Horngren's Cost Accounting: A Managerial Emphasis (16th Edition)
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 7.29E

Price and efficiency variances, journal entries. The Schuyler Corporation manufactures lamps. It has set up the following standards per finished unit for direct materials and direct manufacturing labor:

Direct materials: 10 lb. at $4.50 per lb. $45.00
Direct manufacturing labor: 0.5 hour at $30 per hour 15.00

The number of finished units budgeted for January 2017 was 10,000; 9,850 units were actually produced. Actual results in January 2017 were as follows:

Direct materials: 98,055 lb. used  
Direct manufacturing labor: 4,900 hours $154,350

Assume that there was no beginning inventory of either direct materials or finished units.

During the month, materials purchased amounted to 100,000 lb., at a total cost of $465,000. Input price variances are isolated upon purchase. Input-efficiency variances are isolated at the time of usage.

  1. 1. Compute the January 2017 price and efficiency variances of direct materials and direct manufacturing labor.
  2. 2. Prepare journal entries to record the variances in requirement 1.
  3. 3. Comment on the January 2017 price and efficiency variances of Schuyler Corporation.
  4. 4. Why might Schuyler calculate direct materials price variances and direct materials efficiency variances with reference to different points in time?
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The Schuyler Corporation manufactures lamps. It has set up the following standards per finished unit for direct materials and direct manufacturing labor: Direct materials: 10 lb. at $4.50 per lb. $45.00 Direct manufacturing labor: 0.5 hour at $30 per hour 15.00 The number of finished units budgeted for January 2017 was 10,000; 9,850 units were actually produced. Actual results in January 2017 were as follows: Direct materials: 98,055 lb. used Direct manufacturing labor: 4,900 hours $154,350 Assume that there was no beginning inventory of either direct materials or finished units. During the month, materials purchased amounted to 100,000 lb., at a total cost of $465,000. Input price variances are isolated upon purchase. Input-efficiency variances are isolated at the time of usage. Q1Why might Schuyler calculate direct materials price variances and direct materials efficiency variances with reference to different points in time?
The Schuyler Corporation manufactures lamps. It has set up the following standards per finished unit for direct materials and direct manufacturing labor: Direct materials: 10 lb. at $4.50 per lb. $45.00 Direct manufacturing labor: 0.5 hour at $30 per hour 15.00 The number of finished units budgeted for January 2017 was 10,000; 9,850 units were actually produced. Actual results in January 2017 were as follows: Direct materials: 98,055 lb. used Direct manufacturing labor: 4,900 hours $154,350 Assume that there was no beginning inventory of either direct materials or finished units. During the month, materials purchased amounted to 100,000 lb., at a total cost of $465,000. Input price variances are isolated upon purchase. Input-efficiency variances are isolated at the time of usage. Q1Comment on the January 2017 price and efficiency variances of Schuyler Corporation.
The Schuyler Corporation manufactures lamps. It has set up the following standards per finished unit for direct materials and direct manufacturing labor: Direct materials: 10 lb. at $4.50 per lb. $45.00 Direct manufacturing labor: 0.5 hour at $30 per hour 15.00 The number of finished units budgeted for January 2017 was 10,000; 9,850 units were actually produced. Actual results in January 2017 were as follows: Direct materials: 98,055 lb. used Direct manufacturing labor: 4,900 hours $154,350 Assume that there was no beginning inventory of either direct materials or finished units. During the month, materials purchased amounted to 100,000 lb., at a total cost of $465,000. Input price variances are isolated upon purchase. Input-efficiency variances are isolated at the time of usage. Q1.Compute the January 2017 price and efficiency variances of direct materials and direct manufacturing labor. Q2. Prepare journal entries to record the variances in requirement 1.

Chapter 7 Solutions

Horngren's Cost Accounting: A Managerial Emphasis (16th Edition)

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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