Sales units Price Direct materials cost per unit of material Direct materials required per unit Direct labor required per unit Wage rate ($/hour) Current Year 40,700 $ 23.10 $ 7.40 1.50 0.60 $ 10.00 Prior Year 47,100 $28.29 $ 8.50 2.00 0.75 $14.00
Sales units Price Direct materials cost per unit of material Direct materials required per unit Direct labor required per unit Wage rate ($/hour) Current Year 40,700 $ 23.10 $ 7.40 1.50 0.60 $ 10.00 Prior Year 47,100 $28.29 $ 8.50 2.00 0.75 $14.00
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
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.
Topic Video
Question
Please do not give solution in image format thanku
Transcribed Image Text:Required:
1. Determine the selling price variance for the current year based on sales dollars. Determine the sales volume variance based on
contribution margin.
2. Determine the following variable cost variances:
a. The usage and price variances for direct materials.
b. The efficiency and rate variances for direct labor.
1. Selling price variance in sales dollars
Sales volume variance in contribtion
2a. Materials usage variance
Materials price variance
2b. Labor usage variance
Labor rate variance
![Problem 16-58 Sales and Variable Cost Variances; Current to Prior Year; Review of Chapter 14 [LO 16-4]
RJM Enterprises is a manufacturer of consumer electronics products. The industry is very competitive, and RJM has seen its profits fall
in recent years, including an operating loss of $18,770 last year. RJM was able to turn that around this year by aggressively cutting
costs. The summarized financial results for RJM are shown below:
Gross sales:
Less variable costs
Direct materials
Direct labor
Total contribution margin
Fixed cost
Operating income
Current Year
$940, 170
451,770
244, 200
$244, 200
33,509
$210,691
Prior Year
$1,332,459
Sales units
Price
Direct materials cost per unit of material
Direct materials required per unit
Direct labor required per unit
Wage rate ($/hour)
$
800,700
494,529
37,230
56,000
$ (18,770)
Jim Green, the management accountant at RJM, is analyzing the company's performance for this year in order to explain to
management the specific aspects that drove the company to success. Some of the information Jim obtained follows:
Current
Year
40,700
$ 23.10
$7.40
1.50
0.60
$ 10.00
Prior Year
47,100
$28.29
$8.50
2.00
0.75
$14.00
Assume that RJM, for efficiency and to reduce cost, maintains little or no direct materials or work-in-process inventory.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5c9526c1-c92e-4b17-b334-bbc08d5d0873%2Fd8e61f02-a984-446a-8999-568a5eec77ae%2Faawsjwg_processed.png&w=3840&q=75)
Transcribed Image Text:Problem 16-58 Sales and Variable Cost Variances; Current to Prior Year; Review of Chapter 14 [LO 16-4]
RJM Enterprises is a manufacturer of consumer electronics products. The industry is very competitive, and RJM has seen its profits fall
in recent years, including an operating loss of $18,770 last year. RJM was able to turn that around this year by aggressively cutting
costs. The summarized financial results for RJM are shown below:
Gross sales:
Less variable costs
Direct materials
Direct labor
Total contribution margin
Fixed cost
Operating income
Current Year
$940, 170
451,770
244, 200
$244, 200
33,509
$210,691
Prior Year
$1,332,459
Sales units
Price
Direct materials cost per unit of material
Direct materials required per unit
Direct labor required per unit
Wage rate ($/hour)
$
800,700
494,529
37,230
56,000
$ (18,770)
Jim Green, the management accountant at RJM, is analyzing the company's performance for this year in order to explain to
management the specific aspects that drove the company to success. Some of the information Jim obtained follows:
Current
Year
40,700
$ 23.10
$7.40
1.50
0.60
$ 10.00
Prior Year
47,100
$28.29
$8.50
2.00
0.75
$14.00
Assume that RJM, for efficiency and to reduce cost, maintains little or no direct materials or work-in-process inventory.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 5 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education