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Marvel Parts. Inc.. manufactures auto accessones. One of the company’s products is a set of seat covets that can be adjusted to fit nearly any small car. The company uses a
During August, the factory worked only 2.800 direct labor-hours and produced 2.000 sets of covers. The following actual costs were recorded during the month:
At standard, each set of covers should require 5.6 yards of material. All of the materials purchascd during the month were used in production.
Required:
Compute the following variances for August:
1. The materials price and quantity variances.
2. The labor rate and efficiency variances.
3. The variable
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- Jameson Company produces paper towels. The company has established the following direct materials and direct labor standards for one case of paper towels: During the first quarter of the year, Jameson produced 45,000 cases of paper towels. The company purchased and used 135,700 pounds of paper pulp at 0.38 per pound. Actual direct labor used was 91,000 hours at 12.10 per hour. Required: 1. Calculate the direct materials price and usage variances. 2. Calculate the direct labor rate and efficiency variances. 3. Prepare the journal entries for the direct materials and direct labor variances. 4. Describe how flexible budgeting variances relate to the direct materials and direct labor variances computed in Requirements 1 and 2.arrow_forwardBotella Company produces plastic bottles. The unit for costing purposes is a case of 18 bottles. The following standards for producing one case of bottles have been established: During December, 78,000 pounds of materials were purchased and used in production. There were 15,000 cases produced, with the following actual prime costs: Required: 1. Compute the materials variances. 2. Compute the labor variances. 3. CONCEPTUAL CONNECTION What are the advantages and disadvantages that can result from the use of a standard costing system?arrow_forwardThe following information is used for the question below. HakardPewlitt is producing a new model of laser printer, the Id10t. A year after the Id10t had been released, you have been given data on how well your workforce is producing. After looking at the numbers, you decide that you should figure out the variances in relation to your production team. The standard labour cost is $13.75 after pay, taxes, and benefits. You were surprised to see that the actual rate turned out to be $14.50. The actual number of hours your employees worked was 7800, but you know that the standard for the level of production (650 casings) is 7500 hours. Labour Efficiency Variance is: $4 125 Unfavourable $4 125 Favourable $4 125 $4 125arrow_forward
- Carad Co. is an electronics company which makes two types of televisions – plasma screenTVs and LCD TVs. It operates within a highly competitive market and is constantly underpressure to reduce prices and develop new products. Carad Co. operates a standard costingsystem and performs a detailed variance analysis of both products on a monthly basis. Extracts from the management information for the month of November are shown below:NoteTotal number of units made and sold 1,400 1Material price variance $28,000 A 2 Notes.(1) The budgeted total sales volume for TVs was 1,180 units, consisting of an equal mixof plasma screen TVs and LCD screen TVs. Actual sales volume was 750 plasmaTVs and 650 LCD TVs. Standard sales prices are $350 per unit for the plasma TVsand $300 per unit for the LCD TVs. The actual sales prices achieved duringNovember were $330 per unit for plasma TVs and $290 per unit for LCD TVs. Thestandard contributions…arrow_forwardanswer must be correctgarrow_forwardBellingham Company produces a product that requires 2.5 standard pounds per unit. The standard price is $3.65 per pound. 15,100 units used 36,400 pounds, which were purchased at $3.85 per pound. This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below. Open spreadsheet What is the direct materials (a) price variance, (b) quantity variance, and (c) cost variance? Round your answers to the nearest dollar. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. a. Direct materials price variance b. Direct materials quantity variance c. Direct materials cost variance $ $ $arrow_forward
- Carpenter Company uses standard costing. The company has a manufacturing plant in Georgia. Standard labor-hours per unit are 0.50, and the variable overhead rate for the Georgia plant is $3.50 per direct labor-hour. Fixed overhead for the Georgia plant is budgeted at $1,800,000 for the year. Firm management has always used variance analysis as a performance measure for the plant. Tom Saban has just been hired as a new controller for Carpenter Company. Tom is good friends with the Georgia plant manager and wants him to get a favorable review. Tom decides to underestimate production, and budgets annual output of 1,200,000 units. His explanation for this is that the economy is slowing and sales are likely to decrease. At the end of the year, the plant reported the following actual results: output of 1,500,000 using 760,000 labor-hours in total, at a cost of $2,700,000 in variable overhead and $1,850,000 in fixed overhead. Q.Summarize the fixed overhead variance based on both the projected…arrow_forwardCarpenter Company uses standard costing. The company has a manufacturing plant in Georgia. Standard labor-hours per unit are 0.50, and the variable overhead rate for the Georgia plant is $3.50 per direct labor-hour. Fixed overhead for the Georgia plant is budgeted at $1,800,000 for the year. Firm management has always used variance analysis as a performance measure for the plant. Tom Saban has just been hired as a new controller for Carpenter Company. Tom is good friends with the Georgia plant manager and wants him to get a favorable review. Tom decides to underestimate production, and budgets annual output of 1,200,000 units. His explanation for this is that the economy is slowing and sales are likely to decrease. At the end of the year, the plant reported the following actual results: output of 1,500,000 using 760,000 labor-hours in total, at a cost of $2,700,000 in variable overhead and $1,850,000 in fixed overhead. Q.Did Tom Saban’s attempt to make his friend, the plant manager,…arrow_forwardCarpenter Company uses standard costing. The company has a manufacturing plant in Georgia. Standard labor-hours per unit are 0.50, and the variable overhead rate for the Georgia plant is $3.50 per direct labor-hour. Fixed overhead for the Georgia plant is budgeted at $1,800,000 for the year. Firm management has always used variance analysis as a performance measure for the plant. Tom Saban has just been hired as a new controller for Carpenter Company. Tom is good friends with the Georgia plant manager and wants him to get a favorable review. Tom decides to underestimate production, and budgets annual output of 1,200,000 units. His explanation for this is that the economy is slowing and sales are likely to decrease. At the end of the year, the plant reported the following actual results: output of 1,500,000 using 760,000 labor-hours in total, at a cost of $2,700,000 in variable overhead and $1,850,000 in fixed overhead. Q.What do you think of Tom Saban’s behavior overall?arrow_forward
- Carpenter Company uses standard costing. The company has a manufacturing plant in Georgia. Standard labour-hours per unit are 0.50, and the variable overhead rate for the Georgia plant is $3.50 per direct labour-hour. Fixed overhead for the Georgia plant is budgeted at $1,800,000 for the year. Firm management has always used variance analysis as a performance measure for the plant. Tom Saban has just been hired as a new controller for Carpenter Company. Tom is good friends with the Georgia plant manager and wants him to get a favourable review. Tom decides to underestimate production, and budgets annual output of 1,200,000 units. His explanation for this is that the economy is slowing and sales are likely to decrease. At the end of the year, the plant reported the following actual results: output of 1,500,000 using 760,000 labour-hours in total, at a cost of $2,700,000 in variable overhead and $1,850,000 in fixed overhead. Briefly answer the following questions (and then respond to at…arrow_forwardOne of Varic Company's products goes through a glazing process. The company has observed glazing costs as follows over the last six weeks: Units Total Week Produced Glazing Cost $270 $200 1.. 8 2.. 3... 10 $310 4. . 4 $190 5.. $240 $290 6.. For planning purposes, the company's management wants to know the amount of variable glazing cost per unit and the total fixed glazing cost per week. Required: 1. Using the least-squares regression method, estimate the variable and fixed elements of the glazing cost. 2. Express the cost data in (1) above in the form Y = a + bX. 3. If the company processes seven units next week, what would be the expected total glazing cost?arrow_forwardNeed help with this questionarrow_forward
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