GEN COMBO LOOSELEAF INTRODUCTION TO MANAGERIAL ACCOUNTING; CONNECT AC
8th Edition
ISBN: 9781260259179
Author: BREWER
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Concept explainers
Textbook Question
Chapter 9.A, Problem 5E
Using Fixed
The
Manufacturing overhead is applied to production on the basis of standard direct labor-hours. During the year, the company worked 37.000 hours and manufactured 9.500 units of product. Selected data relating to the company:s fixed
Required:
- What were the standard hours allowed for the years production?
- What was the amount of budgeted fixed overhead cost for the year?
- What was the fixed overhead
budget variance for the year? - What denominator activity level did the company use in setting the predetermined overhead rate for the year?
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionChapter 9 Solutions
GEN COMBO LOOSELEAF INTRODUCTION TO MANAGERIAL ACCOUNTING; CONNECT AC
Ch. 9.A - Fixed Overhead Variances Primara Corporation has a...Ch. 9.A - Predetermined Overhead Rate: Overhead Variances...Ch. 9.A - Applying Overhead in a Standard Costing System...Ch. 9.A - Prob. 4ECh. 9.A - Using Fixed Overhead Variances The standard cost...Ch. 9.A - Prob. 6ECh. 9.A - Relations Among Fixed Overhead Variances Selected...Ch. 9.A - Applying Overhead; Overhead Variances Lane Company...Ch. 9.A - Applying Overhead; Overhead Variances Chilczuk....Ch. 9.A - Comprehensive Standard Cost Variances "Wonderful!...
Ch. 9.A - Comprehensive Standard Cost Variances Flandro...Ch. 9.A - Selection of a Denominator: Overhead Analysis:...Ch. 9.B - Standard Cost Flows: Income Statement Preparation...Ch. 9.B - Standard Cost Flows: Income Statement Preparation...Ch. 9.B - Standard Cost Flows Bowen Company manufactures one...Ch. 9.B - Standard Cost Flows Hartwell Company manufactures...Ch. 9.B - Transaction Analysis; Income Statement Preparation...Ch. 9.B - Transaction Analysis; Income Statement Preparation...Ch. 9 - What is a static planning budget?Ch. 9 - What is a flexible budget and how does it differ...Ch. 9 - What are some of the possible reasons that actual...Ch. 9 - Why is it difficult to interpret a difference...Ch. 9 - What is a revenue variance and what does it mean?Ch. 9 - What is a spending variance and what does it mean?Ch. 9 - What does a flexible budget enable that a simple...Ch. 9 - How does a flexibe budget based on the cost...Ch. 9 - Prob. 9QCh. 9 - Why are separate price and quantity variances...Ch. 9 - Who is generally responsible for the materials...Ch. 9 - Prob. 12QCh. 9 - Prob. 13QCh. 9 - Our workers are all under labor contracts:...Ch. 9 - Prob. 15QCh. 9 - Prob. 16QCh. 9 - Prob. 17QCh. 9 - The Excel worksheet form that appears below is to...Ch. 9 - Prob. 2AECh. 9 - Preble Company manufactures one product. Its...Ch. 9 - Prob. 2F15Ch. 9 - Preble Company manufactures one product. Its...Ch. 9 - Prob. 4F15Ch. 9 - Prob. 5F15Ch. 9 - Prob. 6F15Ch. 9 - Preble Company manufactures one product. Its...Ch. 9 - Prob. 8F15Ch. 9 - Prob. 9F15Ch. 9 - Prob. 10F15Ch. 9 - Prob. 11F15Ch. 9 - Preble Company manufactures one product. Its...Ch. 9 - Prob. 13F15Ch. 9 - Preble Company manufactures one product. Its...Ch. 9 - Preble Company manufactures one product. Its...Ch. 9 - Prepare a Flexible Budget Puget Sound Divers is a...Ch. 9 - Prepare a Report Shong Revenue and Spending...Ch. 9 - Prepare a Flexible Budget with More Than One Cost...Ch. 9 - Direct Materials Variances Bandar Industries...Ch. 9 - Prob. 5ECh. 9 - Prob. 6ECh. 9 - Planning Budget Lavage Rapide is a Canadian...Ch. 9 - EXERCISE 98 Flexible Budget L091 Refer to the data...Ch. 9 - Prepare a Report Showing Revenue and Spending...Ch. 9 - Direct Labor and Variable Manufacturing Overhead...Ch. 9 - Prob. 11ECh. 9 - Working with More Than One Cost Driver The...Ch. 9 - Direct Materials and Direct Labor Variances Huron...Ch. 9 - Direct Materials Variances Refer to the data in...Ch. 9 - Prob. 15ECh. 9 - Prob. 16ECh. 9 - Prob. 17ECh. 9 - Comprehensive Variance Analysis Miller Toy Company...Ch. 9 - More than One Cost Driver Milano Pizza is a small...Ch. 9 - Basic Variance Analysis: the Impact of Vanances on...Ch. 9 - Multiple Products. Materials, and Processes...Ch. 9 - Variance Analysis In a Hospital John Fleming,...Ch. 9 - Flexible Budgets and Spending Variances You have...Ch. 9 - Comprehensive Variance Analysis Marvel Parts....Ch. 9 - Direct Materials and Direct Labor Variances:...Ch. 9 - Comprehensive Variance Analysis Highland Company...
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Georgia Gasket Co. budgets 8,000 direct labor hours for the year. The total overhead budget is expected to amount to 20,000. The standard cost for a unit of the companys product estimates the variable overhead as follows: The actual data for the period follow: Using the four-variance method, calculate the overhead variances. (Hint: First compute the budgeted fixed overhead rate.)arrow_forwardFlaherty, Inc., has just completed its first year of operations. The unit costs on a normal costing basis are as follows: During the year, the company had the following activity: Actual fixed overhead was 12,000 less than budgeted fixed overhead. Budgeted variable overhead was 5,000 less than the actual variable overhead. The company used an expected actual activity level of 12,000 direct labor hours to compute the predetermined overhead rates. Any overhead variances are closed to Cost of Goods Sold. Required: 1. Compute the unit cost using (a) absorption costing and (b) variable costing. 2. Prepare an absorption-costing income statement. 3. Prepare a variable-costing income statement. 4. Reconcile the difference between the two income statements.arrow_forwardEagle Inc. uses a standard cost system. During the most recent period, the company manufactured 115,000 units. The standard cost sheet indicates that the standard direct labor cost per unit is $1.50. The performance report for the period includes an unfavorable direct labor rate variance of $3,700 and a favorable direct labor time variance of $10,275. What was the total actual cost of direct labor incurred during the period?arrow_forward
- Business Specialty, Inc., manufactures two staplers: small and regular. The standard quantities of direct labor and direct materials per unit for the year are as follows: The standard price paid per pound of direct materials is 1.60. The standard rate for labor is 8.00. Overhead is applied on the basis of direct labor hours. A plantwide rate is used. Budgeted overhead for the year is as follows: The company expects to work 12,000 direct labor hours during the year; standard overhead rates are computed using this activity level. For every small stapler produced, the company produces two regular staplers. Actual operating data for the year are as follows: a. Units produced: small staplers, 35,000; regular staplers, 70,000. b. Direct materials purchased and used: 56,000 pounds at 1.5513,000 for the small stapler and 43,000 for the regular stapler. There were no beginning or ending direct materials inventories. c. Direct labor: 14,800 hours3,600 hours for the small stapler and 11,200 hours for the regular stapler. Total cost of direct labor: 114,700. d. Variable overhead: 607,500. e. Fixed overhead: 350,000. Required: 1. Prepare a standard cost sheet showing the unit cost for each product. 2. Compute the direct materials price and usage variances for each product. Prepare journal entries to record direct materials activity. 3. Compute the direct labor rate and efficiency variances for each product. Prepare journal entries to record direct labor activity. 4. Compute the variances for fixed and variable overhead. Prepare journal entries to record overhead activity. All variances are closed to Cost of Goods Sold. 5. Assume that you know only the total direct materials used for both products and the total direct labor hours used for both products. Can you compute the total direct materials and direct labor usage variances? Explain.arrow_forwardCalculation of materials and labor variances Fritz Corp. manufactures and sells a single product. The company uses a standard cost system. The standard cost per unit of product follows: The charges to the manufacturing department for November, when 5,000 units were produced, follow: The Purchasing department normally buys about the same quantity as is used in production during a month. In November, 5,500 lb were purchased at a price of $2.90 per pound. Required: Calculate the following from standard costs for the data given, using the formulas on pages 421–422 and 424: Materials quantity variance. Materials purchase price variance (at time of purchase). Labor efficiency variance. Labor rate variance. Give some reasons as to why both the materials quantity variance and labor efficiency variance might be unfavorable.arrow_forwardDirect materials and direct labor variance analysis Lenni Clothing Co. manufactures clothing in a small manufacturing facility. Manufacturing has 25 employees. Each employee presently provides 40 hours of productive labor per week. Information about a production week is as follows: Instructions Determine (A) the standard cost per unit for direct materials and direct labor; (B) the price variance, quantity variance, and total direct materials cost variance; and (C) the rate variance, time variance, and total direct labor cost variance.arrow_forward
- Calculating amount of factory overhead applied to work in process The overhead application rate for a company is 2.50 per unit, made up of 1.00 for fixed overhead and 1.50 for variable overhead. Normal capacity is 10,000 units. In one month, there was an unfavorable flexible budget variance of 200. Actual overhead for the month was 27,000. What was the amount of the budgeted overhead for the actual level of production?arrow_forwardMisterio Company uses a standard costing system. During the past quarter, the following variances were computed: Misterio applies variable overhead using a standard rate of 2 per direct labor hour allowed. Two direct labor hours are allowed per unit produced. (Only one type of product is manufactured.) During the quarter, Misterio used 30 percent more direct labor hours than should have been used. Required: 1. What were the actual direct labor hours worked? The total hours allowed? 2. What is the standard hourly rate for direct labor? The actual hourly rate? 3. How many actual units were produced?arrow_forwardYohan Company has the following balances in its direct materials and direct labor variance accounts at year-end: Unadjusted Cost of Goods Sold equals 1,500,000, unadjusted Work in Process equals 236,000, and unadjusted Finished Goods equals 180,000. Required: 1. Assume that the ending balances in the variance accounts are immaterial and prepare the journal entries to close them to Cost of Goods Sold. What is the adjusted balance in Cost of Goods Sold after closing out the variances? 2. What if any ending balance in a variance account that exceeds 10,000 is considered material? Close the immaterial variance accounts to Cost of Goods Sold and prorate the material variances among Cost of Goods Sold, Work in Process, and Finished Goods on the basis of prime costs in these accounts. The prime cost in Cost of Goods Sold is 1,050,000, the prime cost in Work in Process is 165,200, and the prime cost in Finished Goods is 126,000. What are the adjusted balances in Work in Process, Finished Goods, and Cost of Goods Sold after closing out all variances? (Round ratios to four significant digits. Round journal entries to the nearest dollar.)arrow_forward
- Smith Industries uses a cost system that carries direct materials inventory at a standard cost. The controller has established these standards for the cost of one basket (unit): Smith Industries made 3,000 baskets in July and used 15,500 pounds of material to make these units. Smith Industries paid $39,370 for the 15,500 pounds of material. A. What was the direct materials price variance for July? B. What was the direct materials quantity variance for July? C. What is the total direct materials cost variance? D. If Smith Industries used 15,750 pounds to make the baskets, what would be the direct materials quantity variance?arrow_forwardCalculating factory overhead The standard capacity of a factory is 8,000 units per month. Cost and production data follow: Calculate the amount of factory overhead allowed for the actual volume of production each month and the variance between budgeted and actual overhead for each month.arrow_forwardCase made 24,500 units during June, using 32,000 direct labor hours. They expected to use 31,450 hours per the standard cost card. Their employees were paid $15.75 per hour for the month of June. The standard cost card uses $15.50 as the standard hourly rate. A. Compute the direct labor rate and time variances for the month of June, and also calculate the total direct labor variance. B. If the standard rate per hour was $16.00, what would change?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Principles of Cost AccountingAccountingISBN:9781305087408Author:Edward J. Vanderbeck, Maria R. MitchellPublisher:Cengage LearningManagerial Accounting: The Cornerstone of Busines...AccountingISBN:9781337115773Author:Maryanne M. Mowen, Don R. Hansen, Dan L. HeitgerPublisher:Cengage LearningPrinciples of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax College
- Managerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College PubFinancial And Managerial AccountingAccountingISBN:9781337902663Author:WARREN, Carl S.Publisher:Cengage Learning,Cornerstones of Cost Management (Cornerstones Ser...AccountingISBN:9781305970663Author:Don R. Hansen, Maryanne M. MowenPublisher:Cengage Learning
Principles of Cost Accounting
Accounting
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Cengage Learning
Managerial Accounting: The Cornerstone of Busines...
Accounting
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Cengage Learning
Principles of Accounting Volume 2
Accounting
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax College
Managerial Accounting
Accounting
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:South-Western College Pub
Financial And Managerial Accounting
Accounting
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:Cengage Learning,
Cornerstones of Cost Management (Cornerstones Ser...
Accounting
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Cengage Learning
What is variance analysis?; Author: Corporate finance institute;https://www.youtube.com/watch?v=SMTa1lZu7Qw;License: Standard YouTube License, CC-BY