Spending Variance: Spending variance is the deviation of actual expenses from the budgeted expenses. Efficiency Variance: Efficiency variance is the distinction between actual quantity of input and estimated quantity of input purchased for a particular price. Production-Volume Variance: Production volume variance determines the amount of overhead employed to the quantity produced. It is the distinction between the actual quantity manufactured and estimated quantity that should have been manufactured multiplied by budgeted overhead rate. Price Variance: Price variance is the distinction between the estimated or budgeted price of the input material and actual price of the input material multiplied by actual volume of input. Budgeted fixed overhead rate: Budgeted fixed overhead rate is the sum total of estimated overhead cost divided by the total volume of budgeted cost allocation base. To compute: a. Direct materials efficiency variance, b. direct materials rice variance, c. Direct labor efficiency variance, d. Direct labor price variance, e. Total manufacturing overhead manufacturing variance, f. Fixed overhead flexible budget variance , g. Fixed overhead production-volume variance.

Question

Want to see the full answer?

Answer 1

Question

Definition Definition Measure used to estimate the difference between the budgeted and annual proportion for a specific accounting year. A favorable budget variance refers to positive variances or gains, while unfavorable or negative variances refer to a shortfall in the budget. A budget variance is indicative of the instances where the actual costs incurred are higher or lower than the estimated costs.

Chapter 8, Problem 8.42P

1.

To determine

Spending Variance:

Spending variance is the deviation of actual expenses from the budgeted expenses.

Efficiency Variance:

Efficiency variance is the distinction between actual quantity of input and estimated quantity of input purchased for a particular price.

Production-Volume Variance:

Production volume variance determines the amount of overhead employed to the quantity produced. It is the distinction between the actual quantity manufactured and estimated quantity that should have been manufactured multiplied by budgeted overhead rate.

Price Variance:

Price variance is the distinction between the estimated or budgeted price of the input material and actual price of the input material multiplied by actual volume of input.

Budgeted fixed overhead rate:

Budgeted fixed overhead rate is the sum total of estimated overhead cost divided by the total volume of budgeted cost allocation base.

To compute: a. Direct materials efficiency variance, b. direct materials rice variance, c. Direct labor efficiency variance, d. Direct labor price variance, e. Total manufacturing overhead manufacturing variance, f. Fixed overhead flexible budget variance, g. Fixed overhead production-volume variance.

2.

To determine

To prepare: Gross margin for K Company’s first year of operation

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

what is Orion's total asset turnover ratio? accounting question solution

Summit Industrial forecasts that total overhead for the current year will be $8,500,000 and that total machine hours will be 150,000 hours. Year-to-date, the actual overhead is $5,600,000, and the actual machine hours are 75,000 hours. If Summit Industrial uses a predetermined overhead rate based on machine hours for applying overhead, what is the overhead rate? a. $50 per machine hour b. $65 per machine hour c. $56.67 per machine hour d. $45 per machine hour

SunTech Energy has total sales of $1,500 and costs of $850. Depreciation is $200, and the tax rate is 30%. The firm does not have any interest expense. What is the operating cash flow (OCF)?

Answer 2

Question

Definition Definition Measure used to estimate the difference between the budgeted and annual proportion for a specific accounting year. A favorable budget variance refers to positive variances or gains, while unfavorable or negative variances refer to a shortfall in the budget. A budget variance is indicative of the instances where the actual costs incurred are higher or lower than the estimated costs.

Chapter 8, Problem 8.42P

1.

To determine

Spending Variance:

Spending variance is the deviation of actual expenses from the budgeted expenses.

Efficiency Variance:

Efficiency variance is the distinction between actual quantity of input and estimated quantity of input purchased for a particular price.

Production-Volume Variance:

Production volume variance determines the amount of overhead employed to the quantity produced. It is the distinction between the actual quantity manufactured and estimated quantity that should have been manufactured multiplied by budgeted overhead rate.

Price Variance:

Price variance is the distinction between the estimated or budgeted price of the input material and actual price of the input material multiplied by actual volume of input.

Budgeted fixed overhead rate:

Budgeted fixed overhead rate is the sum total of estimated overhead cost divided by the total volume of budgeted cost allocation base.

To compute: a. Direct materials efficiency variance, b. direct materials rice variance, c. Direct labor efficiency variance, d. Direct labor price variance, e. Total manufacturing overhead manufacturing variance, f. Fixed overhead flexible budget variance, g. Fixed overhead production-volume variance.

2.

To determine

To prepare: Gross margin for K Company’s first year of operation

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 3

Question

Definition Definition Measure used to estimate the difference between the budgeted and annual proportion for a specific accounting year. A favorable budget variance refers to positive variances or gains, while unfavorable or negative variances refer to a shortfall in the budget. A budget variance is indicative of the instances where the actual costs incurred are higher or lower than the estimated costs.

Chapter 8, Problem 8.42P

1.

To determine

Spending Variance:

Spending variance is the deviation of actual expenses from the budgeted expenses.

Efficiency Variance:

Efficiency variance is the distinction between actual quantity of input and estimated quantity of input purchased for a particular price.

Production-Volume Variance:

Production volume variance determines the amount of overhead employed to the quantity produced. It is the distinction between the actual quantity manufactured and estimated quantity that should have been manufactured multiplied by budgeted overhead rate.

Price Variance:

Price variance is the distinction between the estimated or budgeted price of the input material and actual price of the input material multiplied by actual volume of input.

Budgeted fixed overhead rate:

Budgeted fixed overhead rate is the sum total of estimated overhead cost divided by the total volume of budgeted cost allocation base.

To compute: a. Direct materials efficiency variance, b. direct materials rice variance, c. Direct labor efficiency variance, d. Direct labor price variance, e. Total manufacturing overhead manufacturing variance, f. Fixed overhead flexible budget variance, g. Fixed overhead production-volume variance.

2.

To determine

To prepare: Gross margin for K Company’s first year of operation

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 4

Question

Definition Definition Measure used to estimate the difference between the budgeted and annual proportion for a specific accounting year. A favorable budget variance refers to positive variances or gains, while unfavorable or negative variances refer to a shortfall in the budget. A budget variance is indicative of the instances where the actual costs incurred are higher or lower than the estimated costs.

Chapter 8, Problem 8.42P

1.

To determine