Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN: 9781305970663
Author: Don R. Hansen, Maryanne M. Mowen
Publisher: Cengage Learning
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Chapter 9, Problem 20E
Jameson Company produces paper towels. The company has established the following direct materials and direct labor standards for one case of paper towels:
During the first quarter of the year, Jameson produced 45,000 cases of paper towels. The company purchased and used 135,700 pounds of paper pulp at $0.38 per pound. Actual direct labor used was 91,000 hours at $12.10 per hour.
Required:
- 1. Calculate the direct materials price and usage variances.
- 2. Calculate the direct labor rate and efficiency variances.
- 3. Prepare the
journal entries for the direct materials and direct labor variances. - 4. Describe how flexible
budgeting variances relate to the direct materials and direct labor variances computed in Requirements 1 and 2.
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Huron Company produces a commercial cleaning compound known as Zoom. The direct materials and direct labor standards for one
unit of Zoom are given below:
Direct materials
Direct labor
Standard Quantity or
Hours
5.70 pounds
0.50 hours
Standard Price or Rate
$2.50 per pound
$7.50 per hour
Materials price variance
Materials quantity variance
Standard Cost
$14.25
$ 3.75
During the most recent month, the following activity was recorded:
a. Eleven thousand pounds of material were purchased at a cost of $2.40 per pound.
b. The company produced only 1,100 units, using 9,900 pounds of material. (The rest of the material purchased remained in raw
materials inventory.)
c. 650 hours of direct labor time were recorded at a total labor cost of $7,800.
Required:
Compute the materials price and quantity variances for the month. (Indicate the effect of each variance by selecting "F" for
favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive…
SW has developed the following standards for one of its products:
STANDARD VARIABLE COST CARD
ONE UNIT OF PRODUCT
Direct materials: 20 square feet
$100.00
Direct labour: $7 per hour
28.00
Variable overhead: 4 hours ´
16.00
Total standard variable cost per unit
$144.00
The company records materials price variances at the time of purchase.
The following activities relate to the month of April:
Actual Materials purchased
90,000 square feet at $6.10 per sq. foot
Actual Materials used
82,000 square feet
Actual units sold
6,000 units
Actual Units produced
4,200 units
Budgeted units
4,500 units
Actual Direct labour
15,500 hours at $6.25 per hour
Actual Variable overhead
$59,000
Required:
a. Calculate the labour efficiency variance and indicate whether it is favorable or unfavorable.
b. Calculate the variable overhead spending variance and indicate whether it is…
SW has developed the following standards for one of its products:
STANDARD VARIABLE COST CARD
ONE UNIT OF PRODUCT
Direct materials: 20 square feet
$100.00
Direct labour: $7 per hour
28.00
Variable overhead: 4 hours ´
16.00
Total standard variable cost per unit
$144.00
The company records materials price variances at the time of purchase.
The following activities relate to the month of April:
Actual Materials purchased
90,000 square feet at $6.10 per sq. foot
Actual Materials used
82,000 square feet
Actual units sold
6,000 units
Actual Units produced
4,200 units
Budgeted units
4,500 units
Actual Direct labour
15,500 hours at $6.25 per hour
Actual Variable overhead
$59,000
Required:
a. Calculate material price variance and indicate whether it is favorable or unfavorable
a. Calculate the labour efficiency variance and indicate whether it is favorable or…
Chapter 9 Solutions
Cornerstones of Cost Management (Cornerstones Series)
Ch. 9 - Discuss the difference between budgets and...Ch. 9 - What is the quantity decision? The pricing...Ch. 9 - Why is historical experience often a poor basis...Ch. 9 - Prob. 4DQCh. 9 - How does standard costing improve the control...Ch. 9 - The budget variance for variable production costs...Ch. 9 - Explain why the direct materials price variance is...Ch. 9 - The direct materials usage variance is always the...Ch. 9 - The direct labor rate variance is never...Ch. 9 - Prob. 10DQ
Ch. 9 - Prob. 11DQCh. 9 - What is the cause of an unfavorable volume...Ch. 9 - Prob. 13DQCh. 9 - Explain how the two-, three-, and four-variance...Ch. 9 - Prob. 15DQCh. 9 - Prob. 1CECh. 9 - Direct Materials Usage Variance Refer to...Ch. 9 - Refer to Cornerstone Exercise 9.1. Guillermos Oil...Ch. 9 - Kavallia Company set a standard cost for one item...Ch. 9 - Yohan Company has the following balances in its...Ch. 9 - Standish Company manufactures consumer products...Ch. 9 - Variances Refer to Cornerstone Exercise 9.6....Ch. 9 - Standish Company manufactures consumer products...Ch. 9 - Mangia Pizza Company makes frozen pizzas that are...Ch. 9 - Mangia Pizza Company makes frozen pizzas that are...Ch. 9 - Refer to Cornerstone Exercise 9.9. Required: 1....Ch. 9 - Quincy Farms is a producer of items made from farm...Ch. 9 - During the year, Dorner Company produced 280,000...Ch. 9 - Zoller Company produces a dark chocolate candy...Ch. 9 - Oerstman, Inc., uses a standard costing system and...Ch. 9 - Refer to the data in Exercise 9.15. Required: 1....Ch. 9 - Chypre, Inc., produces a cologne mist using a...Ch. 9 - Refer to Exercise 9.17. Chypre, Inc., purchased...Ch. 9 - Delano Company uses two types of direct labor for...Ch. 9 - Jameson Company produces paper towels. The company...Ch. 9 - Madison Company uses the following rule to...Ch. 9 - Laughlin, Inc., uses a standard costing system....Ch. 9 - Responsibility for the materials price variance...Ch. 9 - Which of the following is true concerning labor...Ch. 9 - A company uses a standard costing system. At the...Ch. 9 - Relevant information for direct labor is as...Ch. 9 - Which of the following is the most likely...Ch. 9 - Haversham Corporation produces dress shirts. The...Ch. 9 - Plimpton Company produces countertop ovens....Ch. 9 - Algers Company produces dry fertilizer. At the...Ch. 9 - Misterio Company uses a standard costing system....Ch. 9 - Petrillo Company produces engine parts for large...Ch. 9 - Business Specialty, Inc., manufactures two...Ch. 9 - Vet-Pro, Inc., produces a veterinary grade...Ch. 9 - Refer to the data in Problem 9.34. Vet-Pro, Inc.,...Ch. 9 - Energy Products Company produces a gasoline...Ch. 9 - Nuevo Company produces a single product. Nuevo...Ch. 9 - Ingles Company manufactures external hard drives....Ch. 9 - As part of its cost control program, Tracer...Ch. 9 - Aspen Medical Laboratory performs comprehensive...Ch. 9 - Leather Works is a family-owned maker of leather...
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