financial accounting question Smith Furniture produced 2,500 chairs using 15,000 feetof lumber costing $180,000. The company's directmaterials standards for one chair are 6 feet of lumber at$10 per foot. Compute the direct materials price andquantity variances for manufacturing these chairs.

Step 1: DefinitionsDirect Materials Price Variance: The difference between the actual cost and the…

Answered: Smith Furniture produced 2,500 chairs…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter8: Standard Costs And Variances

Section: Chapter Questions

Problem 5PA: Ed Co. manufactures two types of O rings, large and small. Both rings use the same material but...

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Jameson Company produces paper towels. The company has established the following direct materials and direct labor standards for one case of paper towels: During the first quarter of the year, Jameson produced 45,000 cases of paper towels. The company purchased and used 135,700 pounds of paper pulp at 0.38 per pound. Actual direct labor used was 91,000 hours at 12.10 per hour. Required: 1. Calculate the direct materials price and usage variances. 2. Calculate the direct labor rate and efficiency variances. 3. Prepare the journal entries for the direct materials and direct labor variances. 4. Describe how flexible budgeting variances relate to the direct materials and direct labor variances computed in Requirements 1 and 2.
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At the beginning of the year, Lopez Company had the following standard cost sheet for one of its chemical products: Lopez computes its overhead rates using practical volume, which is 80,000 units. The actual results for the year are as follows: (a) Units produced: 79,600; (b) Direct labor: 158,900 hours at 18.10; (c) FOH: 831,000; and (d) VOH: 112,400. Required: 1. Compute the variable overhead spending and efficiency variances. 2. Compute the fixed overhead spending and volume variances.
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Inezza Industries purchased and consumed 72,000 gallons of direct material that was used in the production of 15,000 finished units of product. According to engineering specifications, each finished unit had a manufacturing standard of five gallons. If the material price variance is $7,200U and the material quantity variance is $2,400F, what is the actual price paid for a gallon of direct material?

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Smith Furniture produced 2,500 chairs using 15,000 feet of lumber costing $180,000. The company's direct materials standards for one chair are 6 feet of lumber at $10 per foot. Compute the direct materials price and quantity variances for manufacturing these chairs.