Deluxe, Inc. produced 1,000 units of the company's product in 2018. The standard quantity of direct materials was three yards of cloth per unit at a standard cost of $1.05 per yard. The accounting records showedthat 2,600 yards of cloth were used and the company paid $1.10 per yard. Standard time was two direct labor hours per unit at a standard rate of $10.75 per direct labor hour. Employees worked 1,400 hours andwere paid $10.25 per hour.Read the requirements.Requirement 1. What are the benefits of setting cost standards?Standard costing helps managers do the following:Requirement 2. Calculate the direct materials cost variance and the direct materials efficiency variance as well as the direct labor cost and efficiency variances.Begin with the cost variances. Select the required formulas, compute the cost variances for direct materials and direct labor, and identify whether each variance is favorable (F) or unfavorable (U). (Abbreviationsused: AC actual cost; AQ = actual quantity; FOH = fixed overhead; SC = standard cost; SQ standard quantity.)-CH*JOI&18 Requirement 2. Calculate the direct materials cost variance and the direct materials efficiency variance as well as the direct labor cost and efficiency variances.Begin with the cost variances. Select the required formulas, compute the cost variances for direct materials and direct labor, and identify whether each variance is favorable (F) or unfavorable (U). (Abbreviationsused: AC = actual cost; AQ = actual quantity; FOH = fixed overhead; SC = standard cost; SQ = standard quantity.)FormulaVarianceDirect materials cost variance==4Direct labor cost varianceSelect the required formulas, compute the efficiency variances for direct materials and direct labor, and identify whether each variance is favorable (F) or unfavorable (U). (Abbreviations used: AC = actual cost;AQ= actual quantity; FOH = fixed overhead; SC = standard cost; SQ = standard quantity.)FormulaVariance=Direct materials efficiency varianceDirect labor efficiency varianceC-esc?6789OOMudatab1411A2WS#*3$4%ERDELL5TV406&BالالالاNMPV[?1Jpause

Name: Deluxe, Inc. produced 1,000 units of the company's product in 2018. T
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Description: Deluxe, Inc. produced 1,000 units of the company's product in 2018. The standard quantity of direct materials was three yards of cloth per unit at a standard cost of $1.05 per yard. The accounting records showedthat 2,600 yards of cloth were used an

The variance is the difference between the standard data and actual production data for the period.

Business

Accounting

Requirement 2. Calculate the direct materials cost variance and the direct materials efficiency variance as well as the direct labor cost and efficiency variances. Begin with the cost variances. Select the required formulas, compute the cost variances for direct materials and direct labor, and identify whether each variance is favorable (F) or unfavorable (U). (Abbrevia used: AC= actual cost; AQ = actual quantity; FOH = fixed overhead; SC= standard cost; SQ = standard quantity.). Formula Variance = = Direct materials cost variance Direct labor cost variance Select the required formulas, compute the efficiency variances for direct materials and direct labor, and identify whether each variance is favorable (F) or unfavorable (U). (Abbreviations used: AC = actual cost; AQ= actual quantity; FOH = fixed overhead; SC standard cost; SQ = standard quantity.) Formula Variance = Direct materials efficiency variance Direct labor efficiency variance

Requirement 2. Calculate the direct materials cost variance and the direct materials efficiency variance as well as the direct labor cost and efficiency variances. Begin with the cost variances. Select the required formulas, compute the cost variances for direct materials and direct labor, and identify whether each variance is favorable (F) or unfavorable (U). (Abbrevia used: AC= actual cost; AQ = actual quantity; FOH = fixed overhead; SC= standard cost; SQ = standard quantity.). Formula Variance = = Direct materials cost variance Direct labor cost variance Select the required formulas, compute the efficiency variances for direct materials and direct labor, and identify whether each variance is favorable (F) or unfavorable (U). (Abbreviations used: AC = actual cost; AQ= actual quantity; FOH = fixed overhead; SC standard cost; SQ = standard quantity.) Formula Variance = Direct materials efficiency variance Direct labor efficiency variance

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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se III) a) b) C) d) explain the meaning of the term/technique, give two examples of its application, explain some of the practical limitations of which users should be aware with regard to the term/technique. Indirect costs Equivalent units Contribution Direct material yield variance
iv) Labour rate variance v) Labour efficiency variance vi) Overhead variances (both) d.Comment on your calculations produced in c above.
56. When the actual amount of a raw material used in production is greater than the standard amount allowed for the actual output, the journal entry would include: Debit A. Materials Qty. Variance B. Materials Qty. Variance Credit Raw Materials Work in Process Credit c. Raw Materials d. Work in Process Credit Materials Qty. Variance Materials Qty. Variance
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Wetherbee Tech Services (WTS) is a chain of computer maintenance technicians for households and small businesses. The following data are available for last year's services: • WTS recorded 120,900 tech calls last year. It had budgeted 126,800 calls, averaging 90 minutes each. • Standard variable labor and support costs per tech call were as follows: Direct IT specialist services: 90 minutes at $54 per hour Variable support staff, supplies, and overhead: 30 minutes at $24 per hour Fixed overhead costs: Annual budget $4,141,800 • Fixed overhead is applied at the rate of $36.00 per call. . Actual tech service call costs: Direct IT specialist services: 120,900 calls averaging 84 minutes at $56.00 per hour Variable support staff, supplies, and overhead: averaging 40 minutes per call at $22.50 per hour x 120,900 calls Fixed overhead Required: a. Prepare a cost variance analysis for each variable cost for last year. b. Prepare a fixed overhead cost variance analysis. Complete this question by…
Which of the following statements Is true? Multiple Choice The material quantity variance is recorded when overhead is applied to production. The material price and the material quantity variances are recorded at the same time., The materials quantity variance is recorded when materials are used in production. The materials quantity variance is recorded when materials are purchased.
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The following direct materials and direct labor data pertain to the operations of Sandhill Company for the month of August. Costs Actual labor rate Actual materials price Standard labor rate Standard materials price $13 $120 $12.50 $124 Quantities per hour per ton per hour per ton Actual hours incurred and used Actual quantity of materials purchased and used Standard hours used Standard quantity of materials used 4,900 hours 2,000 tons 4,960 hours 1,990 tons
a. Direct materials price variance Unfavorable b. Direct materials quantity variance Favorable c. Direct materials cost variance Unfavorable
Complete the standard cost variance analysis
а. Standard Cost per Unit for Direct Materials and Direct Labor b. Direct Materials Price Variance Wrong Direct Materials Quantity Variance Wrong Total Direct Materials Cost Variance Wrong с. Direct Labor Rate Variance Wrong Direct Labor (Time) Efficiency Variance Wrong Total Direct Labor Cost Variance Wrong