: The material price variance is favorable when there is a cost-saving that is the actual prices are less than the standard price. The favorable variance helps in increasing the profitability of the entity. The material variances include direct material price variance and direct material quantity variance.

The direct material price variance, direct material quantity variance, direct labor price variance, and direct labor quantity variance.

b

To determine

Introduction: The applied overheads are the number of manufacturing overheads determined based on the standard time allowed and standard rate. Applied overheads are based on budget while the actual overheads are the overheads incurred actually.

To calculate: The overhead variance.

c

To determine

Introduction: The income statement consists of revenues, cost of goods sold based on standard costs, gross profit, variances, and net profit. The income statement is the information on revenues earned and costs incurred in addition it also indicates the variances.

To prepare: The income statement.

d

To determine

Introduction: The variance indicates the targeted cots are different from the actual costs. The variances in costs are used to determine the difference and analyze the reason for differences. The variance is used in controlling costs.

To explain: The explanation for unfavorable variance.

Answer 6

Chapter 26, Problem 5PSA

a.

To determine

Introduction: The material price variance is favorable when there is a cost-saving that is the actual prices are less than the standard price. The favorable variance helps in increasing the profitability of the entity. The material variances include direct material price variance and direct material quantity variance.

The direct material price variance, direct material quantity variance, direct labor price variance, and direct labor quantity variance.

Answer 7

Chapter 26, Problem 5PSA

a.

To determine

Introduction: The material price variance is favorable when there is a cost-saving that is the actual prices are less than the standard price. The favorable variance helps in increasing the profitability of the entity. The material variances include direct material price variance and direct material quantity variance.

The direct material price variance, direct material quantity variance, direct labor price variance, and direct labor quantity variance.

Answer 8

b

To determine

Introduction: The applied overheads are the number of manufacturing overheads determined based on the standard time allowed and standard rate. Applied overheads are based on budget while the actual overheads are the overheads incurred actually.

To calculate: The overhead variance.

Answer 9

b

To determine

Introduction: The applied overheads are the number of manufacturing overheads determined based on the standard time allowed and standard rate. Applied overheads are based on budget while the actual overheads are the overheads incurred actually.

To calculate: The overhead variance.

Answer 10

c

To determine

Introduction: The income statement consists of revenues, cost of goods sold based on standard costs, gross profit, variances, and net profit. The income statement is the information on revenues earned and costs incurred in addition it also indicates the variances.

To prepare: The income statement.

Answer 11

c

To determine

Introduction: The income statement consists of revenues, cost of goods sold based on standard costs, gross profit, variances, and net profit. The income statement is the information on revenues earned and costs incurred in addition it also indicates the variances.

To prepare: The income statement.

Answer 12

d

To determine

Introduction: The variance indicates the targeted cots are different from the actual costs. The variances in costs are used to determine the difference and analyze the reason for differences. The variance is used in controlling costs.

To explain: The explanation for unfavorable variance.

Answer 13

d

To determine

Introduction: The variance indicates the targeted cots are different from the actual costs. The variances in costs are used to determine the difference and analyze the reason for differences. The variance is used in controlling costs.

To explain: The explanation for unfavorable variance.

Answer 14

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Answer 15

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Answer 16

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Answer 17

Ch. 26 - Prob. 1Q Ch. 26 - 2. (a) Explain the similarities and differences...Ch. 26 - Prob. 3Q Ch. 26 - Prob. 4Q Ch. 26 - Prob. 5Q Ch. 26 - Prob. 6Q Ch. 26 - Prob. 7Q Ch. 26 - Prob. 8Q Ch. 26 - Prob. 9Q Ch. 26 - Prob. 10Q

Solution Summary: The author explains that the material price variance is favorable when there is a cost-saving that is the actual prices are less than the standard price.

Videos

Introduction: The applied overheads are the number of manufacturing overheads determined based on the standard time allowed and standard rate. Applied overheads are based on budget while the actual overheads are the overheads incurred actually.

To calculate: The overhead variance.

Introduction: The income statement consists of revenues, cost of goods sold based on standard costs, gross profit, variances, and net profit. The income statement is the information on revenues earned and costs incurred in addition it also indicates the variances.

To prepare: The income statement.

Introduction: The variance indicates the targeted cots are different from the actual costs. The variances in costs are used to determine the difference and analyze the reason for differences. The variance is used in controlling costs.

To explain: The explanation for unfavorable variance.

Want to see the full answer?

Chapter 26 Solutions

Solution Summary: The author explains that the material price variance is favorable when there is a cost-saving that is the actual prices are less than the standard price.

Videos

Introduction: The applied overheads are the number of manufacturing overheads determined based on the standard time allowed and standard rate. Applied overheads are based on budget while the actual overheads are the overheads incurred actually. To calculate: The overhead variance.

Introduction: The income statement consists of revenues, cost of goods sold based on standard costs, gross profit, variances, and net profit. The income statement is the information on revenues earned and costs incurred in addition it also indicates the variances. To prepare: The income statement.

Introduction: The variance indicates the targeted cots are different from the actual costs. The variances in costs are used to determine the difference and analyze the reason for differences. The variance is used in controlling costs. To explain: The explanation for unfavorable variance.

Want to see the full answer?

Chapter 26 Solutions

Introduction: The applied overheads are the number of manufacturing overheads determined based on the standard time allowed and standard rate. Applied overheads are based on budget while the actual overheads are the overheads incurred actually.

To calculate: The overhead variance.

Introduction: The income statement consists of revenues, cost of goods sold based on standard costs, gross profit, variances, and net profit. The income statement is the information on revenues earned and costs incurred in addition it also indicates the variances.

To prepare: The income statement.

Introduction: The variance indicates the targeted cots are different from the actual costs. The variances in costs are used to determine the difference and analyze the reason for differences. The variance is used in controlling costs.

To explain: The explanation for unfavorable variance.