Explain whether the statement is agreeable or not.

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Answer 1

Question

Definition Definition Measure used to estimate the difference between the budgeted and annual proportion for a specific accounting year. A favorable budget variance refers to positive variances or gains, while unfavorable or negative variances refer to a shortfall in the budget. A budget variance is indicative of the instances where the actual costs incurred are higher or lower than the estimated costs.

Chapter 15, Problem 1Q

To determine

Explain whether the statement is agreeable or not.

Expert Solution & Answer

Explanation of Solution

The total factory overhead amount is identical as the standard amount allowed for the current period’s output though one or more of the components of the total factory overhead have important variances.

For example:

A firm can have a significant unfavorable factory overhead flexible-budget variance and have equal favorable production volume variance. The contributing factors to the unfavorable factory overhead flexible-budget variance and to the favorable production volume variance are likely to be different. If not corrected, factors that lead to the significant unfavorable overhead flexible-budget variance of a period will continue into the future with the consequence that an organization persists to undergo from unfavorable flexible-budget variances.

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The standard labor cost in the production of a pair of Thunder Brand running shoes is 0.60 hours at $18 per hour. During the month of July, 32,000 pairs were produced. Actual labor costs were $182,000 for 10,250 hours. Compute the labor rate variance and labor efficiency variance for the month of July.

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Answer 2

Question

Definition Definition Measure used to estimate the difference between the budgeted and annual proportion for a specific accounting year. A favorable budget variance refers to positive variances or gains, while unfavorable or negative variances refer to a shortfall in the budget. A budget variance is indicative of the instances where the actual costs incurred are higher or lower than the estimated costs.

Chapter 15, Problem 1Q

To determine

Explain whether the statement is agreeable or not.

Expert Solution & Answer

Explanation of Solution

The total factory overhead amount is identical as the standard amount allowed for the current period’s output though one or more of the components of the total factory overhead have important variances.

For example:

A firm can have a significant unfavorable factory overhead flexible-budget variance and have equal favorable production volume variance. The contributing factors to the unfavorable factory overhead flexible-budget variance and to the favorable production volume variance are likely to be different. If not corrected, factors that lead to the significant unfavorable overhead flexible-budget variance of a period will continue into the future with the consequence that an organization persists to undergo from unfavorable flexible-budget variances.

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Answer 3

Question

Definition Definition Measure used to estimate the difference between the budgeted and annual proportion for a specific accounting year. A favorable budget variance refers to positive variances or gains, while unfavorable or negative variances refer to a shortfall in the budget. A budget variance is indicative of the instances where the actual costs incurred are higher or lower than the estimated costs.

Chapter 15, Problem 1Q

To determine

Explain whether the statement is agreeable or not.

Expert Solution & Answer

Explanation of Solution

The total factory overhead amount is identical as the standard amount allowed for the current period’s output though one or more of the components of the total factory overhead have important variances.

For example:

A firm can have a significant unfavorable factory overhead flexible-budget variance and have equal favorable production volume variance. The contributing factors to the unfavorable factory overhead flexible-budget variance and to the favorable production volume variance are likely to be different. If not corrected, factors that lead to the significant unfavorable overhead flexible-budget variance of a period will continue into the future with the consequence that an organization persists to undergo from unfavorable flexible-budget variances.

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Answer 4

Question

Definition Definition Measure used to estimate the difference between the budgeted and annual proportion for a specific accounting year. A favorable budget variance refers to positive variances or gains, while unfavorable or negative variances refer to a shortfall in the budget. A budget variance is indicative of the instances where the actual costs incurred are higher or lower than the estimated costs.

Chapter 15, Problem 1Q

To determine

Explain whether the statement is agreeable or not.

Expert Solution & Answer

Explanation of Solution

The total factory overhead amount is identical as the standard amount allowed for the current period’s output though one or more of the components of the total factory overhead have important variances.

For example:

A firm can have a significant unfavorable factory overhead flexible-budget variance and have equal favorable production volume variance. The contributing factors to the unfavorable factory overhead flexible-budget variance and to the favorable production volume variance are likely to be different. If not corrected, factors that lead to the significant unfavorable overhead flexible-budget variance of a period will continue into the future with the consequence that an organization persists to undergo from unfavorable flexible-budget variances.

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Answer 5

Chapter 15, Problem 1Q

To determine

Explain whether the statement is agreeable or not.

Expert Solution & Answer

Explanation of Solution

The total factory overhead amount is identical as the standard amount allowed for the current period’s output though one or more of the components of the total factory overhead have important variances.

For example:

A firm can have a significant unfavorable factory overhead flexible-budget variance and have equal favorable production volume variance. The contributing factors to the unfavorable factory overhead flexible-budget variance and to the favorable production volume variance are likely to be different. If not corrected, factors that lead to the significant unfavorable overhead flexible-budget variance of a period will continue into the future with the consequence that an organization persists to undergo from unfavorable flexible-budget variances.

Answer 6

Chapter 15, Problem 1Q

To determine

Explain whether the statement is agreeable or not.

Expert Solution & Answer

Explanation of Solution

The total factory overhead amount is identical as the standard amount allowed for the current period’s output though one or more of the components of the total factory overhead have important variances.

For example:

A firm can have a significant unfavorable factory overhead flexible-budget variance and have equal favorable production volume variance. The contributing factors to the unfavorable factory overhead flexible-budget variance and to the favorable production volume variance are likely to be different. If not corrected, factors that lead to the significant unfavorable overhead flexible-budget variance of a period will continue into the future with the consequence that an organization persists to undergo from unfavorable flexible-budget variances.

Answer 7

Chapter 15, Problem 1Q

To determine

Explain whether the statement is agreeable or not.

Answer 8

Expert Solution & Answer

Explanation of Solution

The total factory overhead amount is identical as the standard amount allowed for the current period’s output though one or more of the components of the total factory overhead have important variances.

For example:

A firm can have a significant unfavorable factory overhead flexible-budget variance and have equal favorable production volume variance. The contributing factors to the unfavorable factory overhead flexible-budget variance and to the favorable production volume variance are likely to be different. If not corrected, factors that lead to the significant unfavorable overhead flexible-budget variance of a period will continue into the future with the consequence that an organization persists to undergo from unfavorable flexible-budget variances.