Management by exception: The process of analyzing the difference between expected performance and actual performance and determining that part of the business operation where the attention of management is required utmost is called management by exception. 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. To determine : 1. The journal entry to record the material cost and material variances. 2. Preparation of adjusting journal entry to close the variance accounts. 3. Determine the variance that should be investigated according to the management by exception.

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Answer 1

Question

Chapter 23, Problem 14E

To determine

Management by exception:

The process of analyzing the difference between expected performance and actual performance and determining that part of the business operation where the attention of management is required utmost is called management by exception.

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.

To determine:

1. The journal entry to record the material cost and material variances.

2. Preparation of adjusting journal entry to close the variance accounts.

3. Determine the variance that should be investigated according to the management by exception.

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Answer 2

Question

Chapter 23, Problem 14E

To determine

Management by exception:

The process of analyzing the difference between expected performance and actual performance and determining that part of the business operation where the attention of management is required utmost is called management by exception.

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.

To determine:

1. The journal entry to record the material cost and material variances.

2. Preparation of adjusting journal entry to close the variance accounts.

3. Determine the variance that should be investigated according to the management by exception.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 3

Question

Chapter 23, Problem 14E

To determine

Management by exception:

The process of analyzing the difference between expected performance and actual performance and determining that part of the business operation where the attention of management is required utmost is called management by exception.

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.

To determine:

1. The journal entry to record the material cost and material variances.

2. Preparation of adjusting journal entry to close the variance accounts.

3. Determine the variance that should be investigated according to the management by exception.

Expert Solution & Answer

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Answer 4

Question

Chapter 23, Problem 14E

To determine

Management by exception:

The process of analyzing the difference between expected performance and actual performance and determining that part of the business operation where the attention of management is required utmost is called management by exception.

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.

To determine:

1. The journal entry to record the material cost and material variances.

2. Preparation of adjusting journal entry to close the variance accounts.

3. Determine the variance that should be investigated according to the management by exception.

Expert Solution & Answer

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Answer 5

Chapter 23, Problem 14E

To determine

Management by exception:

The process of analyzing the difference between expected performance and actual performance and determining that part of the business operation where the attention of management is required utmost is called management by exception.

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.

To determine:

1. The journal entry to record the material cost and material variances.

2. Preparation of adjusting journal entry to close the variance accounts.

3. Determine the variance that should be investigated according to the management by exception.

Answer 6

Chapter 23, Problem 14E

To determine

Management by exception:

The process of analyzing the difference between expected performance and actual performance and determining that part of the business operation where the attention of management is required utmost is called management by exception.

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.

To determine:

1. The journal entry to record the material cost and material variances.

2. Preparation of adjusting journal entry to close the variance accounts.

3. Determine the variance that should be investigated according to the management by exception.

Answer 7

Chapter 23, Problem 14E

To determine

Management by exception:

The process of analyzing the difference between expected performance and actual performance and determining that part of the business operation where the attention of management is required utmost is called management by exception.

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.

To determine:

1. The journal entry to record the material cost and material variances.

2. Preparation of adjusting journal entry to close the variance accounts.

3. Determine the variance that should be investigated according to the management by exception.

Answer 8

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Answer 9

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Answer 10

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Answer 11

Ch. 23 - Prob. 1DQ Ch. 23 - Prob. 2DQ Ch. 23 - Prob. 3DQ Ch. 23 - Prob. 4DQ Ch. 23 - Prob. 5DQ Ch. 23 - Prob. 6DQ Ch. 23 - Prob. 7DQ Ch. 23 - Prob. 8DQ Ch. 23 - Prob. 9DQ Ch. 23 - Prob. 10DQ

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