Financial And Managerial Accounting
15th Edition
ISBN: 9781337902663
Author: WARREN, Carl S.
Publisher: Cengage Learning,
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Chapter 23, Problem 10DQ
If variances are recorded in the accounts at the time the
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The following direct materials and direct labor data pertain to the operations of Sandhill Company for the month of August.
Costs
Actual labor rate
Actual materials price
Standard labor rate
Standard materials price
$13
$120
$12.50
$124
Quantities
per hour
per ton
per hour
per ton
Actual hours incurred and used
Actual quantity of materials purchased and used
Standard hours used
Standard quantity of materials used
4,900 hours
2,000 tons
4,960 hours
1,990 tons
Explain who is in the best position in the organization to influence each of these variances.
a. Direct Materials Price Variance
b. Direct Materials Quantity Variance
c. Direct Labor Rate Variance
d. Direct Labor Time Variance
Why should a production-volume variance (PVV) that is material be prorated among work-in-process, finished goods, cost and cost of goods sold rather than writing it all off to cost of goods sold?
a.
If a PVV is always written off to cost of goods sold, then the assets on the balance sheet would be the same as actual costs.
b.
If a PVV is always written off to cost of goods sold, then the liabilities on the balance sheet would be overstated.
c.
If a PVV is always written off to cost of goods sold, then the balances in the inventory accounts on the balance sheet would be most accurate.
d.
If a PVV is always written off to cost of goods sold, a company could set its standard costs to either increase or decrease operating incomes.
Chapter 23 Solutions
Financial And Managerial Accounting
Ch. 23 - What are the basic objectives in the use of...Ch. 23 - What is meant by reporting by the principle of...Ch. 23 - Prob. 3DQCh. 23 - Prob. 4DQCh. 23 - A. What are the two variances between the actual...Ch. 23 - A new assistant controller recently was heard to...Ch. 23 - Would the use of standards be appropriate in a...Ch. 23 - Prob. 8DQCh. 23 - At the end of the period, the factory overhead...Ch. 23 - If variances are recorded in the accounts at the...
Ch. 23 - Direct materials variances Bellingham Company...Ch. 23 - Direct labor variances Bellingham Company produces...Ch. 23 - Factory overhead controllable variance Bellingham...Ch. 23 - Factory overhead volume variance Bellingham...Ch. 23 - Standard cost journal entries Bellingham Company...Ch. 23 - Income statement with variances Prepare an income...Ch. 23 - Crazy Delicious Inc. produces chocolate bars. The...Ch. 23 - Atlas Furniture Company manufactures designer home...Ch. 23 - Salisbury Bottle Company manufactures plastic...Ch. 23 - The following data relate to the direct materials...Ch. 23 - De Soto Inc. produces tablet computers. The...Ch. 23 - Standard direct materials cost per unit from...Ch. 23 - H.J. Heinz Company uses standards to control its...Ch. 23 - Direct labor variances The following data relate...Ch. 23 - Glacier Bicycle Company manufactures commuter...Ch. 23 - Ada Clothes Company produced 40,000 units during...Ch. 23 - Mexicali On the Go Inc. owns and operates food...Ch. 23 - Direct materials and direct labor variances At the...Ch. 23 - Flexible overhead budget Leno Manufacturing...Ch. 23 - Flexible overhead budget Wiki Wiki Company has...Ch. 23 - Factory overhead cost variances The following data...Ch. 23 - Thomas Textiles Corporation began November with a...Ch. 23 - Prob. 17ECh. 23 - Factory overhead cost variance report Tannin...Ch. 23 - Recording standards in accounts Cioffi...Ch. 23 - Prob. 20ECh. 23 - Income statement indicating standard cost...Ch. 23 - Rockport Industries Inc. gathered the following...Ch. 23 - Dickinsen Company gathered the following data for...Ch. 23 - Rosenberry Company computed the following revenue...Ch. 23 - Lowell Manufacturing Inc. has a normal selling...Ch. 23 - Shasta Fixture Company manufactures faucets in a...Ch. 23 - Flexible budgeting and variance analysis I Love My...Ch. 23 - Direct materials, direct labor, and factory...Ch. 23 - Factory overhead cost variance report Tiger...Ch. 23 - CodeHead Software Inc. does software development....Ch. 23 - Direct materials and direct labor variance...Ch. 23 - Flexible budgeting and variance analysis Im Really...Ch. 23 - Direct materials, direct labor, and factory...Ch. 23 - Factory overhead cost variance report Feeling...Ch. 23 - Prob. 5PBCh. 23 - Prob. 1COMPCh. 23 - Advent Software uses standards to manage the cost...Ch. 23 - Admissions time variance Valley Hospital began...Ch. 23 - United States Postal Service: Mail sorting time...Ch. 23 - Direct labor time variance Maywood City Police...Ch. 23 - Ethics in action Dash Riprock is a cost analyst...Ch. 23 - Variance interpretation Vanadium Audio Inc. is a...Ch. 23 - MinnOil performs oil changes and other minor...Ch. 23 - Prob. 2CMACh. 23 - Frisco Company recently purchased 108,000 units of...Ch. 23 - JoyT Company manufactures Maxi Dolls for sale in...
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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
- How is the total direct labor variance calculated?arrow_forwardHow do price and quantity variances relate to materials costs?arrow_forwardA. What are the two variances between the actual cost and the standard cost for direct labor? B. Who generally has control over the direct labor cost variances?arrow_forward
- What is the direct labor time variance?arrow_forwardUse the information provided to answer the questions. All material purchased was used in production. A. What is the standard price paid for materials? B. What is the direct materials quantity variance? C. What is the total direct materials cost variance? D. If the direct materials price variance was unfavorable, what would be the standard price?arrow_forwardHow are standards for materials and labor costs determined?arrow_forward
- What is the most important purpose of the cost of production report?arrow_forwardResponsibility for the materials price variance typically belongs to a. Marketing b. Personnel c. Production d. Purchasingarrow_forwardIf variances are recorded in the accounts at the time the manufacturing costs are incurred, what does a debit balance in Direct Materials Price Variance represent?arrow_forward
- What are the two variances between the actual cost and the standard cost for direct materials?arrow_forwardThe material price variance is computed by multiplying the difference between the actual price and the standard price by the actual quantity of materials used in production. True Falsearrow_forwardSubject: acountingarrow_forward
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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