Fundamentals of Cost Accounting
6th Edition
ISBN: 9781260708783
Author: LANEN, William
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Chapter 17, Problem 41P
Variable Cost Variances: Materials Purchased and Used Are Not Equal
Griffen Company makes pipe using metal. The company uses a
The standard cost sheet for a unit of pipe follows:
August financial results show that the average purchase price of metal was $5.30 per pound. The purchase price variance $34,590 unfavorable. The variable overhead efficiency variance was 8,000 unfavorable. Good output produced totaled 15,000 units.
Required
- a. How many pounds of metal were purchased in August?
- b. What was the direct material efficiency variance in August?
- c. How many pounds of metal were used in August?
- d. Which, if either, of the direct material variances (price or efficiency) would you recommend Griffen management to investigate? Why?
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Maney Televisions utilizes a traditional overhead allocation method, and has determined that overhead costs are driven by direct labor hours. Relevant cost information is provided below.
Total estimated overhead costs
$650,000
Total estimated DL hours
130,000
Actual overhead costs
$640,300
Actual DL hours
127,500
The unadjusted cost of goods sold balance at the end of the year is $56,000.
What is the overhead variance? Please provide your answer as a positive number rounded to the nearest whole dollar.
Are the answers correct?
Rainbow Company uses standard cost system for its production process. Rainbow Company applies overhead based on direct labor hours. The following information is available for October
Standard:
Direct labor hours per unit
2.20
variable overhead per hour
P2.50
fixed overhead per hour (based on 11,990 DLHs)
3.00
Actual:
Units produced
4,400
Direct labor hours
8,800
Variable Overhead
P29,950
Fixed Overhead
42,300
1. What is the variable overhead spending variance?
2. Using the three-variance approach, what is the efficiency variance?Required to answer. Single choice.
3. Using the two-variance approach, what is the controllable variance?
Chapter 17 Solutions
Fundamentals of Cost Accounting
Ch. 17 - What complication arises in variance analysis when...Ch. 17 - Variance analysis can be useful in a manufacturing...Ch. 17 - How would you recommend accounting for variances...Ch. 17 - What does a manager learn by computing an industry...Ch. 17 - Why is there no efficiency variance for revenues?Ch. 17 - For what decisions would a manager want to know...Ch. 17 - If the sales activity or materials efficiency...Ch. 17 - Prob. 8RQCh. 17 - Prob. 9RQCh. 17 - What is the advantage of recognizing materials...
Ch. 17 - How could a professional sports firm use the mix...Ch. 17 - Prob. 12CADQCh. 17 - How could a hospital firm use the mix variance to...Ch. 17 - Prob. 14CADQCh. 17 - There is no reason to investigate favorable...Ch. 17 - Prob. 16CADQCh. 17 - Consider a firm in the sharing economy, such as...Ch. 17 - Prob. 18ECh. 17 - Prob. 19ECh. 17 - Prob. 20ECh. 17 - Variable Cost Variances: Materials Purchased and...Ch. 17 - Prob. 22ECh. 17 - Industry Volume and Market Share Variances DB Ice...Ch. 17 - Olive Tree Products sold 72,000 units during the...Ch. 17 - Prob. 25ECh. 17 - Sales Mix and Quantity Variances A-Zone Media...Ch. 17 - Prob. 27ECh. 17 - Sales Mix and Quantity Variances The restaurant at...Ch. 17 - Sales Mix and Quantity Variances Chow-4-Hounds...Ch. 17 - Materials Mix and Yield Variances Stacy, Inc.,...Ch. 17 - Materials Mix and Yield Variances Johns...Ch. 17 - Labor Mix and Yield Variances Matts Eat N Run has...Ch. 17 - Flexible Budgeting, Service Organization KB is a...Ch. 17 - Prob. 34ECh. 17 - Prob. 35ECh. 17 - Sales Price and Activity Variances EZ-Tax is a tax...Ch. 17 - Write a memo to the senior manager of EZ-Tax...Ch. 17 - Variable Cost Variances The standard direct labor...Ch. 17 - Refer to the information in Exercise...Ch. 17 - Prob. 40PCh. 17 - Variable Cost Variances: Materials Purchased and...Ch. 17 - Industry Volume and Market Share Variances:...Ch. 17 - Industry Volume and Market Share: Missing Data The...Ch. 17 - Sales Mix and Quantity Variances Lake Cellars...Ch. 17 - Analyze Performance for a Restaurant Dougs Diner...Ch. 17 - Nonmanufacturing Cost Variances FSBCU is a...Ch. 17 - Performance Evaluation in Service Industries Bay...Ch. 17 - Refer to the information in Problem...Ch. 17 - Prob. 49PCh. 17 - Refer to the data for the Peninsula Candy Company...Ch. 17 - Materials Mix and Yield Variances Plano Products...Ch. 17 - Pinnuck Products makes a liquid solvent using two...Ch. 17 - Labor Mix and Yield Variances Matthews Bros, is a...Ch. 17 - Refer to the information in Problem...Ch. 17 - Derive Amounts for Profit Variance Analysis...Ch. 17 - Flexible Budget Oak Hill Township operates a motor...
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