Horngren's Cost Accounting, Student Value Edition Plus MyLab Accounting with Pearson eText - Access Card Package (16th Edition)
16th Edition
ISBN: 9780134642468
Author: Srikant M. Datar, Madhav V. Rajan
Publisher: PEARSON
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Chapter 7, Problem 7.19MCQ
Atlantic Company has a manufacturing facility in Brooklyn that manufactures robotic equipment for the auto industry. For Year 1, Atlantic collected the following information from its main production line:
| Actual quantity purchased | 200 units |
| Actual quantity used | 110 units |
| Units standard quantity | 100 units |
| Actual price paid | $ 8 per unit |
| Standard price | $ 10 per unit |
Atlantic isolates price variances at the time of purchase. What is the materials price variance for Year 1?
- 1. $400 favorable.
- 2. $400 unfavorable.
- 3. $220 favorable.
- 4. $220 unfavorable.
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Sunny Corporation has collected the following data for one of its products:
Direct materials standard (3 pounds per unit @ $0.40/lb.)
Actual direct materials purchased
Actual Direct Materials Used (AQU)
Actual Price (AP) paid per pound
How much is the direct materials price variance?
O A. $1,610 unfavorable
B. $2,240 favorable
C. $1,610 favorable
O D. $2,240 unfavorable
$1.20 per finished good
32,000 pounds
23,000 pounds
$0.47
Acme Inc. has the following information available:
Actual price paid for material
$1.00
Standard price for material
$1.10
Actual quantity purchased and used in production
100
Standard quantity for units produced
130
Actual labor rate per hour
$15
Standard labor rate per hour
$17
Actual hours
210
Standard hours for units produced
230
A. Compute the material price and quantity, and the labor rate and efficiency variances. Enter all amounts as positive numbers.
Material price variance
$fill in the blank 1
Material quantity variance
$fill in the blank 3
Labor rate variance
$fill in the blank 5
Labor efficiency variance
$fill in the blank 7
B. What are some possible causes for this combination of favorable and unfavorable variances?
Acme Inc. has the following information available:
Actual price paid for material
$0.90
Standard price for material
$1.00
Actual quantity purchased and used in production
90
Standard quantity for units produced
100
Actual labor rate per hour
$14
Standard labor rate per hour
$16
Actual hours
190
Standard hours for units produced
220
A. Compute the material price and quantity, and the labor rate and efficiency variances. Enter all amounts as positive numbers.
Material price variance
$fill in the blank 1
Material quantity variance
$fill in the blank 3
Labor rate variance
$fill in the blank 5
Labor efficiency variance
$fill in the blank 7
Chapter 7 Solutions
Horngren's Cost Accounting, Student Value Edition Plus MyLab Accounting with Pearson eText - Access Card Package (16th Edition)
Ch. 7 - What is the relationship between management by...Ch. 7 - What are two possible sources of information a...Ch. 7 - Distinguish between a favorable variance and an...Ch. 7 - What is the key difference between a static budget...Ch. 7 - Why might managers find a flexible-budget analysis...Ch. 7 - Describe the steps in developing a flexible...Ch. 7 - List four reasons for using standard costs.Ch. 7 - How might a manager gain insight into the causes...Ch. 7 - List three causes of a favorable direct materials...Ch. 7 - Describe three reasons for an unfavorable direct...
Ch. 7 - How does variance analysis help in continuous...Ch. 7 - Why might an analyst examining variances in the...Ch. 7 - Prob. 7.13QCh. 7 - When inputs are substitutable, how can the direct...Ch. 7 - Benchmarking against other companies enables a...Ch. 7 - Metal Shelf Companys standard cost for raw...Ch. 7 - All of the following statements regarding...Ch. 7 - Amalgamated Manipulation Manufacturings (AMM)...Ch. 7 - Atlantic Company has a manufacturing facility in...Ch. 7 - Basix Inc. calculates direct manufacturing labor...Ch. 7 - Flexible budget. Sweeney Enterprises manufactures...Ch. 7 - Flexible budget. Bryant Companys budgeted prices...Ch. 7 - Flexible-budget preparation and analysis. Bank...Ch. 7 - Flexible budget, working backward. The Clarkson...Ch. 7 - Flexible-budget and sales volume variances....Ch. 7 - Price and efficiency variances. Sunshine Foods...Ch. 7 - Materials and manufacturing labor variances....Ch. 7 - Direct materials and direct manufacturing labor...Ch. 7 - Price and efficiency variances, journal entries....Ch. 7 - Materials and manufacturing labor variances,...Ch. 7 - Journal entries and T-accounts (continuation of...Ch. 7 - Price and efficiency variances, benchmarking....Ch. 7 - Static and flexible budgets, service sector....Ch. 7 - Flexible budget, direct materials, and direct...Ch. 7 - Variance analysis, nonmanufacturing setting. Joyce...Ch. 7 - Comprehensive variance analysis review. Ellis...Ch. 7 - Possible causes for price and efficiency...Ch. 7 - Material-cost variances, use of variances for...Ch. 7 - Direct manufacturing labor and direct materials...Ch. 7 - Direct materials efficiency, mix, and yield...Ch. 7 - Direct materials and manufacturing labor...Ch. 7 - Direct materials and manufacturing labor...Ch. 7 - Use of materials and manufacturing labor variances...Ch. 7 - Direct manufacturing labor variances: price,...Ch. 7 - Direct-cost and selling price variances. MicroDisk...Ch. 7 - Variances in the service sector. Derek Wilson...Ch. 7 - Prob. 7.47P
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