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Vaughn Company uses standard costing and recognizes all variances as soon as they are known. In the year just ended, Vaughn debited the DM Inventory account for $554,600 when it purchased DM on account. It further credited DM Inventory for $486,685 when it transferred materials into production, while debiting WIP Inventory for $535,800 to recognize the standard DM cost of these units produced. The company accrued $817,950 in wages to its production workers for this period's 54,530 hours of work. Also known by the end of the year were the following two variances: the DM price variance was $17,700 unfavorable, and the DL flexible budget variance was $19.950 unfavorable. Partial information on the company's DM and DL standards are reproduced here: Direct materials Direct labor 6 pounds/unit 3 hours/unit @ $4.70/pound $_/hour

Vaughn Company uses standard costing and recognizes all variances as soon as they are known. In the year just ended, Vaughn debited the DM Inventory account for $554,600 when it purchased DM on account. It further credited DM Inventory for $486,685 when it transferred materials into production, while debiting WIP Inventory for $535,800 to recognize the standard DM cost of these units produced. The company accrued $817,950 in wages to its production workers for this period's 54,530 hours of work. Also known by the end of the year were the following two variances: the DM price variance was $17,700 unfavorable, and the DL flexible budget variance was $19.950 unfavorable. Partial information on the company's DM and DL standards are reproduced here: Direct materials Direct labor 6 pounds/unit 3 hours/unit @ $4.70/pound $_/hour

FINANCIAL ACCOUNTING
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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Recreate Vaughn Company's variance analysis for DM and DL to determine the following variances: (1) DM efficiency variance, (2) DL price variance, and (3) DL efficiency variance. DM efficiency variance $ DL price variance DL efficiency variance $
Transcribed Image Text:Recreate Vaughn Company's variance analysis for DM and DL to determine the following variances: (1) DM efficiency variance, (2) DL price variance, and (3) DL efficiency variance. DM efficiency variance $ DL price variance DL efficiency variance $
Vaughn Company uses standard costing and recognizes all variances as soon as they are known. In the year just ended, Vaughn debited the DM Inventory account for $554,600 when it purchased DM on account. It further credited DM Inventory for $486,685 when it transferred materials into production, while debiting WIP Inventory for $535,800 to recognize the standard DM cost of these units produced. The company accrued $817.950 in wages to its production workers for this period's 54,530 hours of work. Also known by the end of the year were the following two variances: the DM price variance was $17,700 unfavorable, and the DL flexible budget variance was $19.950 unfavorable. Partial information on the company's DM and DL standards are reproduced here: Direct materials Direct labor 6 pounds/unit 3 hours/unit @ $4.70/pound @$_/hour
Transcribed Image Text:Vaughn Company uses standard costing and recognizes all variances as soon as they are known. In the year just ended, Vaughn debited the DM Inventory account for $554,600 when it purchased DM on account. It further credited DM Inventory for $486,685 when it transferred materials into production, while debiting WIP Inventory for $535,800 to recognize the standard DM cost of these units produced. The company accrued $817.950 in wages to its production workers for this period's 54,530 hours of work. Also known by the end of the year were the following two variances: the DM price variance was $17,700 unfavorable, and the DL flexible budget variance was $19.950 unfavorable. Partial information on the company's DM and DL standards are reproduced here: Direct materials Direct labor 6 pounds/unit 3 hours/unit @ $4.70/pound @$_/hour
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