Becton Labs, Inc., produces varlous chemical compounds for Industrial use. One compound, called Fludex, Is prepared using an elaborate distilling process. The company has developed standard costs for one unit of Fludex, as follows: Standard Quantity or Hours Standard Price Standard or Rate $27.00 per ounce Cost Direct materials 2.40 ounces $ 64.80 Direct labor 0.60 hourS $12.00 per hour 7.20 Variable manufacturing overhead 0.60 hours $ 3.50 per hour 2.10 Total standard cost per unit $ 74.10 During November, the following activity was recorded related to the production of Fludex: a. Materlals purchased, 13,000 ounces at a cost of $330,200. b. There was no beginning Inventory of materlals; however, at the end of the month, 2,850 ounces of materlal remalned In ending Inventory. C. The company employs 20 lab techniclans to work on the production of Fludex. During November, they each worked an average of 160 hours at an average pay rate of $11.00 per hour. d. Varlable manufacturing overhead Is assigned to Fludex on the basls of direct labor-hours. Varlable manufacturing overhead costs during November totaled $6,000. e. During November, the company produced 4,200 units of Fludex. Requlred: 1. For direct materlals: a. Compute the price and quantity varlances. b. The materlals were purchased from a new supplier who Is anxious to enter Into a long-term purchase contract. Would you recommend that the company sign the contract? 2 For direct labor. a. Compute the rate and efficlency varlances. b. In the past, the 20 techniclans employed In the production of Fludex consisted of 7 senlor techniclans and 13 assistants. During November, the company experimented with fewer senlor techniclans and more assistants In order to reduce labor costs. Would you recommend that the new labor mix be continued? 3. Compute the varlable overhead rate and efficlency varlances. Complete this question by entering your answers in the tabs below. Req 1A Req 18 Req 2A Req 28 Req 3 Compute the variable overhead rate and efficiency variances. (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 values.) Variable overhead rate variance Variable overhead efficiency
The Effect Of Prepaid Taxes On Assets And Liabilities
Many businesses estimate tax liability and make payments throughout the year (often quarterly). When a company overestimates its tax liability, this results in the business paying a prepaid tax. Prepaid taxes will be reversed within one year but can result in prepaid assets and liabilities.
Final Accounts
Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded.
Ledger Posting
A ledger is an account that provides information on all the transactions that have taken place during a particular period. It is also known as General Ledger. For example, your bank account statement is a general ledger that gives information about the amount paid/debited or received/ credited from your bank account over some time.
Trial Balance and Final Accounts
In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately recorded or not. Trial balance helps in this. Trial balance helps to check the accuracy of posting the ledger accounts. It helps the accountant to assist in preparing final accounts. It also helps the accountant to check whether all the debits and credits of items are recorded and posted accurately. Like in a balance sheet debit and credit side should be equal, similarly in trial balance debit balance and credit balance should tally.
Adjustment Entries
At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. It is also known as end of period adjustment. It can also be referred as financial reporting that corrects the errors made previously in the accounting period. The basic characteristics of every adjustment entry is that it affects at least one real account and one nominal account.
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