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Concept explainers
Direct Material Price Variance:
The variance which is caused by the difference between the actual price per unit incurred and the expected price per unit to be incurred on the direct material is called the direct material price variance.
Direct Material Quantity Variance:
At the standard price, the difference between the actual quantity and standard quantity is termed as direct material quantity variance. The quantity variance measures the efficiency of management in utilizing the direct material for the production.
Direct Labor Rate Variance:
The difference between the actual rate per direct labor hour and standard rate per direct labor hours at the actual labor hour is called the direct labor rate variance. It measures the variance due the changes in the rate of direct labor hour.
Direct Labor Efficiency Variance:
The variance which is caused by the difference between the actual labor hours and standard labor hours allowed per unit is called the direct labor efficiency variance. It is computed by deducting the
To determine:
1. Computation of direct material price and quantity variances
2. Computation of direct labor rate and efficiency variances
Indicate the variances as favorable and unfavorable
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Answer to Problem 11E
Solution:
1. Huto Corporation has favorable variance of $34,500 in direct material price and unfavorable variance of $12,000 in direct material quantity.
2. The company has unfavorable variance in both direct labor rate and efficiency with $3,100 and $60,000 respectively.
Explanation of Solution
Explanation:
1. Direct material price and quantity variance
2. Direct labor rate and efficiency variance
Conclusion:
The direct material price variance is favorable and the quantity variance is unfavorable.
The both direct labor rate and efficiency variance are unfavorable .
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Chapter 23 Solutions
Loose Leaf for Fundamentals of Accounting Principles and Connect Access Card
- Net operating income should increase byarrow_forwardActivity-Based Product Costing Suppose that a surgical ward has gathered the following information for four nursing activities and two types of patients: Patient Category Driver Normal Intensive Activity Rate Treating patients Treatments 6,900 8,000 $4.00 Providing hygienic care Hygienic hours 6,300 18,100 5.00 Responding to requests Requests 32,000 80,000 2.00 Monitoring patients Monitoring hours 6,000 72,000 3.00 Required: 1. Determine the total nursing costs assigned to each patient category. Normal Intensive Costs Assigned $ 141,100 498,500 2. Output is measured in patient days. Assuming that the normal patient category uses 8,000 patient days and the intensive patient category uses 6,400 patient days, calculate the nursing cost per patient day for each type of patient. Round your answers to the nearest cent. Normal Intensive 17.64 per patient day 77.95 X per patient day 3. Conceptual Connection: The supervisor of the surgical ward has suggested that patient days is the only driver…arrow_forwardexpert of general accounting answerarrow_forward
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