Principles of Cost Accounting
17th Edition
ISBN: 9781305087408
Author: Edward J. Vanderbeck, Maria R. Mitchell
Publisher: Cengage Learning
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Chapter 8, Problem 20Q
To determine
Explain the variances allocated to work-in process, finished goods, and cost of goods other than charged to cost of goods sold during the end of the period.
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Students have asked these similar questions
Why should a production-volume variance (PVV) that is material be prorated among work-in-process, finished goods, cost and cost of goods sold rather than writing it all off to cost of goods sold?
a.
If a PVV is always written off to cost of goods sold, then the assets on the balance sheet would be the same as actual costs.
b.
If a PVV is always written off to cost of goods sold, then the liabilities on the balance sheet would be overstated.
c.
If a PVV is always written off to cost of goods sold, then the balances in the inventory accounts on the balance sheet would be most accurate.
d.
If a PVV is always written off to cost of goods sold, a company could set its standard costs to either increase or decrease operating incomes.
TRUE OR FALSE
Production volume variance is adjusted to the cost of goods sold to get the cost of goods ed at actual under variable costing method.
Which of the following would not be a period cost?
Group of answer choices
Sales commissions.
Accounting costs.
Sales salaries.
Tamper-proof packaging.
Legal costs.
Chapter 8 Solutions
Principles of Cost Accounting
Ch. 8 - How does a standard cost accounting system work,...Ch. 8 - What is the difference between the standard cost...Ch. 8 - Prob. 3QCh. 8 - What are the specific procedures on which a...Ch. 8 - How are standards for materials and labor costs...Ch. 8 - What is a variance?Ch. 8 - How do price and quantity variances relate to...Ch. 8 - How do rate and efficiency variances relate to...Ch. 8 - Prob. 9QCh. 8 - How does a materials purchase price variance...
Ch. 8 - Prob. 11QCh. 8 - Prob. 12QCh. 8 - When a company uses a standard cost system, are...Ch. 8 - What two factors must be considered when breaking...Ch. 8 - What might cause the following materials...Ch. 8 - What might cause the following labor variances?
An...Ch. 8 - Prob. 17QCh. 8 - Prob. 18QCh. 8 - Prob. 19QCh. 8 - Prob. 20QCh. 8 - When does a flexible-budget variance occur?
Ch. 8 - Why is it important to determine flexible-budget...Ch. 8 - Prob. 23QCh. 8 - What is the significance of a production-volume...Ch. 8 - If production is more or less than the standard...Ch. 8 - At the end of the current fiscal year, the trial...Ch. 8 - What variances from the four-variance method are...Ch. 8 - What is the primary difference between the...Ch. 8 - What are the four variances in the four-variance...Ch. 8 - In all of the exercises involving variances, use F...Ch. 8 - Prob. 2ECh. 8 - Prob. 3ECh. 8 - Prob. 4ECh. 8 - Prob. 5ECh. 8 - Computing materials variances D-List Calendar Co....Ch. 8 - Computing labor variances LIFT Inc. manufactures...Ch. 8 - Standard cost summary; materials and labor cost...Ch. 8 - Computing labor variances Fill in the missing...Ch. 8 - Standard unit cost and journal entries The normal...Ch. 8 - Making journal entries Assume that during the...Ch. 8 - Using variance analysis and interpretation Last...Ch. 8 - Using variance analysis and interpretation Last...Ch. 8 - Journalizing standard costs in two departments...Ch. 8 - Calculating factory overhead The standard capacity...Ch. 8 - Determining Budgeted Overhead The overhead...Ch. 8 - Calculating factory overhead: two variances Munoz...Ch. 8 - Calculating factory overhead: two variances...Ch. 8 - The normal capacity of a manufacturing plant is...Ch. 8 - Calculating amount of factory overhead applied to...Ch. 8 - Georgia Gasket Co. budgets 8,000 direct labor...Ch. 8 - (Appendix) Calculating factory overhead: four...Ch. 8 - (Appendix) Calculating factory overhead: three...Ch. 8 - Materials and labor variances Branca Inspections...Ch. 8 - Materials and labor variances Fausto Fabricators...Ch. 8 - Zippy Inc. manufactures a fuel additive, Surge,...Ch. 8 - Calculation of materials and labor variances
Fritz...Ch. 8 - High-End Products Inc. uses a standard cost system...Ch. 8 - RDI Products Co. manufactures a variety of...Ch. 8 - The standard cost summary for the most popular...Ch. 8 - Carlo Lee Corp. has established the following...Ch. 8 - USD Inc. has established the following standard...Ch. 8 - Allocation of variances
Costa Brava Manufacturing...Ch. 8 - On May 1, Athens Inc. began the manufacture of a...Ch. 8 - The standard specifications for an electric motor...Ch. 8 - Cardiff Inc. manufactures men’s sport shirts for...Ch. 8 - Fargo Co. manufactures products in batches of 100...Ch. 8 - Prob. 15PCh. 8 - (Appendix) Overhead variances—four variance
Mobile...Ch. 8 - Shinto Corp. uses a standard cost system and...Ch. 8 - Kamen Manufacturing Co. estimates the following...Ch. 8 - Prob. 19PCh. 8 - Jillian Manufacturing Inc. manufactures a single...Ch. 8 - Cost and production data for Binghamton Beverages...
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- In assigning costs to goods transferred out, how do the weighted average and FIFO methods differ?arrow_forwardIn what way do the cost of production summaries in Chapter 6, prepared using the weighted average cost method, differ from the cost of production summaries presented in Chapter 5? What is the reason for this difference?arrow_forwardFor which cost concept used in applying (he cost-plus, approach to product pricing are fixed manufacturing costs, fixed selling and administrative expenses, and desired profit allowed for in determining the markup? A. Total cost B. Product cost C. Variable cost D. Standard costarrow_forward
- Under variable costing system only those costs of production that vary (variable) with production are considered in the calculationof the cost of goods manufactured. TRUE OR FALSE?arrow_forward“The production-volume variance should always be written off to Cost of Goods Sold.” Do you agree? Explain.arrow_forward1. Explain why the variances used to reconcile profit in a standard costing system are different from those used in a standard absorption costing system. 2. Explain the arguments for the use of traditional absorption costing rather than marginal costing for profit reporting and inventory valuation.arrow_forward
- When trying to identify product and period costs, is cash, work inprocess, and raw materials inventory considered to be period or product costs?arrow_forwardWhich of the following underlying assumptions form(s) the basis for gross profit variance analysis? A. In multi-product organization, the sales mix remains discretionary. B. Sales and costs behave in ainear manner C. All of the choices are assumptions that underlie gross profit variance analysis D. Costs can be categorized as variablearrow_forwardA price variance measures: Group of answer choices How good a company is in keeping its unit costs of material and labor within standards. The difference between current and previous production costs. How well a company uses its materials and labor to produce a unit of output. The difference between its production costs and its competitors’ production costs.arrow_forward
- Which of the following is a limitation of the gross profit variance analysis? a. The level of efficiency of asset management department can be computed and shown b. It includes the amount invested in working capital c. Measurement of the impact on gross profit due changes in sales volume cannot be determined d. The gross profit variance analysis is limited only on the product attributable costarrow_forwardDefine sales volume variance.arrow_forwardWhat is a product cost? What is a period cost? What is the difference and why is it important to separate these costs in financial reporting and decision-making? What is a variable cost? What is a fixed cost? Why is the difference important to making decisions?arrow_forward
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What is variance analysis?; Author: Corporate finance institute;https://www.youtube.com/watch?v=SMTa1lZu7Qw;License: Standard YouTube License, CC-BY