(a) Concept introduction: Fixed overhead spending variances: It is the difference between budgeted fixed overhead and actual fixed overhead. To compute: The fixed overhead spending variances of P P.

Question

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Answer 1

Question

Chapter 9, Problem 9E

To determine

(a)

Concept introduction:

Fixed overhead spending variances:

It is the difference between budgeted fixed overhead and actual fixed overhead.

To compute:

The fixed overhead spending variances of P P.

To determine

(b)

Concept introduction:

Fixed overhead volume variance:

It is the difference between fixed overhead rate multiplied with actual volume and fixed overhead rate multiplied with budgeted volume.

To compute:

The fixed overhead volume variance.

To determine

(c)

Concept introduction:

Total of fixed overhead spending variance and fixed overhead volume variance is used to calculate over or under applied fixed manufacturing overhead.

To compute:

The over and under applied fixed manufacturing overhead.

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Recently, Abercrombie & Fitch has been implementing a turnaround strategy since its sales had been falling for the past few years (11% decrease in 2014, 8% in 2015, and just 3% in 2016.) One part of Abercrombie's new strategy has been to abandon its logo-adorned merchandise, replacing it with a subtler look. Abercrombie wrote down $20.6 million of inventory, including logo-adorned merchandise, during the year ending January 30, 2016. Some of this inventory dated back to late 2013. The write-down was net of the amount it would be able to recover selling the inventory at a discount. The write-down is significant; Abercrombie's reported net income after this write-down was $35.6 million. Interestingly, Abercrombie excluded the inventory write-down from its non-GAAP income measures presented to investors; GAAP earnings were also included in the same report. Question: What impact would the write-down of inventory have had on Abercrombie's expenses, Gross margin, and Net income?

Recently, Abercrombie & Fitch has been implementing a turnaround strategy since its sales had been falling for the past few years (11% decrease in 2014, 8% in 2015, and just 3% in 2016.) One part of Abercrombie's new strategy has been to abandon its logo-adorned merchandise, replacing it with a subtler look. Abercrombie wrote down $20.6 million of inventory, including logo-adorned merchandise, during the year ending January 30, 2016. Some of this inventory dated back to late 2013. The write-down was net of the amount it would be able to recover selling the inventory at a discount. The write-down is significant; Abercrombie's reported net income after this write-down was $35.6 million. Interestingly, Abercrombie excluded the inventory write-down from its non-GAAP income measures presented to investors; GAAP earnings were also included in the same report. Question: What impact would the write-down of inventory have had on Abercrombie's assets, Liabilities, and Equity?

Answer 2

Question

Chapter 9, Problem 9E

To determine

(a)

Concept introduction:

Fixed overhead spending variances:

It is the difference between budgeted fixed overhead and actual fixed overhead.

To compute:

The fixed overhead spending variances of P P.

To determine

(b)

Concept introduction:

Fixed overhead volume variance:

It is the difference between fixed overhead rate multiplied with actual volume and fixed overhead rate multiplied with budgeted volume.

To compute:

The fixed overhead volume variance.

To determine

(c)

Concept introduction:

Total of fixed overhead spending variance and fixed overhead volume variance is used to calculate over or under applied fixed manufacturing overhead.

To compute:

The over and under applied fixed manufacturing overhead.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 3

Question

Chapter 9, Problem 9E

To determine

(a)

Concept introduction:

Fixed overhead spending variances:

It is the difference between budgeted fixed overhead and actual fixed overhead.

To compute:

The fixed overhead spending variances of P P.

To determine

(b)

Concept introduction:

Fixed overhead volume variance:

It is the difference between fixed overhead rate multiplied with actual volume and fixed overhead rate multiplied with budgeted volume.

To compute:

The fixed overhead volume variance.

To determine

(c)

Concept introduction:

Total of fixed overhead spending variance and fixed overhead volume variance is used to calculate over or under applied fixed manufacturing overhead.

To compute:

The over and under applied fixed manufacturing overhead.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 9, Problem 9E

To determine

(a)

Concept introduction:

Fixed overhead spending variances:

It is the difference between budgeted fixed overhead and actual fixed overhead.

To compute:

The fixed overhead spending variances of P P.

To determine

(b)

Concept introduction:

Fixed overhead volume variance:

It is the difference between fixed overhead rate multiplied with actual volume and fixed overhead rate multiplied with budgeted volume.

To compute:

The fixed overhead volume variance.

To determine

(c)

Concept introduction:

Total of fixed overhead spending variance and fixed overhead volume variance is used to calculate over or under applied fixed manufacturing overhead.

To compute:

The over and under applied fixed manufacturing overhead.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 5

Chapter 9, Problem 9E

To determine

(a)

Concept introduction:

Fixed overhead spending variances:

It is the difference between budgeted fixed overhead and actual fixed overhead.

To compute:

The fixed overhead spending variances of P P.

To determine

(b)

Concept introduction:

Fixed overhead volume variance:

It is the difference between fixed overhead rate multiplied with actual volume and fixed overhead rate multiplied with budgeted volume.

To compute:

The fixed overhead volume variance.

To determine

(c)

Concept introduction:

Total of fixed overhead spending variance and fixed overhead volume variance is used to calculate over or under applied fixed manufacturing overhead.

To compute:

The over and under applied fixed manufacturing overhead.

Answer 6

Chapter 9, Problem 9E

To determine

(a)

Concept introduction:

Fixed overhead spending variances:

It is the difference between budgeted fixed overhead and actual fixed overhead.

To compute:

The fixed overhead spending variances of P P.

Answer 7

Chapter 9, Problem 9E

To determine

(a)

Concept introduction:

Fixed overhead spending variances:

It is the difference between budgeted fixed overhead and actual fixed overhead.

To compute:

The fixed overhead spending variances of P P.

Answer 8

To determine

(b)

Concept introduction:

Fixed overhead volume variance:

It is the difference between fixed overhead rate multiplied with actual volume and fixed overhead rate multiplied with budgeted volume.

To compute:

The fixed overhead volume variance.

Answer 9

To determine

(b)

Concept introduction:

Fixed overhead volume variance:

It is the difference between fixed overhead rate multiplied with actual volume and fixed overhead rate multiplied with budgeted volume.

To compute:

The fixed overhead volume variance.

Answer 10

To determine

(c)

Concept introduction:

Total of fixed overhead spending variance and fixed overhead volume variance is used to calculate over or under applied fixed manufacturing overhead.

To compute:

The over and under applied fixed manufacturing overhead.

Answer 11

To determine

(c)

Concept introduction:

Total of fixed overhead spending variance and fixed overhead volume variance is used to calculate over or under applied fixed manufacturing overhead.

To compute:

The over and under applied fixed manufacturing overhead.

Answer 12

Expert Solution & Answer

Answer 13

Expert Solution & Answer

Answer 14

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Answer 15

Ch. 9 - Briefly describe the difference between budgetary...Ch. 9 - What are standard costs? When are they set?Ch. 9 - Prob. 3Q Ch. 9 - Prob. 4Q Ch. 9 - Prob. 5Q Ch. 9 - Prob. 6Q Ch. 9 - Prob. 7Q Ch. 9 - Prob. 8Q Ch. 9 - Prob. 9Q Ch. 9 - How do the master budget, flexible budget, and...

(a) Concept introduction: Fixed overhead spending variances: It is the difference between budgeted fixed overhead and actual fixed overhead. To compute: The fixed overhead spending variances of P P.

Solution Summary: The author explains the fixed overhead spending variances of P P.

Concept explainers

Videos

(a)

Concept introduction:

Fixed overhead spending variances:

It is the difference between budgeted fixed overhead and actual fixed overhead.

To compute:

The fixed overhead spending variances of P P.

(b)

Concept introduction:

Fixed overhead volume variance:

It is the difference between fixed overhead rate multiplied with actual volume and fixed overhead rate multiplied with budgeted volume.

To compute:

The fixed overhead volume variance.

(c)

Concept introduction:

Total of fixed overhead spending variance and fixed overhead volume variance is used to calculate over or under applied fixed manufacturing overhead.

To compute:

The over and under applied fixed manufacturing overhead.

Want to see the full answer?

Chapter 9 Solutions

(a) Concept introduction: Fixed overhead spending variances: It is the difference between budgeted fixed overhead and actual fixed overhead. To compute: The fixed overhead spending variances of P P.

Solution Summary: The author explains the fixed overhead spending variances of P P.

Concept explainers

Videos

(a) Concept introduction: Fixed overhead spending variances: It is the difference between budgeted fixed overhead and actual fixed overhead. To compute: The fixed overhead spending variances of P P.

(b) Concept introduction: Fixed overhead volume variance: It is the difference between fixed overhead rate multiplied with actual volume and fixed overhead rate multiplied with budgeted volume. To compute: The fixed overhead volume variance.

(c) Concept introduction: Total of fixed overhead spending variance and fixed overhead volume variance is used to calculate over or under applied fixed manufacturing overhead. To compute: The over and under applied fixed manufacturing overhead.

Want to see the full answer?

Chapter 9 Solutions

(a)

Concept introduction:

Fixed overhead spending variances:

It is the difference between budgeted fixed overhead and actual fixed overhead.

To compute:

The fixed overhead spending variances of P P.

(b)

Concept introduction:

Fixed overhead volume variance:

It is the difference between fixed overhead rate multiplied with actual volume and fixed overhead rate multiplied with budgeted volume.

To compute:

The fixed overhead volume variance.

(c)

Concept introduction:

Total of fixed overhead spending variance and fixed overhead volume variance is used to calculate over or under applied fixed manufacturing overhead.

To compute:

The over and under applied fixed manufacturing overhead.