![Financial & Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781337119207/9781337119207_largeCoverImage.gif)
Financial & Managerial Accounting
14th Edition
ISBN: 9781337119207
Author: Carl Warren, James M. Reeve, Jonathan Duchac
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Concept explainers
Textbook Question
thumb_up100%
Chapter 22, Problem 3ADM
Direct labor time variance
Maywood City Police uses
Police Activity | Standard Hours per Activity | Actual Activities for Year | Total Employee Hours |
Theft | 0.60 | 7,000 | 4,200 |
Arrest | 1.50 | 18,000 | 27,000 |
Patrol activities | 0.30 | 9,000 | 2,700 |
33,900 |
The police are paid $25 per hour.
The actual amount of hours per activity for the year were as follows:
Police Activity | Actual Hours per Activity |
Theft | 0.75 |
Arrest | 2.00 |
Patrol activities | 0.40 |
- A. Determine the total budgeted cost to perform the three police activities.
- B. Determine the total actual cost to perform the three police activities.
- C. Determine the direct labor time variance.
- D. What does the time variance suggest?
Expert Solution & Answer
![Check Mark](/static/check-mark.png)
Trending nowThis is a popular solution!
![Blurred answer](/static/blurred-answer.jpg)
Students have asked these similar questions
Given the following information, calculate the purchasing department's efficiency
variance.
Standard number of transaction per day
Standard labor cost per day
Actual number of days for processing transactions
Actual number of transactions processed
Actual labor cost per day
Multiple choice question.
$2,400 favorable
$4,400 favorable
$4,400 unfavorable
$2,400 unfavorable
20
$200
120
1,960
$180
9 Evaluating Variances from Standard Costs
Obj. 6
MAD 9-4 Analyze Maywood City Police Department's labor time variance
frequency to establish the expected cost to serve these activities.
Actual Activities Total Employee
for Year
Standard Hours
Hours
Police Activity
per Activity
7,000
4,200
Theft
0.60
18,000
27,000
Arrest
1.50
9,000
2,700
Patrol activities
0.30
33,900
The police are paid $25 per
hour.
The actual amount of hours per activity for the year were as follows:
Police Activity
Actual Hours per Activity
Theft
0.75
Arrest
2.00
Patrol activities
0.40
a. Determine the total budgeted cost to perform the three police activities.
b. Determine the total actual cost to perform the three police activities.
C. Determine the direct labor time variance.
d.
What does the time variance suggest?
A manager prepared the following table by which to analyze labor costs for the month: Actual hours at Actual rate is P10,000; Actual hours at Standard rate is P9,800 and Standard hours at Standard rate, P 8,820. What variance is P1,180? *
idle labor variance
labor efficiency variance
labor spending variance
total labor variance
Chapter 22 Solutions
Financial & Managerial Accounting
Ch. 22 - What are the basic objectives in the use of...Ch. 22 - What is meant by reporting by the principle of...Ch. 22 - Prob. 3DQCh. 22 - The materials cost variance report for Nickols...Ch. 22 - Prob. 5DQCh. 22 - Prob. 6DQCh. 22 - Prob. 7DQCh. 22 - A. Describe the two variances between the actual...Ch. 22 - If variances are recorded in the accounts at the...Ch. 22 - Briefly explain why firms might use non financial...
Ch. 22 - Direct materials variances Bellingham Company...Ch. 22 - Direct labor variances Bellingham (Company...Ch. 22 - Factory overhead controllable variance Bellingham...Ch. 22 - Factory overhead volume variance Bellingham...Ch. 22 - Standard cost journal entries Bellingham Company...Ch. 22 - Income statement with variances Prepare an income...Ch. 22 - Prob. 22.7BECh. 22 - Standard direct materials cost per unit Roanoke...Ch. 22 - Standard product cost Sana Rosa Furniture Company...Ch. 22 - Budget performance report Genie in a Bottle...Ch. 22 - Direct materials variances The following data...Ch. 22 - Direct materials variances Silicone Engine Inc....Ch. 22 - Standard direct materials cost per unit from...Ch. 22 - Standard product cost, direct materials variance...Ch. 22 - Direct labor variances The following data relate...Ch. 22 - Direct labor variances La Batre Bicycle Company...Ch. 22 - Direct labor variances Greeson Clothes Company...Ch. 22 - Direct labor variances for a service company...Ch. 22 - Direct materials and direct labor variances At the...Ch. 22 - Flexible overhead budget Leno Manufacturing...Ch. 22 - Flexible overhead budget Wiki Wiki Company has...Ch. 22 - Factory overhead cost variances The following data...Ch. 22 - Factory overhead cost variances Blumen Textiles...Ch. 22 - Factory overhead variance corrections The data...Ch. 22 - Factory overhead cost variance report Tannin...Ch. 22 - Recording standards in accounts Cioffi...Ch. 22 - Recording standards in accounts "The Assembly...Ch. 22 - Prob. 22.21EXCh. 22 - Nonfinancial performance measures Diamond Inc. is...Ch. 22 - Prob. 22.23EXCh. 22 - Direct materials and direct labor variance...Ch. 22 - Flexible budgeting and variance analysis I Love My...Ch. 22 - Direct materials, direct labor, and factory...Ch. 22 - Factory overhead cost variance report Tiger...Ch. 22 - Standards for nonmanufacturing expenses Code Head...Ch. 22 - Direct materials and direct labor variance...Ch. 22 - Flexible budgeting and variance analysis I'm...Ch. 22 - Direct materials, direct labor, and factory...Ch. 22 - Factory overhead cost variance report Feeling...Ch. 22 - Prob. 22.5BPRCh. 22 - Genuine Spice Inc. began operations on January 1...Ch. 22 - Admissions time variance Valley Hospital began...Ch. 22 - United States Postal Service: Mail sorting time...Ch. 22 - Direct labor time variance Maywood City Police...Ch. 22 - Ethics in Action Dash Riprock is a cost analyst...Ch. 22 - Prob. 22.3TIF
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Direct labor variances The following data relate to labor cost for production of 20,000 cellular telephones: A. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance. B. Discuss what might have caused these variances.arrow_forwardFactory overhead cost variances The following data relate to factory overhead cost for the production of 10,000 computers: If productive capacity of 100% was 15,000 hours and the total factory overhead cost budgeted at the level of 14,000 standard hours was 356,000, determine the variable factory overhead controllable variance, fixed factory overhead volume variance, and total factory overhead cost variance. The fixed factory overhead rate was 6.00 per hour.arrow_forwardDirect materials and direct labor variance analysis Lenni Clothing Co. manufactures clothing in a small manufacturing facility. Manufacturing has 25 employees. Each employee presently provides 40 hours of productive labor per week. Information about a production week is as follows: Instructions Determine (A) the standard cost per unit for direct materials and direct labor; (B) the price variance, quantity variance, and total direct materials cost variance; and (C) the rate variance, time variance, and total direct labor cost variance.arrow_forward
- Uchdorf Manufacturing just completed a study of its purchasing activity with the objective of improving its efficiency. The driver for the activity is number of purchase orders. The following data pertain to the activity for the most recent year: Activity supply: five purchasing agents capable of processing 2,400 orders per year (12,000 orders) Purchasing agent cost (salary): 45,600 per year Actual usage: 10,600 orders per year Value-added quantity: 7,000 orders per year Required: 1. Calculate the volume variance and explain its significance. 2. Calculate the unused capacity variance and explain its use. 3. What if the actual usage drops to 9,000 orders? What effect will this have on capacity management? What will be the level of spending reduction if the value-added standard is met?arrow_forwardOverhead variances, service sector. Cavio is a cloud service provider that offers computing resources to handle enterprisewide applications. For March 2017, Cavio estimates that it will provide 18,000 RAM hours of services to clients. The budgeted variable overhead rate is $6 per RAM hour. At the end of March, there is a $500 favorable spending variance for variable overhead and a $1,575 unfavorable spending variance for xed overhead. For the services actually provided during the month, 14,850 RAM hours are budgeted and 15,000 RAM hours are actually used. Total actual overhead costs are $119,875.arrow_forwardOverhead variances, service sector. Cavio is a cloud service provider that offers computing resources to handle enterprise-wide applications. For March 2017, Cavio estimates that it will provide 18,000 RAM hours of services to clients. The budgeted variable overhead rate is $6 per RAM hour. At the end of March, there is a $500 favorable spending variance for variable overhead and a $1,575 unfavorable spending variance for fixed overhead. For the services actually provided during the month, 14,850 RAM hours are budgeted and 15,000 RAM hours are actually used. Total actual overhead costs are $119,875.arrow_forward
- Management should focus its sales and production efforts on the product or products that will provide a. the lowest product costs b. the lowest direct labor hours c. the highest sales revenue d. the maximum contribution margin The following data relate to direct labor costs for the current period: Standard costs 7,500 hours at $11.70 Actual costs 6,000 hours at $12.00 What is the direct labor time variance? a. $18,000 favorable b. $17,550 unfavorable c. $17,550 favorable d. $18,000 unfavorable Which of the following is not a factory overhead allocation method? a. factory costing b. multiple departmental rates c. activity-based costing d. single plantwide ratearrow_forwardLavage Rapide is a Canadian company that owns and operates a large automatic car wash facility near Montreal. The following table provides estimates concerning the company's costs: Fixed Cost Cost per Car per Month Washed Cleaning supplies Electricity $ 0. 60 $ 0. 08 $ 0. 25 $ 0. 20 $ 1,300 Maintenance Wages and salaries Depreciation $ 4,400 $ 8,100 $ 1,900 $ 1,600 Rent Administrative expenses $ 0.03 For example, electricity costs should be $1,300 per month plus $0.08 per car washed. The company expects to wash 8,100 cars in August and to collect an average of $6.50 per car washed. The actual operating results for August are as follows: Lavage Rapide Income Statement For the Month Ended August 31 Actual cars washed 8,200 Revenue $ 54,750 Expenses: Cleaning supplies Electricity 5,360 1,918 2,265 6,380 8,100 2,100 Maintenance Wages and salaries Depreciation Rent Administrative expenses Total expense 1,743 27,866 $ 26,884 Net operating income Required: Prepare a flexible budget…arrow_forwardParkdale Courier Service employs several delivery specialists. The following reports the information for these specialists for April: $18.20 per hour $19.30 per hour 16,400 hours $ 14,560 U Standard rate Actual rate paid. Standard hours allowed for actual deliveries Labor efficiency variance Required: Based on these data, what was the number of actual hours worked and what was the labor price variance? Note: Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option. Actual hours worked Labor price variance hoursarrow_forward
- Rahularrow_forwardRequired information [The following information applies to the questions displayed below.] AirPro Corporation reports the following for this period. Actual total overhead Standard overhead applied Budgeted (flexible) variable overhead rate Budgeted fixed overhead Predicted activity level Actual activity level Volume variance $ 28,225 $ 31,620 Volume Variance $ 2.10 per unit $ 11,500 Compute the volume variance and identify it as favorable or unfavorable. 11,500 units 10,200 unitsarrow_forward7arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Financial & Managerial AccountingAccountingISBN:9781337119207Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage LearningManagerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College PubFinancial And Managerial AccountingAccountingISBN:9781337902663Author:WARREN, Carl S.Publisher:Cengage Learning,
- Cornerstones of Cost Management (Cornerstones Ser...AccountingISBN:9781305970663Author:Don R. Hansen, Maryanne M. MowenPublisher:Cengage Learning
![Text book image](https://www.bartleby.com/isbn_cover_images/9781337119207/9781337119207_smallCoverImage.gif)
Financial & Managerial Accounting
Accounting
ISBN:9781337119207
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Cengage Learning
![Text book image](https://www.bartleby.com/isbn_cover_images/9781337912020/9781337912020_smallCoverImage.jpg)
Managerial Accounting
Accounting
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:South-Western College Pub
![Text book image](https://www.bartleby.com/isbn_cover_images/9781337902663/9781337902663_smallCoverImage.jpg)
Financial And Managerial Accounting
Accounting
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:Cengage Learning,
![Text book image](https://www.bartleby.com/isbn_cover_images/9781305970663/9781305970663_smallCoverImage.gif)
Cornerstones of Cost Management (Cornerstones Ser...
Accounting
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Cengage Learning
What is variance analysis?; Author: Corporate finance institute;https://www.youtube.com/watch?v=SMTa1lZu7Qw;License: Standard YouTube License, CC-BY