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1
Material price variance
The difference between the actual amount that a company spends on direct materials and the standard amount that was budgeted to be spent is material price variance.
Material quantity variance
The difference between actual amount of materials that a company uses in production process and amount that was budgeted to be used is material quantity variance.
To compute:Favorable or unfavorable material price and quantity variance.
2
Labor rate variance
The difference between the actual amount paid to workers by a company and the amount that was budgeted to be paid is labor rate variance.
Labor efficiency variance
The difference between the value of actual labor hours used in production and the value of hours that were budgeted to be used is labor efficiency variance.
To compute: Favorable or unfavorable labor rate and efficiency variances.
3
Variable overhead rate variance
The difference between actual amount of variable manufacturing
Variable overhead efficiency variance
The difference between the value of actual variable overhead based on actual time taken to produce a product and standard variable overhead based on time that was expected to be used is variable overhead efficiency variance.
To compute: Favorable or unfavorable variable overhead rate and efficiency variances.
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Chapter 9 Solutions
GEN COMBO LOOSELEAF INTRODUCTION TO MANAGERIAL ACCOUNTING; CONNECT AC
- cesi Required information [The following information applies to the questions displayed below] On July 23 of the current year, Dakota Mining Company pays $8,595,840 for land estimated to contain 9,768,000 tons of recoverable ore. It installs and pays for machinery costing $1,074,480 on July 25. The company removes and sells 502,500 tons of ore during its first five months of operations ending on December 31. Depreciation of the machinery is in proportion to the mine's depletion as the machinery will be abandoned after the ore is mined. Required: Prepare entries to record the following. (a) The purchase of the land. (b) The cost and installation of machinery. (c) The first five months' depletion assuming the land has a net salvage value of zero after the ore is mined. (d) The first five months' depreciation on the machinery. Complete this question by entering your answers in the tabs below. Required A Required B Required C1 Required C2 Required D1 Required D2arrow_forwardDuring October, the first month of the fiscal year, sales totaled $750,000, and the cost of merchandise available for sale totaled $680,000. Estimate the cost of the merchandise inventory as of October 31, based on an estimated gross profit rate of 35%. Answerarrow_forwardgeneral accountingarrow_forward
- At the beginning of the recent period there were 1,080 units of product in a department, one-third completed. These units were finished and an additional 5,620 units were started and completed during the period. 960 units were still in process at the end of the period. One-fourth completed. Using the weighted-average valuation method the equivalent units produced by the department were____Units.arrow_forwardNo WRONG ANSWERarrow_forwardWhat is the revised depreciation expense for 2019?arrow_forward
- Principles of Cost AccountingAccountingISBN:9781305087408Author:Edward J. Vanderbeck, Maria R. MitchellPublisher:Cengage LearningExcel Applications for Accounting PrinciplesAccountingISBN:9781111581565Author:Gaylord N. SmithPublisher:Cengage Learning
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