17th Edition

ISBN: 9781305087408

Author: Edward J. Vanderbeck, Maria R. Mitchell

Publisher: Cengage Learning

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Textbook Question

Chapter 8, Problem 7P

Materials and labor variance analyses

The standard cost summary for the most popular product of Phenom Products Co. is shown as follows, together with production and cost data for the period.

Chapter 8, Problem 7P, The standard cost summary for the most popular product of Phenom Products Co. is shown as follows, , example 1

Chapter 8, Problem 7P, The standard cost summary for the most popular product of Phenom Products Co. is shown as follows, , example 2

One gallon each of liquid lead and varnish are added at the start of processing. The balance of the materials is added when the process is two-thirds complete. Labor and overhead are added evenly throughout the process. There were no units in process at the beginning of the month.

Required:

1. Calculate equivalent production for materials, labor, and overhead. (Be sure to refer to the standard cost summary to help determine the percentage of materials in ending work in process.)
2. Calculate materials and labor variances and indicate whether they are favorable or unfavorable, using the diagram format shown in Figure 8-4.
3. Determine the cost of materials and labor in the work in process account at the end of the month.

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.

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Chapter 8, Problem 6P

Chapter 8, Problem 8P

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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. 3Q Ch. 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. 9Q Ch. 8 - How does a materials purchase price variance...

Ch. 8 - Prob. 11Q Ch. 8 - Prob. 12Q Ch. 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. 17Q Ch. 8 - Prob. 18Q Ch. 8 - Prob. 19Q Ch. 8 - Prob. 20Q Ch. 8 - When does a flexible-budget variance occur? Ch. 8 - Why is it important to determine flexible-budget...Ch. 8 - Prob. 23Q Ch. 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. 2E Ch. 8 - Prob. 3E Ch. 8 - Prob. 4E Ch. 8 - Prob. 5E Ch. 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. 15P Ch. 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. 19P Ch. 8 - Jillian Manufacturing Inc. manufactures a single...Ch. 8 - Cost and production data for Binghamton Beverages...

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Solution Summary: The author explains how to calculate equivalent production for materials, labour, and overhead.

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