Direct material variances: Direct material variances refer to the difference between the standard direct material cost and actual direct material cost incurred. Direct material cost variances are categorized into following two categories: Direct material Rate variance : this variance shows the difference of standard rate and actual rate of material. The formula to calculate this variance is as follows: Direct material rate variance = ( Actual rate – Standard rate ) × Actual Quantity Direct material usage variance: this variance shows the difference of standard usage and actual usage of material. The formula to calculate this variance is as follows: Direct material usage variance = ( Actual Quantity – Standard Quantity ) × Standard rate Direct material cost or spending variance: this variance shows the difference of standard cost and actual cost of material. The formula to calculate this variance is as follows: Direct material cost variance = Direct material rate variance + Direct material usage variance To calculate: Direct Material Price, Quantity, and Spending variances.

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Answer 1

Question

Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

Chapter 9, Problem 9.1GAP

To determine

Concept introduction:

Direct material variances:

Direct material variances refer to the difference between the standard direct material cost and actual direct material cost incurred. Direct material cost variances are categorized into following two categories:

Direct material Rate variance: this variance shows the difference of standard rate and actual rate of material. The formula to calculate this variance is as follows:

Direct material rate variance = (Actual rate – Standard rate) ×Actual Quantity

Direct material usage variance: this variance shows the difference of standard usage and actual usage of material. The formula to calculate this variance is as follows:

Direct material usage variance = (Actual Quantity – Standard Quantity)×Standard rate

Direct material cost or spending variance: this variance shows the difference of standard cost and actual cost of material. The formula to calculate this variance is as follows:

Direct material cost variance = Direct material rate variance + Direct material usage variance

To calculate:

Direct Material Price, Quantity, and Spending variances.

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Pickul Awning manufactures awnings and uses a standard cost system. The company allocates overhead based on the number of direct labor hours. The following are the company's cost and standards data: (Click the icon to view the standards.) Requirement 1. Calculate the standard cost of one awning. Standard cost Direct materials Direct labor Variable MOH Fixed MOH Total standard cost Standard cost per unit Requirement 2a. Calculate the direct material variances. (Enter the variances as positive numbers. Enter currency amounts to the nearest cent and your answers to the nearest whole dollar. Label the variance as fa First determine the formula for the price variance, then compute the price variance for direct materials. Determine the formula for the quantity variance, then compute the quantity variance for direct materials. = DM price variance ) = First determine the formula for the efficiency variance, then compute the efficiency variance for direct labor. x( x( x ( x( = DM quantity…

Required information Use the following information for the Exercises below. (Algo) [The following information applies to the questions displayed below.] A manufactured product has the following information for June. Direct materials Direct labor Overhead Units manufactured Exercise 21-9 (Algo) Direct materials variances LO P3 AQ = Actual Quantity SQ = Standard Quantity AP = Actual Price SP = Standard Price Compute the (1) direct materials price variance and (2) direct materials quantity variance. (Indicate the effect of each variance by selecting favorable, unfavorable, or no variance. Round "Cost per unit" answers to 2 decimal places.) AQ Actual Cost X X 59,900✔ Standard Quantity and Cost 7 pounds @ $8 per pound 2 DLH @ $17 per DLH 2 DLH @ $12 per DLH 485,190 AP ✓ $ 8.10 $ 5,990 AQ 59,900✔ ✓$ 5,990 ✓ X X Actual Results 59,900 pounds @ $8.10 per pound 16,600 hours @ $17.50 per hour $ 209,600 8,500 units $479,200 SP $8.00 Direct materials price variance Unfavorable Unfavorable Direct…

What are the equations to find these answers? Calculate the direct materials price variance for March. b.Calculate the direct materials quantity variance for March. c.Calculate the direct labor rate variance for March. d.Calculate the direct labor efficiency variance for March. e.Calculate the variable overhead spending variance for March. f.Calculate the variable overhead efficiency variance for March. g.Calculate the fixed overhead spending variance for March.

Answer 2

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Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

Chapter 9, Problem 9.1GAP

To determine

Concept introduction:

Direct material variances:

Direct material variances refer to the difference between the standard direct material cost and actual direct material cost incurred. Direct material cost variances are categorized into following two categories:

Direct material Rate variance: this variance shows the difference of standard rate and actual rate of material. The formula to calculate this variance is as follows:

Direct material rate variance = (Actual rate – Standard rate) ×Actual Quantity

Direct material usage variance: this variance shows the difference of standard usage and actual usage of material. The formula to calculate this variance is as follows:

Direct material usage variance = (Actual Quantity – Standard Quantity)×Standard rate

Direct material cost or spending variance: this variance shows the difference of standard cost and actual cost of material. The formula to calculate this variance is as follows:

Direct material cost variance = Direct material rate variance + Direct material usage variance

To calculate:

Direct Material Price, Quantity, and Spending variances.

Expert Solution & Answer

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Check out a sample textbook solution

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Answer 3

Question

Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

Chapter 9, Problem 9.1GAP

To determine

Concept introduction:

Direct material variances:

Direct material variances refer to the difference between the standard direct material cost and actual direct material cost incurred. Direct material cost variances are categorized into following two categories:

Direct material Rate variance: this variance shows the difference of standard rate and actual rate of material. The formula to calculate this variance is as follows:

Direct material rate variance = (Actual rate – Standard rate) ×Actual Quantity

Direct material usage variance: this variance shows the difference of standard usage and actual usage of material. The formula to calculate this variance is as follows:

Direct material usage variance = (Actual Quantity – Standard Quantity)×Standard rate

Direct material cost or spending variance: this variance shows the difference of standard cost and actual cost of material. The formula to calculate this variance is as follows:

Direct material cost variance = Direct material rate variance + Direct material usage variance

To calculate:

Direct Material Price, Quantity, and Spending variances.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 4

Question

Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

Chapter 9, Problem 9.1GAP

To determine