Standard costing, journal entries. The Warner Company manufactures reproductions of expen- sive sunglasses. Warner uses the standard-costing method of process costing to account for the produc- tion of the sunglasses. All materials are added at the beginning of production. The costs and output of sunglasses for May 2017 are as follows: Physical % of Completion for Conversion Costs 60% Direct Materials Conversion Costs Work in process, beginning Started during May Completed and transferred out Work in process, ending Standard cost per unit Costs added during May Units 22,000 95,000 87,000 30,000 $ 48,400 $ 33,000 75% $ 2.20 $ 2.50 $207,500 $238,000

Q: The total absorbtion rate used to allocate manuafcturing overhead is calculated by?

A: The absorption rate is allocated using the different allocation bases Direct labors hours Direct…

Q: Which do you think is more important for controlling fixed overhead costs: the spending variance or…

A: (This is not a subjective matter of opinion but rather is based on accounting principles and theory…

Q: significant of variance analysis in cost management.

A: Variance analysis is a tool in cost management to compare and analyze variations in budgeted costs…

Q: The standards for direct materials are made up of which of the following components? a.variance…

A: The question is multiple choice question. Required  Choose the Correct Option.

Q: What is the overall variance in overhead?

A: Overhead refers to secondary expenditures spent during the manufacturing and distribution of…

Q: how to compute quantity/efficiency variance

A: Cost accounting is beneficial since it can demonstrate where a corporation spends money, earns…

Q: Explain the following concepts: indirect materials Mixed cost Budgeting Margin of safety

A: The total manufacturing cost of the product is determined by including the direct material, labor,…

Q: Explain variable overhead costs.

A: Variable Costing: “Variable costing is a method that allocates only variable manufacturing costs to…

Q: Discuss the disadvantages of Absorption Costing for cost control and performance evaluation.

A: Absorption Costing: Absorption costing is a method for calculating the full cost or total cost of a…

Q: Discuss the standard costing and variance analysis of material and labour cost elements with an…

A: Cost accounting is the branch of accounting that inspects the cost structure of a business. This…

Q: what are relevent cost of direct material

A: The management of the manufacturing firm has to take certain decisions regarding the…

Q: Explain direct labour efficiency variance.

A: Variance: Variance refers to the difference level in the actual cost incurred and standard cost. The…

Q: Describe planning for variable overhead costs.

A: Variable Cost: The cost which is not fixed is called a variable cost. This cost is directly…

Q: Define direct material variance.

A: Variance:   Variance refers to the difference level in the actual cost incurred and standard cost.…

Q: Explain and describe the overhead variance.

A: Variance means when the actual cost does not match with the estimated costs. To compute the…

Q: Which method is used to see if a relationship between the cost driver and total cost exists?…

A: Cost drivers means activity units that will cause change in total cost for example, number of…

Q: Define absorption costing.

A: Absorption costing refers to managerial accounting cost method for expending each costs associated…

Q: Define fixed overhead variance.

A: Fixed Overhead Variance is the difference between actual and absorbed fixed production overheads…

Q: criticly identify the possible causes of labour and material variance

A: Labour Variances: 1. Unskilled or inefficient workers. 2. Unfavourable wage rates. 3. Unexpected…

Q: Assume the variance is material, what is the adjustment of the cost of good sold

A: Solution: Adjustment cost of goods sold vary based on variance in material or immaterial.

Q: Prime cost is? A)Group of answer choices B)indirect materials cost and direct labor cost.…

A: Prime cost refers to the cost related to direct labour and direct material  For example in the…

Q: What is the cost per equivalent unit for materials?

A:

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.