Variances: The variances are used to calculate the variation of actual costs from standard costs by comparing these two for a certain period or a production cycle. It is a budgetary control tool. To indicate: The variances as favorable or unfavorable.

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Answer 1

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Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

Chapter 25, Problem 25CDCP

(a)

To determine

Variances:

The variances are used to calculate the variation of actual costs from standard costs by comparing these two for a certain period or a production cycle. It is a budgetary control tool.

To indicate: The variances as favorable or unfavorable.

(b)

To determine

To calculate: The eight variances given in part (a).

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Question 2 U. Richards does not keep his books on the double entry system. His bank summary amount for 2010 is as follows: Balance 1.1.2010 1890 Receipts from $44656 debtors Creditors Loan from U. Miller $2.000 Rates Rent Drawings Cash withdrawn from bank $540 0 Payment to Trade $316 95 2750 1316 3095 1642 Sundry Expense Records of cash paid were sundry $122, trade creditors $642. Cash sales amounted to cash drawings were $5289. The following information is also available: 31.12.201 31.12.2 0 011 Cash in hand $48 $93 Trade creditors $4896 $5091 Accounts Receivables 60 $71 13 32 Rent Owing $250 Rates in Advance $282 $312 Motor van (at valuation) 2800 2400 Stock 11163 13021 Required: A. Statement of Affairs. (to find opening capital as at 31.12.2010) B. Cash Account & Bank Account. C. Accounts Receivables & Accounts Payables Control A/Cs. D. Income Statement for the year ended 31 December 2011.

Answer 2

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Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

Chapter 25, Problem 25CDCP

(a)

To determine

Variances:

The variances are used to calculate the variation of actual costs from standard costs by comparing these two for a certain period or a production cycle. It is a budgetary control tool.

To indicate: The variances as favorable or unfavorable.

(b)

To determine

To calculate: The eight variances given in part (a).

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Answer 3

Question

Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

Chapter 25, Problem 25CDCP

(a)

To determine

Variances:

The variances are used to calculate the variation of actual costs from standard costs by comparing these two for a certain period or a production cycle. It is a budgetary control tool.

To indicate: The variances as favorable or unfavorable.

(b)

To determine

To calculate: The eight variances given in part (a).

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Answer 4

Question

Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

Chapter 25, Problem 25CDCP

(a)

To determine