COST ACCOUNTING W/CONNECT
6th Edition
ISBN: 9781264022021
Author: LANEN
Publisher: MCG
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Textbook Question
Chapter 16, Problem 40E
(Appendix used in requirement [b]) Variable Cost Variances
Information on Bowgie Chemicals direct materials costs follows:
![Chapter 16, Problem 40E, (Appendix used in requirement [b]) Variable Cost Variances Information on Bowgie Chemicals direct](http://dev-ingestion-image-output.s3-website-us-east-1.amazonaws.com/9781259565403/Chapter-16/images/65403-16-37e-question-digital_image_001.png)
Bowgie Chemicals has no materials inventories.
Required
- a. Prepare a short report for management showing Bowgie Chemicals’s direct materials price and efficiency variances.
- b. (Appendix) Prepare the
journal entries to record the purchase and use of the direct materials usingstandard costing .
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Do not give image format
Under Standard Costing System, if the journal entry to record usage of direct materials include a credit to direct material usage variance, it means that
A. Actual price of direct material is higher than the standard priceB. Actual price of direct material is lower than the standard priceC. Actual direct materials used is higher than the standard quantity of direct materialsD. Actual direct materials used is lower than the standard quantity of direct materials
Haliburton Mills Inc. is a large producer of men's and women's clothing. The company uses standard costs for all of its products. The
standard costs and actual costs for a recent period are given below for one of the company's product lines (per unit of product):
Standard
Cost
Actual
Cost
Direct materials:
Standard: 2.0 metres at $4.50 per metre
Actual: 2.4 metres at $4.25 per metre
Direct labour:
Standard: 2.4 hours at $3.50 per hour
Actual: 2.0 hours at $3.85 per hour
$ 9.00
$10.20
8.48
7.70
Variable manufacturing overhead:
Standard: 2.4 hours at $3.00 per hour
Actual: 2.0 hours at $3.65 per hour
7.20
7.30
Fixed manufacturing overhead:
Standard: 2.4 hours at $3.90 per hour
Actual: 2.0 hours at $3.95 per hour
Total cost per unit
9.36
7.90
$33.96
$ 33.10
Actual costs: 4,580 units at $33.10
Standard costs: 4,500 units at $33.96
Difference in cost-favourable
$148,950
152,820
$ 3,870
During this period, the company produced 4,500 units of product. A comparison of standard and actual costs…
Chapter 16 Solutions
COST ACCOUNTING W/CONNECT
Ch. 16 - What are the advantages of the contribution margin...Ch. 16 - How can a budget be used for performance...Ch. 16 - The flexible budget for coats it computed by...Ch. 16 - A flexible budget is: a. Appropriate for control...Ch. 16 - What is the standard cost sheet?Ch. 16 - What is the basic difference between a mailer...Ch. 16 - Standards and budgets are the same thing. True or...Ch. 16 - Actual direct materials costs differ from the...Ch. 16 - Fixed cost variances are computed differently from...Ch. 16 - What is the advantage of preparing the flexible...
Ch. 16 - What is the link between flexible budgeting and...Ch. 16 - Actual revenues are greater than budgeted for...Ch. 16 - Pick an organization you know, such as a school,...Ch. 16 - Give two reasons why dividing production cost...Ch. 16 - Prob. 15CADQCh. 16 - My firm has a wage contract with the union....Ch. 16 - Prob. 17CADQCh. 16 - The production volume variance should be charged...Ch. 16 - Prob. 19CADQCh. 16 - Prob. 20CADQCh. 16 - Flexible Budgeting The master budget at Western...Ch. 16 - Sales Activity Variance Refer to the data in...Ch. 16 - Profit Variance Analysis Refer to the data in...Ch. 16 - Flexible Budget Given the data shown in the...Ch. 16 - Fill in Amounts on Flexible Budget Graph Fill in...Ch. 16 - Flexible Budget Label (a) and (b) in the graph and...Ch. 16 - Prepare Flexible Budget Osage, Inc., manufactures...Ch. 16 - Sales Activity Variance Refer to the data in...Ch. 16 - Profit Variance Analysis Use the information from...Ch. 16 - Sales Activity Variance The following data are...Ch. 16 - Sales Activity Variance Selected data for October...Ch. 16 - Prob. 32ECh. 16 - Prob. 33ECh. 16 - Prob. 34ECh. 16 - Prob. 35ECh. 16 - Prob. 36ECh. 16 - Prob. 37ECh. 16 - Variable Cost Variances The following data reflect...Ch. 16 - Variable Cost Variances The records of Norton,...Ch. 16 - (Appendix used in requirement [b]) Variable Cost...Ch. 16 - (Appendix used in requirement [b]) Variable Cost...Ch. 16 - Fixed Cost Variances Information on Carney...Ch. 16 - Prob. 43ECh. 16 - Prob. 44ECh. 16 - Fixed Cost Variances Mint Company applies fixed...Ch. 16 - Prob. 46ECh. 16 - Prob. 47ECh. 16 - (Appendix used in requirement [c]) Comprehensive...Ch. 16 - Comprehensive Cost Variance Analysis NSF Lube is a...Ch. 16 - Overhead Variances Brice Corporation shows the...Ch. 16 - Solve for Master Budget Given Actual Results A new...Ch. 16 - Find Missing Data for Profit Variance Analysis...Ch. 16 - Find Data for Profit Variance Analysis Required...Ch. 16 - Prob. 54PCh. 16 - Prepare Flexible Budget Odessa, Inc., reports the...Ch. 16 - Prob. 56PCh. 16 - Prob. 57PCh. 16 - Prob. 58PCh. 16 - Prob. 59PCh. 16 - Prob. 60PCh. 16 - Direct Materials Information about direct...Ch. 16 - Prob. 62PCh. 16 - Prob. 63PCh. 16 - Prob. 64PCh. 16 - Overhead Cost and Variance Relationships...Ch. 16 - Prob. 66PCh. 16 - Prob. 67PCh. 16 - Ethics and Standard Costs Farmer Franks produces...Ch. 16 - Comprehensive Variance Problem The standard cost...Ch. 16 - Prob. 70PCh. 16 - Find Actual and Budget Amounts from Variances JW...Ch. 16 - Variance Computations with Missing Data The...Ch. 16 - Comprehensive Variance Problem Sweetwater Company...Ch. 16 - Prob. 74PCh. 16 - Prob. 75PCh. 16 - Keewee Company manufactures a single product for...
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- Please do not give solution in image format thankuarrow_forward1. The price variance for materials is the difference between the actual quantity of materials at the standard price and the standard quantity of materials at the standard price. A. True B. False 2. Standards are determined after the accounting period has ended, so comparisons can be made between standard costs (budgeted costs) and actual total costs and actual unit costs. A. True B. Falsearrow_forwardFischer Fabrication reported the following information concerning its direct materials: Direct materials purchased (actual) Standard cost of materials purchased Standard price tires actual amount of materials used Actual production Standard direct materials costs per unit produced Assume that Fischer Fabrication had no beginning finished goods inventory and only produced one product. A count of inventory showed that 4,552 units remained in the warehouse. $ 378,300 $361,500 $ 333,500 56,900 units $6 Required: a. Assume Fischer writes off all variances to Cost of Goods Sold. Prepare the entries Fischer would make to record and close out the variances. b. Assume Fischer prorates all variances to the appropriate accounts. Prepare the entries Fischer would make to record and close out the variances. Complete this question by entering your answers in the tabs below. Required A Required B Assume Fischer writes off all variances to Cost of Goods Sold. Prepare the entries Fischer would make to…arrow_forward
- Please do not give solution in image format thankuarrow_forwardRequirement 2. Compute the cost variance and the efficiency variance for direct materials and for direct labor. For manufacturing overhead, compute the variable overhead cost, variable overhead efficiency, fixed overhead cost, and fixed overhead volume variances. Round to the nearest dollar. Begin with the cost variances. Select the required formulas, compute the cost variances for direct materials and direct labor, and identify whether each variance is favorable (F) or unfavorable (U). (Round your answers to the nearest whole dollar. Abbreviations used: AC = actual cost; AQ = actual quantity; FOH = fixed overhead; SC = standard cost; SQ = standard quantity.) Formula Variance Direct materials cost variance Direct labor cost variance Next compute the efficiency variances. Select the required formulas, compute the efficiency variances for direct materials and direct labor, and identify whether each variance is favorable (F) or unfavorable (U). (Round your answers to the nearest whole…arrow_forwardPlease assist with requirements 1 and 2, providing explanations for each calculation in detail. Thanks! Requirements 1. Compute the variable overhead cost and efficiency variances and fixed overhead cost and volume variances. 2. Explain why the variances are favorable or unfavorable.arrow_forward
- Required informetion [The following information applies to the questions displayed below.j Saskatewan Can Company manufactures recyclable soft-drink cans. A unit of production is a case of 12 dozen cans. The following standards have been set by the production-engineering staff and the controller. Direct Labor: Direct Material: Quantity, 0.25 hour Quantity, 4 kilograms Price, $8.60 per kilogram Rate, $12.50 per hour Actual material purchases amounted to 200,000 kilograms at $0.640 per kilogram. Actual costs incurred In the production of 40,000 units were as follows: Direct labor: $137, 700 for 10,800 hours $188, 800 for 170,000 kilograms Direct material:arrow_forwardPlease do not give solution in image format thankuarrow_forwardIf materlals are purchased on account and the the actual price pald for materlals Is less than the standard price, the journal entry would Include: Multiple Choice debit to Work in Process, debit to Material Price Variance, credit to Raw Materials debit to Work in Process, credit to Material Price Variance, credit to Raw Materials debit to Raw Materials, credit to Material Price Variance, credit to Accounts Payable debit to Raw Materials, debit to Material Price Variance, credit to AcCounts Payablearrow_forward
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