It was the end of the third quarter for Marigold Industries. There had been some discussion in prior quarters about best practicesrelated to carrying ending inventory of its key DM, acetic acid, for making vinegar. Per established standards, 7.1 ounces of acetic acidat a budgeted price of $0.30 per ounce were needed for each gallon of vinegar (128 ounces). The new production manager wants tofollow lean practices and buy only what is needed for production, while the former production manager preferred to keep someinventory on hand for emergencies. For the third quarter, 316,800 ounces of acetic acid were purchased on account and used to make44,000 gallons of vinegar. The purchase price was $88,704.(a1)Your answer is correct.Determine the DM price and efficiency variances for the third quarter based on the information above.DM price varianceDM efficiency variance $eTextbook and MediaList of Accounts6336Attempts: 1 of 3 used Record the journal entries for the purchase and use of DM under standard costing. (Credit account titles are automatically indentedwhen amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for theamounts. List all debit entries before credit entries)Account Titles and ExplanationDM InventoryDM Price VarianceAccounts Payable(To record purchase of DM)WIP InventoryDM Efficiency VarlanceDM Inventory(To record use of DM)eTextbook and MediaList of AccountsDM Inventory balance $Debit95040]]]per bunde93720Credit63368870495040Assistance UsedContinuing with the detalls in part (a), assume there was a zero balance in the DM Inventory account to start the third quarter.What would the DM Inventory balance be at the end of the quarter? How much did Marigold Industries pay per ounce for theBestic acid? (Round amount per ounce to 2 decimal places, eg. 15.25.)Attempts: 1 of 3 used

Direct material price variance is a variance between the rate at which material should be purchased against the rate at which it is purchased. Direct material price variance = (Standard rate per unit - Actual rate per unit) x Actual quantity purchased Direct material efficiency variance is a variance between the quantity that should be used for production against the actual quantity used. Direct material efficiency variance = (Standard quantity for production - Actual quantity used) * Standard rate per unit Material price variance = ($0.3 - ($88,704/316,800)) x 316,800 = ($0.3 - $0.28) x 316,800 = $6,336 (Favorable) Material efficiency variance = ((7.1 x 44,000) - 316,800) x $0.3 = $1,320 (Unfavorable)Journal entries : Sl no Account title Debit ($) Credit ($) 1 Direct Materials (316,800×$0.30) Dr 95,040 To Direct Material Price Variance 6,336 To Accounts Payable (actual cost of purchase) 88,704 (To record purchase of Direct material) 2 Work in process (7.1×44,000×$0.30) Dr 93,720 Material Quantity Variance 1,320 To Direct material 95,040 (To record use of Direct material)

Business

Accounting

It was the end of the third quarter for Marigold Industries. There had been some discussion in prior quarters about best practices related to carrying ending inventory of its key DM, acetic acid, for making vinegar. Per established standards, 7.1 ounces of acetic acid at a budgeted price of $0.30 per ounce were needed for each gallon of vinegar (128 ounces). The new production manager wants to follow lean practices and buy only what is needed for production, while the former production manager preferred to keep some inventory on hand for emergencies. For the third quarter, 316,800 ounces of acetic acid were purchased on account and used to make 44,000 gallons of vinegar. The purchase price was $88,704. (a1) Your answer is correct. Determine the DM price and efficiency variances for the third quarter based on the information above. DM price variance DM efficiency variance 6336 1320 Favorable Unfavorable

It was the end of the third quarter for Marigold Industries. There had been some discussion in prior quarters about best practices related to carrying ending inventory of its key DM, acetic acid, for making vinegar. Per established standards, 7.1 ounces of acetic acid at a budgeted price of $0.30 per ounce were needed for each gallon of vinegar (128 ounces). The new production manager wants to follow lean practices and buy only what is needed for production, while the former production manager preferred to keep some inventory on hand for emergencies. For the third quarter, 316,800 ounces of acetic acid were purchased on account and used to make 44,000 gallons of vinegar. The purchase price was $88,704. (a1) Your answer is correct. Determine the DM price and efficiency variances for the third quarter based on the information above. DM price variance DM efficiency variance 6336 1320 Favorable Unfavorable

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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Burke's Corner currently selis blue jeans and T-shirts. Management is considering adding fleece tops to its inventory to provide a cooler weather option. The tops would sell for 547 each with expected sales of 3, 500 tops annually. By adding the fleece tops, management feels the firm will sell an additional 205 pairs of jeans at 557 a pair and 340 fewer T-shirts at $18 each. The variable cost per unit is $25 on the jeans, $9 on the T-shirts, and $21 on the fleece tops. With the new item, the depreciation expense is $27,000 a year and the fixed costs are $62, 000 annually. The tax rate is 21 percent. What is the project's operating cash flow?
y It was the end of the third quarter for Marigold Industries. There had been some discussion in prior quarters about best practices. related to carrying ending inventory of its key DM, acetic acid, for making vinegar. Per established standards, 7.1 ounces of acetic acid at a budgeted price of $0.30 per ounce were needed for each gallon of vinegar (128 ounces). The new production manager wants to follow lean practices and buy only what is needed for production, while the former production manager preferred to keep some inventory on hand for emergencies. For the third quarter, 316,800 ounces of acetic acid were purchased on account and used to make 44,000 gallons of vinegar. The purchase price was $88,704. (a1) Determine the DM price and efficiency variances for the third quarter based on the information above. DM price variance $ Your answer is correct. DM efficiency variance $ eTextbook and Media 4 R F V % 5 -T G B $ 6 O Search & 4- 7 YU H J N * 6336 1320 00 8 3 T ( K Favorable…
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