Cost Accounting (15th Edition)
Cost Accounting (15th Edition)
15th Edition
ISBN: 9780133428704
Author: Charles T. Horngren, Srikant M. Datar, Madhav V. Rajan
Publisher: PEARSON
Question
Book Icon
Chapter 8, Problem 8.28E
To determine

Variance Analysis:

Variance analysis is the process of ascertaining the deviations between actual and planned output.

Favorable Variance:

A circumstance that happens when a foreseen cost is higher than its real cost, or when expected income is lower than real income

Unfavorable variance:

Unfavorable variance is the difference between the actual and planned output which is harmful for the company like actual cost incurred is more than the standard or planned cost or the revenue is less than the planned revenue.

Direct Material Price Variance:

Direct material price variance in the difference between the budgeted per unit cost of raw material and the actual per unit cost multiplied by the number of units purchased.

Direct Material Efficiency Variance:

Direct material efficiency variance is the difference between the budgeted quantities and the actual quantities purchased at a specific price.

Material Price Variance:

Material price variance is the difference between the budgeted and the actual purchase price of the material purchased. It is calculated to ascertain the efficiency of the purchase department.

To determine:  For each independent scenario indicate whether each of the manufacturing variances will be favorable or unfavorable or CBD (cannot be determined).

Blurred answer
Knowledge Booster
Background pattern image
Recommended textbooks for you
Text book image
FINANCIAL ACCOUNTING
Accounting
ISBN:9781259964947
Author:Libby
Publisher:MCG
Text book image
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Text book image
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Text book image
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Text book image
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Text book image
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education