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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 materials price and quantity variances and classify each as favorable or unfavorable.
2. Compute the direct labor rate and efficiency variances and classify each as favorable or unfavorable.
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Chapter 23 Solutions
Fundamental Accounting Principles -Hardcover
- Carlisle Manufacturing, which uses a calendar year, purchased a machine for $60,000 on January 5, 2015. It estimates the machine will have a useful life of 10 years and a $6,000 residual value. The machine is expected to produce 250,000 units during its useful life. The actual number of units produced were 22,000 during 2015, 31,000 during 2016, 24,000 during 2017, and 30,000 during 2018. Using the straight-line method, what is the book value at December 31, 2017? Answerarrow_forwardWhat is the book value at December 31?arrow_forwardWhat is the direct labor time variancearrow_forward
- Ingram Enterprises has variable expenses equal to 65% of sales. At a $500,000 sales level, the degree of operating leverage is 4.5. If sales increase by $50,000, what will be the new degree of operating leverage?helparrow_forwardWhat is the company degree of operating leverage?arrow_forwardcan you please solve thisarrow_forward
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