19th Edition

ISBN: 9781947172609

Author: OpenStax

Publisher: OpenStax College

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Textbook Question

Chapter 8, Problem 1EA

Moisha is developing material standards for her company. The operations manager wants grade A widgets because they are the easiest to work with and are the quality the customers want. Grade B will not work because customers do not want the lower grade, and it takes more time to assemble the product than with grade A materials. Moisha calls several suppliers to get prices for the widget. All are within $0.05 of each other. Since they will use millions of widgets, she decides that the $0.05 difference is important. The supplier who has the lowest price is known for delivering late and low-quality materials. Moisha decides to use the supplier who is $0.02 more but delivers on time and at the right quality. This supplier charges $0.48 per widget. Each unit of product requires four widgets. What is the standard cost per unit for widgets?

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.

Expert Solution & Answer

Chapter 8 Solutions

Principles of Accounting Volume 2

Ch. 8 - Why does a company use a standard costing system?...Ch. 8 - This standard is set at a level that may be...Ch. 8 - This standard is set at a level that could be...Ch. 8 - This variance is the difference involving spending...Ch. 8 - This variance is the difference involving spending...Ch. 8 - What are some possible reasons for a material...Ch. 8 - When is the material price variance unfavorable?...Ch. 8 - When is the material price variance favorable? A....Ch. 8 - What are some reasons for a material quantity...Ch. 8 - When is the material quantity variance favorable?...

Ch. 8 - When is the material quantity unfavorable? A. when...Ch. 8 - What are some possible reasons for a labor rate...Ch. 8 - When is the labor rate variance unfavorable? A....Ch. 8 - When is the labor rate variance favorable? A. when...Ch. 8 - What are some possible reasons for a direct labor...Ch. 8 - When is the direct labor time variance favorable?...Ch. 8 - When is the direct labor time variance...Ch. 8 - A flexible budget______. A. predicts estimated...Ch. 8 - The variable overhead rate variance is caused by...Ch. 8 - The variable overhead efficiency variance is...Ch. 8 - The fixed factory overhead variance is caused by...Ch. 8 - Which of the following is a possible cause of an...Ch. 8 - Which of the following is a possible cause of an...Ch. 8 - Which of the following is a possible cause of an...Ch. 8 - Which of the following is a possible cause of an...Ch. 8 - What two components are needed to determine a...Ch. 8 - What two components are needed to determine a...Ch. 8 - What elements require consideration before...Ch. 8 - What is a variance?Ch. 8 - What causes the material price variance?Ch. 8 - What causes the material quantity variance?Ch. 8 - What are some possible causes of a material price...Ch. 8 - What are some possible causes of a material...Ch. 8 - What is the direct labor rate variance?Ch. 8 - What is the direct labor time variance?Ch. 8 - What are some possible causes of a direct labor...Ch. 8 - What are some possible causes of a direct labor...Ch. 8 - How is the total direct labor variance calculated?Ch. 8 - What causes the variable overhead rate variance?Ch. 8 - What causes the variable overhead efficiency...Ch. 8 - What is the main difference between a flexible...Ch. 8 - What causes a favorable variance?Ch. 8 - What causes an unfavorable variance?Ch. 8 - When might a favorable variance not be a good...Ch. 8 - When might an unfavorable variance be a good...Ch. 8 - Identify several causes of a favorable material...Ch. 8 - Identify several causes of an unfavorable material...Ch. 8 - Identify several causes of a favorable material...Ch. 8 - Identify several causes of an unfavorable material...Ch. 8 - Identify several causes of a favorable labor rate...Ch. 8 - Identity several causes of an unfavorable labor...Ch. 8 - Identify several causes of a favorable labor...Ch. 8 - Identify several causes of an unfavorable labor...Ch. 8 - Moisha is developing material standards for her...Ch. 8 - Rene is working with the operations manager to...Ch. 8 - Fiona cleans offices. She is allowed 5 seconds per...Ch. 8 - Use the information provided to create a standard...Ch. 8 - Sitka Industries uses a cost system that carries...Ch. 8 - Use the information provided to answer the...Ch. 8 - Dog Bone Bakery, which bakes dog treats, makes a...Ch. 8 - Queen Industries uses a standard costing system in...Ch. 8 - Penny Company manufactures only one product and...Ch. 8 - ThingOne Company has the following information...Ch. 8 - A manufacturer planned to use $78 of variable...Ch. 8 - Acme Inc. has the following information available:...Ch. 8 - Acme Inc. has the following information available:...Ch. 8 - Acme Inc. has the following information available:...Ch. 8 - Bristol is developing material standards for her...Ch. 8 - Salley is developing material and labor standards...Ch. 8 - Use the following information to create a standard...Ch. 8 - Mateo makes gizmos. He would like to set up a...Ch. 8 - Smith Industries uses a cost system that carries...Ch. 8 - Lizbeth, Inc., makes ice cream. The toffee coffee...Ch. 8 - Woodpecker manufactures sawmill equipment. They...Ch. 8 - Case made 24,500 units during June, using 32,000...Ch. 8 - Eagle Inc. uses a standard cost system. During the...Ch. 8 - A manufacturer planned to use $45 of variable...Ch. 8 - Fitzgerald Company manufactures sewing machines,...Ch. 8 - Acme Inc. has the following information available:...Ch. 8 - Acme Inc. has the following information available:...Ch. 8 - Acme Inc. has the following information available:...Ch. 8 - The comptroller wants to set the standards...Ch. 8 - Stan is opening a coffee shop next to Big State...Ch. 8 - What makes a variance favorable? Give an example...Ch. 8 - April Industries employs a standard costing system...Ch. 8 - Ed Co. manufactures two types of O rings, large...Ch. 8 - The Whizbang Company makes a special type of toy....Ch. 8 - Ellis Companys labor information for September is...Ch. 8 - Breakaway Companys labor information for May is as...Ch. 8 - Power Co.s labor information for June is as...Ch. 8 - Prepare a flexible budget for overhead based on...Ch. 8 - Reddy Corporation has collected the following data...Ch. 8 - ABC Inc. spent a total of $48,000 on factory...Ch. 8 - Recompute the variances from the second Acme Inc....Ch. 8 - Sameerah is trying to determine the standard hours...Ch. 8 - Carl cleans offices. He has the following...Ch. 8 - Freidrich is working with the operations manager...Ch. 8 - A company bought 45,000 pounds of plastic pellets...Ch. 8 - Illinois Company is a medium-sized company that...Ch. 8 - Corolla Manufacturing has a standard cost for...Ch. 8 - Marymount Company makes one product. In the month...Ch. 8 - Adam Inc.s records for May include the following...Ch. 8 - Ribcos labor cost information for making its only...Ch. 8 - Use the following standard cost card for 1 gallon...Ch. 8 - Use the following standard cost card for 1 gallon...Ch. 8 - How do you balance a firms need to succeed and the...Ch. 8 - What type of firm would use standard costing? What...Ch. 8 - Is labor a true variable cost?Ch. 8 - Why would managers use a flexible budget? What...Ch. 8 - Fill in the blanks in the following flexible...Ch. 8 - Before automation became more prevalent, overhead...Ch. 8 - In your opinion, is it important that an...

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