Requirements Compute the cost and efficiency variances for direct materials and direct labor. For manufacturing overhead, compute the variable overhead cost and efficiency variances and the fixed overhead cost and volume variances. 3. Hear Smart's management used better quality materials during September. Discuss the trade-off between the two direct material variances. 1. 2. Print Done 1 labor. or direct materials and eviations used: AC = ard quantity.) Fiance 150 U 160 U
Requirements Compute the cost and efficiency variances for direct materials and direct labor. For manufacturing overhead, compute the variable overhead cost and efficiency variances and the fixed overhead cost and volume variances. 3. Hear Smart's management used better quality materials during September. Discuss the trade-off between the two direct material variances. 1. 2. Print Done 1 labor. or direct materials and eviations used: AC = ard quantity.) Fiance 150 U 160 U
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
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.
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Transcribed Image Text:Requirements
1.
2.
Hear Smart manufactures headphone cases. During September 2018, the company produced and sold 105,000 cases
and recorded the following cost data:
(Click the icon to view the cost data.)
3.
Compute the cost and efficiency variances for direct materials and direct
labor.
For manufacturing overhead, compute the variable overhead cost and
efficiency variances and the fixed overhead cost and volume variances.
Hear Smart's management used better quality materials during September.
Discuss the trade-off between the two direct material variances.
Print
Done
-
X
labor.
or direct materials and
eviations used: AC =
ard quantity.)
iance
150 U
160 U
Inco
Transcribed Image Text:Data table
Standard Cost Information
Cost
Direct Materials
2 parts
$0.15 per part
Direct Labor
0.02 hours
8.00 per hour
Variable Manufacturing Overhead
0.02 hours
10 per hour
Fixed Manufacturing Overhead ($28,500 for static budget volume of 95,000
units and 1,900 hours, or $15 per hour)
Actual Cost Information
Direct Materials
Direct Labor
Variable Manufacturing Overhead
Fixed Manufacturing Overhead
Print
Quantity
(209,000 parts @ $0.20 per part)
(1,600 hours @ $8.15 per hour)
Done
$ 41,800
13,040
9,000
26,000
-
X
or
ire
tic
qu
ce
an
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