FINANCIAL AND MANAGERIAL ACCOUNTING
9th Edition
ISBN: 9781260985375
Author: Wild
Publisher: MCG
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Chapter 21, Problem 6PSA
Problem 21-6AA Materials, labor, and
Boss Company’s
| Standard direct materials cost……………………………………………. | $ 100.000 |
| Direct materials quantity variance (unfavorable)……………………….. | 3.000 |
| Direct materials price variance (favorable) ……………………………….. | 500 |
| Actual direct labor cost ……………………………………………………. | 90.000 |
| Direct labor efficiency variance (favorable) ………………………………. | 7.000 |
| Direct labor rato variance (unfavorable). ………………………………….. | 1.200 |
| Actual overhead cost ………………………………………………………. | 375.000 |
| Volume variance (unfavorable) ……………………………………………. | 12.000 |
| Controllable variance (unfavorable)………………………………………….. | 9.000 |
Required
- Prepare December 31 journal entries to record the company’s costs and variances for the month. (Do not prepare the
journal entry to close the variances.) Check (1) Dr. Work in process Inventory (for overhead), $354.000
- Identify the variances that would attract the attention of a manager who uses management by exception. Explain what action (s) the manager should consider.
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Kellogg Corporation uses a single raw material in its production process. The standard price for a unit of material is $3.25. During the month, the company purchased and used 680 units of this material at a price of $3.40 per unit. The standard quantity required per finished product is 2 units, and during the month, the company produced 325 finished units. How much was the material quantity variance?
I am searching for the accurate solution to this financial accounting problem with the right approach.
Chapter 21 Solutions
FINANCIAL AND MANAGERIAL ACCOUNTING
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What is variance analysis?; Author: Corporate finance institute;https://www.youtube.com/watch?v=SMTa1lZu7Qw;License: Standard YouTube License, CC-BY