Chapter 10 Performance Evaluation Using Variance EX 10-11 Direct materials and direct labor variances At the beginning of june, Faiz Mainan Sdn Bhd budgeted 5,000 toy factured in June at standard direct materials and direct labor costs a Direct materials RM50,000 Direct labor 36,000 RM86,000 Total The standard materials price is RM4.00 per pound. The star RM18.00 per hour. At the end of June, the actual direct materia were as follows: Actual direct materials RM49,600 Actual direct labor 34,020 Total RM83,620 There were no direct materials price or direct labor rate variances fo no changes in the direct materials inventory balances in June. Faiz M actually produced 4,850 units during June. Determine the direct materials quantity and direct labor time varia

Q: How does the planning of fixed overhead costs differ from the planning of variable overhead costs?

A: Variable cost: The cost which fluctuates on the basis of the output level produced. The variable…

Q: How is the predetermined overhead allocation rate determined?

A: Predetermined overhead allocation rate: Predetermined overhead refers to the allocation rate that is…

Q: Which do you think is more important for controlling fixed overhead costs: the spending variance or…

A: (This is not a subjective matter of opinion but rather is based on accounting principles and theory…

Q: What is the overall variance in overhead?

A: Overhead refers to secondary expenditures spent during the manufacturing and distribution of…

Q: How do you get total of period cost?

A: Period Costs are not directly associated with the finished products manufactured, rather associated…

Q: What is the standard variable overhead rate and standard fixed overhead rate?

A: The overhead rate is calculated by dividing total indirect costs (also known as overhead) for a…

Q: Explain direct labour efficiency variance.

A: Variance: Variance refers to the difference level in the actual cost incurred and standard cost. The…

Q: Define direct material variance.

A: Variance:   Variance refers to the difference level in the actual cost incurred and standard cost.…

Q: Explain and describe the overhead variance.

A: Variance means when the actual cost does not match with the estimated costs. To compute the…

Q: Define fixed overhead variance.

A: Fixed Overhead Variance is the difference between actual and absorbed fixed production overheads…

Q: Which factors contribute to the cost of direct labor?

A: Direct labour refers to the labour which is directly related to the production of products of any…

Q: What does period cost include

A: Period costs are the expenses which are typically related to passage of time and not to any…

Q: criticly identify the possible causes of labour and material variance

A: Labour Variances: 1. Unskilled or inefficient workers. 2. Unfavourable wage rates. 3. Unexpected…

Q: what are the possible causes of favourable Labour efficiency variance

A: The capacity to employ labor in a manner that is consistent with expectations is what the labor…

Q: What Is load percent?

A: Load Percent: It is the percentage of load at which the system is operating. The total load is given…

Q: s relevent cost of direct labour

A: Direct Labor: Direct labor includes personnel that are directly concerned within the production…

Q: How do I calculate the overhead allocations?

A: Cost allocation: Cost allocation is a process of assigning or allocating indirect costs to each and…

Q: is direct material variance a measure of?

A: Direct material variance is the difference between standard material costs and actual material costs…

Q: Use the adjusted trial balance for Stockton Company to answer the question that follows. Stockton…

A:

Variance Analysis

In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance. 

Standard Costing

The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.