MANAGERIAL ACCOUNTING F/MGRS.
MANAGERIAL ACCOUNTING F/MGRS.
5th Edition
ISBN: 9781259969485
Author: Noreen
Publisher: RENT MCG
Question
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Chapter 10, Problem 1TF15

1.

To determine

Introduction: Standard costing means the accounting system which is used by manufacturers mainly to identify variances or difference that occur in cost. The difference is identified between actual cost of goods that were manufactured and those cost which should have occurred when actual goods were manufactured.

Raw material cost in company’s planning budget for March.

1.

Expert Solution
Check Mark

Answer to Problem 1TF15

The raw material cost in company’s planning budget for March is $1,000,000.

Explanation of Solution

  Raw material cost= (Raw material required per unit × Raw material coct per unit × Planning sales units in March)

  Raw material cost= 5×8×25,000Raw material cost= $1,000,000

2.

To determine

Introduction: Standard costing means the accounting system which is used by manufacturers mainly to identify variances or difference that occur in cost. The difference is identified between actual cost of goods that were manufactured and those cost which should have oc mapping the formal plan.

Raw material cost in company’s flexible budget for March.

2.

Expert Solution
Check Mark

Answer to Problem 1TF15

The raw material cost in company’s flexible budget for March is $1,200,000.

Explanation of Solution

  Raw material cost= (Raw material required per unit × Raw material coct per unit × Planning sales units in March)

  Raw material cost= 5×8×30,000Raw material cost= $1,200,000

3.

To determine

Introduction: Standard costing means the accounting system which is used by manufacturers mainly to identify variances or difference that occur in cost. The difference is identified between actual cost of goods that were manufactured and those cost which should have oc mapping the formal plan.

Materials price variance for March.

3.

Expert Solution
Check Mark

Answer to Problem 1TF15

The materials price variance for March is $80,000.

Explanation of Solution

  Raw material price variation= (Volume of raw material×( Actual raw material price per pound  - Price paid for raw material per pound ))

  Raw material price variation= $160,000×($8-$7.5)Raw material price variation= $80,000

4.

To determine

Introduction: Standard costing means the accounting system which is used by manufacturers mainly to identify variances or difference that occur in cost. The difference is identified between actual cost of goods that were manufactured and those cost which should have oc mapping the formal plan.

Materials quantity variance for March.

4.

Expert Solution
Check Mark

Answer to Problem 1TF15

The materials quantity variance for March is $80,000.

Explanation of Solution

  Raw material quantity variation= (Raw material price×(  Purchase of raw material  - ( Selling unit× Raw material required for producing 1 unit ) ))

  Raw material quantity variation= 8×(160,000-(30,000×5))Raw material quantity variation= $80,000

5.

To determine

Introduction: Standard costing means the accounting system which is used by manufacturers mainly to identify variances or difference that occur in cost. The difference is identified between actual cost of goods that were manufactured and those cost which should have oc mapping the formal plan.

Material Price Variance for March if 170,000 of materials was purchased at $7.50 per pound and 160,000 was used in productions.

5.

Expert Solution
Check Mark

Answer to Problem 1TF15

Material Price Variance for March if 170,000 of materials were purchased at $7.50 per pound and 160,000 were used in productions is $85,000.

Explanation of Solution

  Raw material price variation= (Volume of raw material×( Actual raw material price per pound Price paid for raw material per pound ))

  Raw material price variation= 170,000×($8-7.5)Raw material price variation= $85,000

6.

To determine

Introduction: Standard costing means the accounting system which is used by manufacturers mainly to identify variances or difference that occur in cost. The difference is identified between actual cost of goods that were manufactured and those cost which should have oc mapping the formal plan.

Material Quantity Variance for March if 170,000 of materials was purchased at $7.50 per pound and 160,000 was used in productions.

6.

Expert Solution
Check Mark

Answer to Problem 1TF15

Material Quantity Variance for March if 170,000 of materials were purchased at $7.50 per pound and 160,000 were used in productions is $80,000.

Explanation of Solution

  Raw material quantity variance= (Raw material price×( Purchase of raw material ( Selling unit × Raw material required for producing 1 unit ) ))

  Raw material quantity variance= 8×(170,000-160,000)Raw material quantity variance= $80,000

7.

To determine

Introduction: Standard costing means the accounting system which is used by manufacturers mainly to identify variances or difference that occur in cost. The difference is identified between actual cost of goods that were manufactured and those cost which should have oc mapping the formal plan.

Direct labor cost in company’s planning budget for March.

7.

Expert Solution
Check Mark

Answer to Problem 1TF15

The direct labor cost in company’s planning budget for March is $770,000

Explanation of Solution

  Direct labor cost= (Direct labor hour ×Direct labor cost paid per hour)

  Direct labor cost= 55,000×14Direct labor cost= $770,000

8.

To determine

Introduction: Standard costing means the accounting system which is used by manufacturers mainly to identify variances or difference that occur in cost. The difference is identified between actual cost of goods that were manufactured and those cost which should have oc mapping the formal plan.

Direct labor cost in company’s flexible budget for March.

8.

Expert Solution
Check Mark

Answer to Problem 1TF15

The direct labor cost in company’s flexible budget for March is $840,000

Explanation of Solution

  Direct labor cost= (Sales unit×Direct labor cost paid per hour×Hours required to produce 1 unit)

  Direct labor cost= 30,000×14×2Direct labor cost= $840,000

9.

To determine

Introduction: Standard costing means the accounting system which is used by manufacturers mainly to identify variances or difference that occur in cost. The difference is identified between actual cost of goods that were manufactured and those cost which should have oc mapping the formal plan.

Labor rate variance for March.

9.

Expert Solution
Check Mark

Answer to Problem 1TF15

The labor rate variance for March is $55,000.

Explanation of Solution

  Labor rate variance = (Direct  labor hours×( Actual labor cost per hour - Labor cost paid per hour ))

  Labor rate variance = 55,000×(15-14)Labor rate variance = $55,000

10.

To determine

Introduction: Standard costing means the accounting system which is used by manufacturers mainly to identify variances or difference that occur in cost. The difference is identified between actual cost of goods that were manufactured and those cost which should have oc mapping the formal plan.

Labor efficiency variance for March.

10.

Expert Solution
Check Mark

Answer to Problem 1TF15

Labor efficiency variance for March is 70,000

Explanation of Solution

  Labor efficiency variance= (Labor cost paid per hour×( Direct labor hour - ( Sales unit ×Hours required to produce 1 unit ) ))

  Labor efficiency variance= 14×(55,000(30,000×2))Labor efficiency variance=70,000

11.

To determine

Introduction: Standard costing means the accounting system which is used by manufacturers mainly to identify variances or difference that occur in cost. The difference is identified between actual cost of goods that were manufactured and those cost which should have oc mapping the formal plan.

Labor spending variance for March.

11.

Expert Solution
Check Mark

Answer to Problem 1TF15

The Labor spending variance for March is $15,000

Explanation of Solution

  Labor spending variance=(( Sale sunit ×Direct labor cost paid per hour ×Hours required to produce 1 unit)( Direct labor hour ×Actual labor cost))

  Labor spending variance=(30,000×14×2)(55,000×15)Labor spending variance=15,000

12.

To determine

Introduction: Standard costing means the accounting system which is used by manufacturers mainly to identify variances or difference that occur in cost. The difference is identified between actual cost of goods that were manufactured and those cost which should have oc mapping the formal plan.

Variable manufacturing overhead cost in company’s planning budget for March.

12.

Expert Solution
Check Mark

Answer to Problem 1TF15

The variable manufacturing overhead cost in company’s planning budget for March is $250,000.

Explanation of Solution

  Variable overhead cost= (Planning sales unit×Variable overhead cost per hour×Variable overehead hours required to produce 1 unit)

  Variable overhead cost= 25,000×5×2Variable overhead cost= $250,000

13.

To determine

Introduction: Standard costing means the accounting system which is used by manufacturers mainly to identify variances or difference that occur in cost. The difference is identified between actual cost of goods that were manufactured and those cost which should have oc mapping the formal plan.

Variable manufacturing overhead cost in company’s flexible budget for March.

13.

Expert Solution
Check Mark

Answer to Problem 1TF15

The variable manufacturing overhead cost in company’s flexible budget for March is $300,000.

Explanation of Solution

  Variable overhead cost= (Flexible sales unit×Variable overhead cost per hour×Variable overehead hours required to produce 1 unit)

  Variable overhead cost= 30,000×5×2Variable overhead cost= $300,000

14.

To determine

Introduction: Standard costing means the accounting system which is used by manufacturers mainly to identify variances or difference that occur in cost. The difference is identified between actual cost of goods that were manufactured and those cost which should have oc mapping the formal plan.

Variable overhead rate variance for March.

14.

Expert Solution
Check Mark

Answer to Problem 1TF15

The variable overhead rate variance for March is $5,500.

Explanation of Solution

  Variable overhead rate variance= (Total manufacturing overhead-( Labor work hours ×Variable overhead cost per hour ))

  Variable overhead rate variance= 280,500 -(55,000×5)Variable overhead rate variance= $5,500

15.

To determine

Introduction: Standard costing means the accounting system which is used by manufacturers mainly to identify variances or difference that occur in cost. The difference is identified between actual cost of goods that were manufactured and those cost which should have oc mapping the formal plan.

Variable overhead efficiency variance for March.

Introduction: Standard costing means the accounting system which is used by manufacturers mainly to identify variances or difference that occur in cost. The difference is identified between actual cost of goods that were manufactured and those cost which should have oc mapping the formal plan.

Variable overhead efficiency variance for March.

15.

Expert Solution
Check Mark

Answer to Problem 1TF15

The variable overhead efficiency variance for March is $25,000.

Explanation of Solution

  Variable overhead efficiency variance=(Variable overhead cost per hour×( ( Flexible sales unit ×Variable overhead hours required to produce 1 unit ) labor work hours ))

  Variable overhead efficiency variance=5×((30,000×2)55,000)Variable overhead efficiency variance=$25,000

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