K Co. was totally destroyed by fire during June. However, certain fragments of its cost records with thefollowing data were recovered: idle capacity variance, Rs.1,266 favorable; spending variance, Rs.879unfavorable; and applied factory overhead Rs.16, 234.Required:Determine (1) The budget allowance, based on capacity utilized, andthe actual factory overhead.3030

1. Budget allowance = Applied factory overhead - idle capacity variance = Rs. 16234 - 1266 = Rs.…

Answered: K Co. was totally destroyed by fire…

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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Moira Company has just finished its first year of operations and must decide which method to use for adjusting cost of goods sold. Because the company used a budgeted indirect cost rate for its manufacturing operations, the amount that was allocated ($435,000) to cost of goods sold was different from the actual amount incurred ($425,000). Ending balances in the relevant accounts were: Work in Process $ 40,000 Finished Goods 80,000 Cost of Goods Sold 680,000 Required 1. Prepare a journal entry to write off the difference between allocated and actual overhead directly to Cost of Goods Sold Be sure your entry closes the related overhead accounts. 2. Prepart a journal entry that prorates the write-off of the difference between allocated and actual overhead using ending account balances. Be sure your journal entry closes the related overhead accounts.
Vai
Vishnu
orsyth Company manufactures one product, it does not maintain any beginning or ending inventories, and its uses a standard cost system. During the year, the company produced and sold 10,000 units at a price of $154 per unit. Its standard cost per unit produced is $124 and its selling and administrative expenses totaled $244,500. Forsyth does not have any variable manufacturing overhead costs and it recorded the following variances during the year: Materials price variance $ 8,400 F Materials quantity variance $ 12,100 U Labor rate variance $ 5,400 U Labor efficiency variance $ 6,300 F Fixed overhead budget variance $ 4,400 F Fixed overhead volume variance $ 13,900 F 1. When Forsyth closes its standard cost variances, the cost of goods sold will increase (decrease) by how much? 2. Prepare an income statement for the year.
H1.
Yohan Company has the following balances in its direct materials and direct labor variance accounts at year-end: Direct Materials Price Debit Credit Variance $1,000 Direct Materials Quantity $2,000 Variance $500 Direct Labor Rate Variance $3,000 Direct Labor Efficiency Variance Unadjusted Cost of Goods Sold equals $200,000. Which of the following would be FALSE when the year-end closing entry is made? O The Cost of Goods Sold account will be debited. O Adjusted Cost of Goods Sold will be $198,500. The Direct Labor Rate Variance account will be debited. O The Direct Materials Price Variance account will be credited.
Hansaben
Kmu
The following data for DEF Company pertain to the production of 450 units of product X during June. Selected items are omitted because the costing records were lost in a computer breakdown. Direct Materials (All materials purchased were used.) Standard cost per unit: a grams at $4.00 per gram. Total actual cost: b grams costing $9,600. Standard cost allowed for units produced was $9,000. Materials price variance: c . Materials efficiency variance was $80 unfavorable. Direct Manufacturing Labor Standard cost is 3 hours per unit at $8.00 per hour. Actual cost per hour was $8.25. Total actual cost: d . Labor price variance: e . Labor efficiency variance was $400 unfavorable. Required: Compute the missing elements in the report represented by the lettered items. How might a manager gain insight into the causes of a flexible-budget variance for direct materials, direct labor? What can be the potential reasons? What kind of corrective…

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