Variance Analysis: Variance analysis is the process of ascertaining the deviations between actual and planned output. Favorable Variance: Favorable variance is the difference between the actual and planned output which is beneficial for the company like actual cost is less than the standard or planned cost or the actual revenue is more than the planned revenue. Unfavorable variance: Unfavorable variance is the difference between the actual and planned output which is harmful for the company like actual cost incurred is more than the standard or planned cost or the revenue is less than the planned revenue. Direct Material Price Variance: Direct material price variance in the difference between the budgeted per unit cost of raw material and the actual per unit cost multiplied by the number of units purchased. Direct Material Efficiency Variance: Direct material efficiency variance is the difference between the budgeted quantities and the actual quantities purchased at a specific price. Material Price Variance: Material price variance is the difference between the budgeted and the actual purchase price of the material purchased. It is calculated to ascertain the efficiency of the purchase department. Direct Labor Efficiency Variance: Direct labor efficiency variance is the difference between the actual time consumed in manufacturing unit and the standard time allowed or the budgeted time for the manufacture of a unit multiplied by the standard direct labor rate. To calculate: The fixed overhead spending variance and indicate whether it is favorable (F) or unfavorable (U).

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Answer 1

Question

Chapter 8, Problem 8.26E

1.

To determine

Variance Analysis:

Variance analysis is the process of ascertaining the deviations between actual and planned output.

Favorable Variance:

Favorable variance is the difference between the actual and planned output which is beneficial for the company like actual cost is less than the standard or planned cost or the actual revenue is more than the planned revenue.

Unfavorable variance:

Unfavorable variance is the difference between the actual and planned output which is harmful for the company like actual cost incurred is more than the standard or planned cost or the revenue is less than the planned revenue.

Direct Material Price Variance:

Direct material price variance in the difference between the budgeted per unit cost of raw material and the actual per unit cost multiplied by the number of units purchased.

Direct Material Efficiency Variance:

Direct material efficiency variance is the difference between the budgeted quantities and the actual quantities purchased at a specific price.

Material Price Variance:

Material price variance is the difference between the budgeted and the actual purchase price of the material purchased. It is calculated to ascertain the efficiency of the purchase department.

Direct Labor Efficiency Variance:

Direct labor efficiency variance is the difference between the actual time consumed in manufacturing unit and the standard time allowed or the budgeted time for the manufacture of a unit multiplied by the standard direct labor rate.

To calculate: The fixed overhead spending variance and indicate whether it is favorable (F) or unfavorable (U).

2.

To determine

To calculate: Production volume variance and indicate whether it is favorable (F) or unfavorable (U) if Company M uses direct labor-hours for calculate budgeted fixed overhead rate

3.

To determine

To explain: The reason to incur economic cost of unused capacity.

4.

To determine

To calculate: The sales-volume variance and reconciliation of it with the production-volume variance calculated in requirement 2.

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Answer 2

Question

Chapter 8, Problem 8.26E

1.

To determine

Variance Analysis:

Variance analysis is the process of ascertaining the deviations between actual and planned output.

Favorable Variance:

Favorable variance is the difference between the actual and planned output which is beneficial for the company like actual cost is less than the standard or planned cost or the actual revenue is more than the planned revenue.

Unfavorable variance:

Unfavorable variance is the difference between the actual and planned output which is harmful for the company like actual cost incurred is more than the standard or planned cost or the revenue is less than the planned revenue.

Direct Material Price Variance:

Direct material price variance in the difference between the budgeted per unit cost of raw material and the actual per unit cost multiplied by the number of units purchased.

Direct Material Efficiency Variance:

Direct material efficiency variance is the difference between the budgeted quantities and the actual quantities purchased at a specific price.

Material Price Variance:

Material price variance is the difference between the budgeted and the actual purchase price of the material purchased. It is calculated to ascertain the efficiency of the purchase department.

Direct Labor Efficiency Variance:

Direct labor efficiency variance is the difference between the actual time consumed in manufacturing unit and the standard time allowed or the budgeted time for the manufacture of a unit multiplied by the standard direct labor rate.

To calculate: The fixed overhead spending variance and indicate whether it is favorable (F) or unfavorable (U).

2.

To determine

To calculate: Production volume variance and indicate whether it is favorable (F) or unfavorable (U) if Company M uses direct labor-hours for calculate budgeted fixed overhead rate

3.

To determine

To explain: The reason to incur economic cost of unused capacity.

4.

To determine

To calculate: The sales-volume variance and reconciliation of it with the production-volume variance calculated in requirement 2.

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Answer 3

Question

Chapter 8, Problem 8.26E

1.

To determine

Variance Analysis:

Variance analysis is the process of ascertaining the deviations between actual and planned output.

Favorable Variance:

Favorable variance is the difference between the actual and planned output which is beneficial for the company like actual cost is less than the standard or planned cost or the actual revenue is more than the planned revenue.

Unfavorable variance:

Unfavorable variance is the difference between the actual and planned output which is harmful for the company like actual cost incurred is more than the standard or planned cost or the revenue is less than the planned revenue.

Direct Material Price Variance:

Direct material price variance in the difference between the budgeted per unit cost of raw material and the actual per unit cost multiplied by the number of units purchased.

Direct Material Efficiency Variance:

Direct material efficiency variance is the difference between the budgeted quantities and the actual quantities purchased at a specific price.

Material Price Variance:

Material price variance is the difference between the budgeted and the actual purchase price of the material purchased. It is calculated to ascertain the efficiency of the purchase department.

Direct Labor Efficiency Variance:

Direct labor efficiency variance is the difference between the actual time consumed in manufacturing unit and the standard time allowed or the budgeted time for the manufacture of a unit multiplied by the standard direct labor rate.

To calculate: The fixed overhead spending variance and indicate whether it is favorable (F) or unfavorable (U).

2.

To determine

To calculate: Production volume variance and indicate whether it is favorable (F) or unfavorable (U) if Company M uses direct labor-hours for calculate budgeted fixed overhead rate

3.

To determine

To explain: The reason to incur economic cost of unused capacity.

4.

To determine

To calculate: The sales-volume variance and reconciliation of it with the production-volume variance calculated in requirement 2.

Expert Solution & Answer

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Answer 4

Question

Chapter 8, Problem 8.26E

1.

To determine

Variance Analysis:

Variance analysis is the process of ascertaining the deviations between actual and planned output.

Favorable Variance:

Favorable variance is the difference between the actual and planned output which is beneficial for the company like actual cost is less than the standard or planned cost or the actual revenue is more than the planned revenue.

Unfavorable variance:

Unfavorable variance is the difference between the actual and planned output which is harmful for the company like actual cost incurred is more than the standard or planned cost or the revenue is less than the planned revenue.

Direct Material Price Variance:

Direct material price variance in the difference between the budgeted per unit cost of raw material and the actual per unit cost multiplied by the number of units purchased.

Direct Material Efficiency Variance:

Direct material efficiency variance is the difference between the budgeted quantities and the actual quantities purchased at a specific price.

Material Price Variance:

Material price variance is the difference between the budgeted and the actual purchase price of the material purchased. It is calculated to ascertain the efficiency of the purchase department.

Direct Labor Efficiency Variance:

Direct labor efficiency variance is the difference between the actual time consumed in manufacturing unit and the standard time allowed or the budgeted time for the manufacture of a unit multiplied by the standard direct labor rate.

To calculate: The fixed overhead spending variance and indicate whether it is favorable (F) or unfavorable (U).

2.

To determine

To calculate: Production volume variance and indicate whether it is favorable (F) or unfavorable (U) if Company M uses direct labor-hours for calculate budgeted fixed overhead rate

3.

To determine

To explain: The reason to incur economic cost of unused capacity.

4.

To determine

To calculate: The sales-volume variance and reconciliation of it with the production-volume variance calculated in requirement 2.

Expert Solution & Answer

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Answer 5

Chapter 8, Problem 8.26E

1.

To determine

Variance Analysis:

Variance analysis is the process of ascertaining the deviations between actual and planned output.

Favorable Variance:

Favorable variance is the difference between the actual and planned output which is beneficial for the company like actual cost is less than the standard or planned cost or the actual revenue is more than the planned revenue.

Unfavorable variance:

Unfavorable variance is the difference between the actual and planned output which is harmful for the company like actual cost incurred is more than the standard or planned cost or the revenue is less than the planned revenue.

Direct Material Price Variance:

Direct material price variance in the difference between the budgeted per unit cost of raw material and the actual per unit cost multiplied by the number of units purchased.

Direct Material Efficiency Variance:

Direct material efficiency variance is the difference between the budgeted quantities and the actual quantities purchased at a specific price.

Material Price Variance:

Material price variance is the difference between the budgeted and the actual purchase price of the material purchased. It is calculated to ascertain the efficiency of the purchase department.

Direct Labor Efficiency Variance:

Direct labor efficiency variance is the difference between the actual time consumed in manufacturing unit and the standard time allowed or the budgeted time for the manufacture of a unit multiplied by the standard direct labor rate.

To calculate: The fixed overhead spending variance and indicate whether it is favorable (F) or unfavorable (U).

2.

To determine

To calculate: Production volume variance and indicate whether it is favorable (F) or unfavorable (U) if Company M uses direct labor-hours for calculate budgeted fixed overhead rate

3.

To determine

To explain: The reason to incur economic cost of unused capacity.

4.

To determine

To calculate: The sales-volume variance and reconciliation of it with the production-volume variance calculated in requirement 2.

Answer 6

Chapter 8, Problem 8.26E

1.

To determine

Variance Analysis:

Variance analysis is the process of ascertaining the deviations between actual and planned output.

Favorable Variance:

Favorable variance is the difference between the actual and planned output which is beneficial for the company like actual cost is less than the standard or planned cost or the actual revenue is more than the planned revenue.

Unfavorable variance:

Unfavorable variance is the difference between the actual and planned output which is harmful for the company like actual cost incurred is more than the standard or planned cost or the revenue is less than the planned revenue.

Direct Material Price Variance:

Direct material price variance in the difference between the budgeted per unit cost of raw material and the actual per unit cost multiplied by the number of units purchased.

Direct Material Efficiency Variance:

Direct material efficiency variance is the difference between the budgeted quantities and the actual quantities purchased at a specific price.

Material Price Variance:

Material price variance is the difference between the budgeted and the actual purchase price of the material purchased. It is calculated to ascertain the efficiency of the purchase department.

Direct Labor Efficiency Variance:

Direct labor efficiency variance is the difference between the actual time consumed in manufacturing unit and the standard time allowed or the budgeted time for the manufacture of a unit multiplied by the standard direct labor rate.

To calculate: The fixed overhead spending variance and indicate whether it is favorable (F) or unfavorable (U).

Answer 7

Chapter 8, Problem 8.26E

1.

To determine

Variance Analysis:

Variance analysis is the process of ascertaining the deviations between actual and planned output.

Favorable Variance:

Favorable variance is the difference between the actual and planned output which is beneficial for the company like actual cost is less than the standard or planned cost or the actual revenue is more than the planned revenue.

Unfavorable variance:

Unfavorable variance is the difference between the actual and planned output which is harmful for the company like actual cost incurred is more than the standard or planned cost or the revenue is less than the planned revenue.

Direct Material Price Variance:

Direct material price variance in the difference between the budgeted per unit cost of raw material and the actual per unit cost multiplied by the number of units purchased.

Direct Material Efficiency Variance:

Direct material efficiency variance is the difference between the budgeted quantities and the actual quantities purchased at a specific price.

Material Price Variance:

Material price variance is the difference between the budgeted and the actual purchase price of the material purchased. It is calculated to ascertain the efficiency of the purchase department.

Direct Labor Efficiency Variance:

Direct labor efficiency variance is the difference between the actual time consumed in manufacturing unit and the standard time allowed or the budgeted time for the manufacture of a unit multiplied by the standard direct labor rate.

To calculate: The fixed overhead spending variance and indicate whether it is favorable (F) or unfavorable (U).

Answer 8

2.

To determine

To calculate: Production volume variance and indicate whether it is favorable (F) or unfavorable (U) if Company M uses direct labor-hours for calculate budgeted fixed overhead rate

Answer 9

2.

To determine

To calculate: Production volume variance and indicate whether it is favorable (F) or unfavorable (U) if Company M uses direct labor-hours for calculate budgeted fixed overhead rate

Answer 10

3.

To determine

To explain: The reason to incur economic cost of unused capacity.

Answer 11

3.

To determine

To explain: The reason to incur economic cost of unused capacity.

Answer 12

4.

To determine

To calculate: The sales-volume variance and reconciliation of it with the production-volume variance calculated in requirement 2.

Answer 13

4.

To determine

To calculate: The sales-volume variance and reconciliation of it with the production-volume variance calculated in requirement 2.

Answer 14

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Answer 15

Expert Solution & Answer

Answer 16

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Answer 17

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...

To calculate: Production volume variance and indicate whether it is favorable (F) or unfavorable (U) if Company M uses direct labor-hours for calculate budgeted fixed overhead rate

To explain: The reason to incur economic cost of unused capacity.

To calculate: The sales-volume variance and reconciliation of it with the production-volume variance calculated in requirement 2.

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Chapter 8 Solutions