12th Edition

ISBN: 9781308841380

Author: David H. Marshall, Wayne W. McManus, Daniel F. Viele

Publisher: McGraw Hill

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Textbook Question

Chapter 15, Problem 15.14E

Exercise 15.14

LO 4, 5

Direct material variances-solving for price and usage variances Fiberworks Company is a manufacturer of fiberglass toy boats. The company has recently implemented a standard cost system and has designed the system to isolate variances as soon as possible. During the month of May, the following results were reported for the production of 100,000 toy boats:

Direct materials (fiberglass) purchased	200,000 pounds
Direct materials issued into production	180,000 pounds
Standard pounds allowed per boat	1.75 pounds
Standard price per pound	$7.00
Cost of fiberglass purchased	$1,420,000

Required:

Calculate the actual cost per pound of fiberglass purchased during May.
Calculate the direct materials purchase price variance for May.
Calculate the direct materials usage variance for May.
Comment on calculating the material price variance based on pounds purchased rather than pounds issued into production.

Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

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Chapter 15, Problem 15.13E

Chapter 15, Problem 15.15E

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Chapter 15 Solutions

Accounting: What the Numbers Mean

Ch. 15 - Prob. 15.1ME Ch. 15 - Prob. 15.2ME Ch. 15 - Prob. 15.3ME Ch. 15 - Prob. 15.4ME Ch. 15 - Mini-Exercise 15.5 LO 4, 5, 6 Variable overhead...Ch. 15 - Mini-Exercise 15.6 LO 4. 5, 6 Fixed overhead...Ch. 15 - Prob. 15.7E Ch. 15 - Prob. 15.8E Ch. 15 - Prob. 15.9E Ch. 15 - Prob. 15.10E

Ch. 15 - Prob. 15.11E Ch. 15 - Prob. 15.12E Ch. 15 - Exercise 15.13 LO 4. 5 Direct material...Ch. 15 - Exercise 15.14 LO 4, 5 Direct material...Ch. 15 - Prob. 15.15E Ch. 15 - Prob. 15.16E Ch. 15 - Exercise 15.17 LO 9 Investment center analysis;...Ch. 15 - Prob. 15.18E Ch. 15 - Problem 15.19 LO 4. 5 Calculate variable cost...Ch. 15 - Problem 15.20 LO 4. 5 Calculate variable cost...Ch. 15 - Problem 15.21 LO 4, 5 Direct labor...Ch. 15 - Problem 15.22 LO 4, 5 Direct labor...Ch. 15 - Problem 15.23 LO 5, 6 Fixed overhead...Ch. 15 - Case 15.25 LO 3 Performance reporting The chair of...Ch. 15 - Case 15.26 LO 3 Flexible budgeting One of the...Ch. 15 - Case 15.27 LO 4 Frequency of performance reporting...Ch. 15 - Case 15.28 LO 5 Rank the importance of eight...Ch. 15 - Case 15.29 LO 4. 5 Direct material variances-the...Ch. 15 - Case 15.30 LO 5 Evaluate the effects of erroneous...Ch. 15 - Prob. 15.31C Ch. 15 - Case 15.32 The planning and control environment:...

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