Mugg Co makes hand painted mugs exclusively for an expensive chain of retailstores. The mugs are made and painted in batches. Standards are set at thebeginning of each year and in January, the standard time and labour cost per batchof mugs were set at:Time per batch6.7 hours$24Labour cost per hour (set by head office)JuneIn June, the labour force had to learn how to paint a more complicated design due toa request from the retail chain. The first batch of mugs with the new design wasexpected to take 14.1 hours and an 85% learning curve was expected to apply forthe first eight batches, after which the learning effect would end. Each batch after theeighth batch was expected to take 8.5 hours. The budgeted production for June was1,000 batches.JulyIn July, the standard time per batch was revised to 8.5 hours and productioninformation was as follows:Budgeted production1,700 batchesActual production1,800 batchesActual labour time15,660 hoursActual labour cost$30 per hourAugustThe labour variances for August were as follows:Planning variance($)Operational variance($)Labour rate2,880 Adverse0Labour efficiency024,000 Favourable hIdentify, by clicking on the relevant boxes in the table below, whether each statement made aboutthe labour variances in August is true or false.The production manager has performedwell at controlling staff efficiency in AugustTRUEFALSEOvertime worked in August could explainthe labour efficiency operational varianceTRUEFALSEA staff pay rise for August could explain thelabour rate planning varianceTRUEFALSEOe

Variance analysis is primarily used by the managers for comparison of actual results with the…

Identify, by clicking on the relevant boxes in the table below, whether each statement made about the labour variances in August is true or false. The production manager has performed well at controlling staff efficiency in August TRUE FALSE Overtime worked in August could explain the labour efficiency operational variance TRUE FALSE A staff pay rise for August could explain the abour rate planning variance TRUE FALSE

Identify, by clicking on the relevant boxes in the table below, whether each statement made about the labour variances in August is true or false. The production manager has performed well at controlling staff efficiency in August TRUE FALSE Overtime worked in August could explain the labour efficiency operational variance TRUE FALSE A staff pay rise for August could explain the abour rate planning variance TRUE FALSE

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The May 2024 revenue and cost information for Boise Outfitters, Inc. follows: 1(Click the icon to view the revenue and cost information.) Prepare a standard cost income statement for management through gross profit. Report all standard cost variances for management's use. Has management done a good or poor job of controlling costs? Explain. (Use a minus sign or parentheses to enter any contra expenses. Enter all other amounts as positive numbers.) Boise Outfitters, Inc. Standard Cost Income Statement For the Month Ended May 31, 2024 (1) Sales Revenue $540,000 (2) Cost of Goods Sold at standard $344,000 (3) Manufacturing Cost Variances: (4) Direct Materials Cost Variance (5) Direct Materials Efficiency Variance (6) Direct Labor Cost Variance 4,800 (7) Direct Labor Efficiency Variance (8) Variable…
Select all that were the source for the Indirect Costs favorable efficiency variance. a. Actual indirect costs per direct labor hour was less than budgeted indirect cost per direct labor hour. b. Actual indirect costs per direct labor hour was greater than budgeted indirect cost per direct labor hour. c. Actual number of jobs completed was less than budgeted number of jobs. d. Actual number of jobs completed was greater than budgeted number of jobs. e. Actual number of direct labor hours per job was less than budgeted direct labor hours per job. f. Actual number of direct labor hours per job was greater than budgeted direct labor hours par job. QUESTION 5 Select all that were the source for the Sales Activity favorable variance. a. Actual number of units completed was greater than budgeted number of units. b. Actual selling price per unit was less than budgeted. c. Actual number of units completed was less than budgeted number of units. d. Actual selling price per unit was greater than…
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Select all that were the source for the Direct Labor favorable rate variance. a. Actual direct labor hours per job were less than budgeted direct labor hours per job. b. Actual direct labor cost per hour was less than budgeted direct labor cost per hour. c. Actual direct labor hours per job were greater than budgeted direct labor hours per job. d. Actual number of jobs completed was greater than budgeted number of jobs. e. Actual number of jobs completed was less than budgeted number of jobs. f. Actual direct labor cost per hour was greater than budgeted direct labor cost per hour.
The calculation of direct labour variances shows a favourable labour rate variance of £2,600 and an adverse labour efficiency variance of £3,200. Which ONE of the following sentences is the best interpretation of this result? C O A. The department has introduced new methods of working and there have been overtime payments to compensate for extra hours of working OB. A machine was not working, leading to idle time for which the employees should not be blamed C. A lower grade of employee has been employed compared with the grade used for the budget, but the employees have taken a longer time to complete the work required D. The union has negotiated higher-than-expected pay increases
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Why is the identification of favorable and unfavorable variances so important to a company? How can the identification of the variances help management control costs? Please explain. As you are considering the flexible budgeting topic of the week, it is important for you to look at this analysis as a significant contribution to the management of the company. Knowing what the bottom line profit or loss is important. But what is more important is to understand how your actual results varied in terms of units sold versus how the actual cost of each unit differed from the budget.
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I have attached the data information for the problem I need help with Part D of the problem. Further analyze harlows revised variances, isolating underlying potential casual factors. How do your analyses indicate bases for concern to management?