16th Edition

ISBN: 9780134475998

Author: Rajan

Publisher: YUZU

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Chapter 7, Problem 7.32E

Price and efficiency variances, benchmarking. Nantucket Enterprises manufactures insulated cold beverage cups printed with college and corporate logos, which it distributes nationally in lots of 12 dozen cups. In June 2017, Nantucket produced 5,000 lots of its most popular line of cups, the 24-ounce lidded tumbler, at each of its two plants, which are located in Providence and Amherst. The production manager, Shannon Bryant, asks her assistant, Joel Hudson, to find out the precise per-unit budgeted variable costs at the two plants and the variable costs of a competitor, Beverage Mate, who offers similar-quality tumblers at cheaper prices. Hudson pulls together the following information for each lot:

Chapter 7, Problem 7.32E, Price and efficiency variances, benchmarking. Nantucket Enterprises manufactures insulated cold

1. What is the budgeted variable cost per lot at the Providence Plant, the Amherst Plant, and at Beverage Mate?

Required

2. Using the Beverage Mate data as the standard, calculate the direct materials and direct manufacturing labor price and efficiency variances for the Providence and Amherst plants.
3. What advantage does Nantucket get by using Beverage Mate’s benchmark data as standards in calculating its variances? Identify two issues that Bryant should keep in mind in using the Beverage Mate data as the standards.

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Chapter 7, Problem 7.31E

Chapter 7, Problem 7.33E

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Chapter 7 Solutions

EBK HORNGREN'S COST ACCOUNTING

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...

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Solution Summary: The author analyzes the variable cost of Providence Plant, Amherst Plant and Beverage Mate.

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