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 8, Problem 8.20MCQ
Fordham Corporation produces a single product. The
| Direct materials (6 pounds at $0.50 per pound) | $ 3 |
| Direct labor (2 hours at $10 per hour) | 20 |
| Variable manufacturing |
10 |
| Total | 33 |
During November Year 2, 4,000 units of Concourse were produced. The costs associated with November operations were as follows:
| Material purchased (36,000 pounds at $0.60 per pound) | $21,600 |
| Material used in production (28,000 pounds) | |
| Direct labor (8,200 hours at $9.75 per hour) | 79,950 |
| Variable manufacturing overhead incurred | 41,820 |
What is the variable overhead efficiency variance for Concourse for November Year 2?
- 1. $2,000 favorable.
- 2. $2,000 unfavorable.
- 3. $1,000 favorable.
- 4. $1,000 unfavorable.
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Levine Inc., which produces a single product, has prepared the following standard cost sheet for one unit of the product.
Direct materials (6 pounds at $1.60 per pound)
$9.60
Direct labor (6 hours at $10.00 per hour)
$60.00
During the month of April, the company manufactures 310 units and incurs the following actual costs.
Direct materials purchased and used (2,400 pounds)
$4,080
Direct labor (1,880 hours)
$18,612
Compute the total, price, and quantity variances for materials and labor.
Total materials variance
$
Unfavorable
Materials price variance
$
Unfavorable
Materials quantity variance
$
Unfavorable
Total labor variance
Unfavorable
Labor price variance
Favorable
Labor quantity variance
Unfavorable
%24
%24
%24
Fall Industries has set the following standards for one unit:
Direct material
Quantity: 45 yards
Price per yard: $2.70 per yard
Direct labor
Quantity: 9 hours per unit
Rate per hour: $16 per hour
Actual costs incurred in the production of 1,200 units were as follows:
Direct material: $99,000 ($2.75 per yard)
Direct labor: $129,560 ($15.80 per hour)
All materials purchased were consumed during the period.
Required:
1. Calculate the direct-material price and quantity variances. Indicate whether each variance
is favorable or unfavorable.
2. Calculate the direct-labor rate and efficiency variances. Indicate whether each variance is
favorable or unfavorable.
3. Write a memo to your manager with the results of your findings.
a. What do each of the variances mean (describe what each variance measures)?
b. How is Fall performing based on each of these variances?
c. What variances suggest improvement is needed, and how can the company
improve that specific variance (give two specific ways per…
During June HASF company material purchases amounted to 5,000 pounds at a price of 7 per pound. Actual costs incurred in the production of 5,000 units were as follows
Total direct labor cost 100,000 @10 per hour
Cost of Material used 70,000
The standards for one units of company product are as follows
Direct Labor Direct Material
- 3 hours required for one unit - 2 pounds of Material required for one unit
- Rate 24 per hour - Price 20 per pound
Required:
Compute the following
Material variance
Material quantity variance
Material price variance
Being an accounting expert, elaborate that how standard costing system facilitates managerial planning, reduction in production costs and decision making. Use your analytical thinking to answer the question (Word limit: 150-200 words max)
Chapter 8 Solutions
Horngren's Cost Accounting, Student Value Edition Plus MyLab Accounting with Pearson eText - Access Card Package (16th Edition)
Ch. 8 - How do managers plan for variable overhead costs?Ch. 8 - How does the planning of fixed overhead costs...Ch. 8 - How does standard costing differ from actual...Ch. 8 - What are the steps in developing a budgeted...Ch. 8 - What are the factors that affect the spending...Ch. 8 - Assume variable manufacturing overhead is...Ch. 8 - Describe the difference between a direct materials...Ch. 8 - What are the steps in developing a budgeted fixed...Ch. 8 - Why is the flexible-budget variance the same...Ch. 8 - Explain how the analysis of fixed manufacturing...
Ch. 8 - Provide one caveat that will affect whether a...Ch. 8 - The production-volume variance should always be...Ch. 8 - What are the variances in a 4-variance analysis?Ch. 8 - Overhead variances should be viewed as...Ch. 8 - Describe how flexible-budget variance analysis can...Ch. 8 - Each of the following statements is correct...Ch. 8 - Steed Co. budgets production of 150,000 units in...Ch. 8 - As part of her annual review of her companys...Ch. 8 - Culpepper Corporation had the following...Ch. 8 - Fordham Corporation produces a single product. The...Ch. 8 - Variable manufacturing overhead, variance...Ch. 8 - Fixed manufacturing overhead, variance analysis...Ch. 8 - Variable manufacturing overhead variance analysis....Ch. 8 - Fixed manufacturing overhead variance analysis...Ch. 8 - Manufacturing overhead, variance analysis. The...Ch. 8 - 4-variance analysis, fill in the blanks. ProChem...Ch. 8 - Straightforward 4-variance overhead analysis. The...Ch. 8 - Straightforward coverage of manufacturing...Ch. 8 - Overhead variances, service sector. Meals Made...Ch. 8 - Total overhead, 3-variance analysis. Pampered...Ch. 8 - Production-volume variance analysis and...Ch. 8 - Overhead variances, service setting. Carlyle...Ch. 8 - Identifying favorable and unfavorable variances....Ch. 8 - Flexible-budget variances, review of Chapters 7...Ch. 8 - Comprehensive variance analysis. Cooking Whiz...Ch. 8 - Journal entries (continuation of 8-35). A. Prepare...Ch. 8 - Graphs and overhead variances. Best Around, Inc.,...Ch. 8 - Overhead variance, missing information. Consider...Ch. 8 - Flexible budgets, 4-variance analysis. (CMA,...Ch. 8 - Activity-based costing, batch-level variance...Ch. 8 - Overhead variances and sales-volume variance. The...Ch. 8 - Activity-based costing, batch-level variance...Ch. 8 - Comprehensive review of Chapters 7 and 8, working...Ch. 8 - Review of Chapters 7 and 8, 3-variance analysis....Ch. 8 - Nonfinancial variances. Kathys Kettle Potato Chips...Ch. 8 - Overhead variances, service sector. Cavio is a...Ch. 8 - Direct-cost and overhead variances, income...Ch. 8 - Overhead variances, ethics. Carpenter Company uses...
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