Horngren's Cost Accounting: A Managerial Emphasis (16th Edition)
16th Edition
ISBN: 9780134475585
Author: Srikant M. Datar, Madhav V. Rajan
Publisher: PEARSON
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Chapter 7, Problem 7.27E
Materials and manufacturing labor variances. Consider the following data collected for Great Homes, Inc.:
| Direct Materials | Direct Manufacturing Labor | |
| Cost incurred: Actual inputs × actual prices | $200,000 | $90,000 |
| Actual inputs × standard prices | 214,000 | 86,000 |
| Standard inputs allowed for actual output × standard prices | 225,000 | 80,000 |
Compute the price, efficiency, and flexible-
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Assume the following information (the quantity of materials purchased the quantity used):
Actual total cost of direct materials
Direct materials price variance
Standard quantity of materials allowed per unit
Standard price per pound of material
Standard rate per direct labor hour
Actual total direct labor hours
Direct labor efficiency variance
Standard number of direct labor hours allowed per unit.
Direct labor spending variance
What is the standard price (SP) per pound of materials?
$ 65,560
$ 5,960 U
3 pounds
$ 4.00
$ 5.00
6,500
$ 3,500 F
2 hours
$ 400 U
Acme Inc. has the following information available:
Actual price paid for material
$1.00
Standard price for material
$1.10
Actual quantity purchased and used in production
100
Standard quantity for units produced
130
Actual labor rate per hour
$15
Standard labor rate per hour
$17
Actual hours
200
Standard hours for units produced
230
A. Compute the material price and quantity, and the labor rate and efficiency variances. Enter all amounts as positive numbers.
Material price variance
Material quantity variance
Labor rate variance
Labor efficiency variance
Consider the following data collected for Albo's Rentals:
Direct Materials Direct Manufacturing Labor
Cost incurred:
Actual inputs x Actual prices $210,000 $95,000
Actual inputs x standard prices 214,000 88,000
Standard inputs allowed for
actual output x standard prices 220,000 85,000
Required: Compute the price and efficiency variances for direct materials:
Chapter 7 Solutions
Horngren's Cost Accounting: A Managerial Emphasis (16th Edition)
Ch. 7 - What is the relationship between management by...Ch. 7 - What are two possible sources of information a...Ch. 7 - Distinguish between a favorable variance and an...Ch. 7 - What is the key difference between a static budget...Ch. 7 - Why might managers find a flexible-budget analysis...Ch. 7 - Describe the steps in developing a flexible...Ch. 7 - List four reasons for using standard costs.Ch. 7 - How might a manager gain insight into the causes...Ch. 7 - List three causes of a favorable direct materials...Ch. 7 - Describe three reasons for an unfavorable direct...
Ch. 7 - How does variance analysis help in continuous...Ch. 7 - Why might an analyst examining variances in the...Ch. 7 - Prob. 7.13QCh. 7 - When inputs are substitutable, how can the direct...Ch. 7 - Benchmarking against other companies enables a...Ch. 7 - Metal Shelf Companys standard cost for raw...Ch. 7 - All of the following statements regarding...Ch. 7 - Amalgamated Manipulation Manufacturings (AMM)...Ch. 7 - Atlantic Company has a manufacturing facility in...Ch. 7 - Basix Inc. calculates direct manufacturing labor...Ch. 7 - Flexible budget. Sweeney Enterprises manufactures...Ch. 7 - Flexible budget. Bryant Companys budgeted prices...Ch. 7 - Flexible-budget preparation and analysis. Bank...Ch. 7 - Flexible budget, working backward. The Clarkson...Ch. 7 - Flexible-budget and sales volume variances....Ch. 7 - Price and efficiency variances. Sunshine Foods...Ch. 7 - Materials and manufacturing labor variances....Ch. 7 - Direct materials and direct manufacturing labor...Ch. 7 - Price and efficiency variances, journal entries....Ch. 7 - Materials and manufacturing labor variances,...Ch. 7 - Journal entries and T-accounts (continuation of...Ch. 7 - Price and efficiency variances, benchmarking....Ch. 7 - Static and flexible budgets, service sector....Ch. 7 - Flexible budget, direct materials, and direct...Ch. 7 - Variance analysis, nonmanufacturing setting. Joyce...Ch. 7 - Comprehensive variance analysis review. Ellis...Ch. 7 - Possible causes for price and efficiency...Ch. 7 - Material-cost variances, use of variances for...Ch. 7 - Direct manufacturing labor and direct materials...Ch. 7 - Direct materials efficiency, mix, and yield...Ch. 7 - Direct materials and manufacturing labor...Ch. 7 - Direct materials and manufacturing labor...Ch. 7 - Use of materials and manufacturing labor variances...Ch. 7 - Direct manufacturing labor variances: price,...Ch. 7 - Direct-cost and selling price variances. MicroDisk...Ch. 7 - Variances in the service sector. Derek Wilson...Ch. 7 - Prob. 7.47P
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- Mulliner Company showed the following information for the year: Required: 1. Calculate the standard direct labor hours for actual production. 2. Calculate the applied variable overhead. 3. Calculate the total variable overhead variance.arrow_forwardRath Company showed the following information for the year: Required: 1. Calculate the standard direct labor hours for actual production. 2. Calculate the applied variable overhead. 3. Calculate the total variable overhead variance.arrow_forwardThe fixed factory overhead variance is caused by the difference between which of the following? A. actual and standard allocation base B. actual and budgeted Units C. actual fixed overhead and applied fixed overhead D. actual and standard overhead ratesarrow_forward
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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