The spending variance for June

Question

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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 IE, Problem 1IE

To determine

To calculate: The spending variance for June

Expert Solution

Answer to Problem 1IE

Solution: The spending variance for June is $8 Favorable

Explanation of Solution

The spending variance for June is calculated as follows:

Actual Cost per unit (A) (2632/1100)	$ 2.3927
Standard Cost per unit (B)	2.4
Actual Units (C)	1100
*Spending Variance (A-B)C =**	$ 8	Favorable

Conclusion

The spending variance for June is $8 Favorable

Requirement-3:

To determine

To calculate: The material price, quantity and spending variances

Expert Solution

Answer to Problem 1IE

Solution: The material price, quantity and spending variances are as follows:

Direct Material Price Variance	$ 188	Favorable
Direct Material Quantity Variance	$ 180	Unfavorable
Material Spending Variance	$ 8	Favorable

Explanation of Solution

The material price, quantity and spending variances are calculated as follows:

Material Price Variance:
Actual Price (A) (2632/9400)	$ 0.28	Per Ounce
Standard Price (B)	$ 0.30	Per Ounce
Actual Quantity (C)	9400	Pounds
*Material Price Variance = (A-B)C =**	$ 188	Favorable

Material Quantity Variance:
Actual Quantity (A)	9400	Ounces
Standard Quantity (B) (1100 units *8 ounces)	8800	Ounces
Standard Price (C)	$ 0.30	Per Ounce
*Material Quantity Variance = (A-B)C =**	$ 180	Unfavorable

Material Spending Variance (188-180)	$ 8	Favorable

Conclusion

Hence material spending variance is the sum of Material Quantity Variance and Material Quantity Variance.

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A company sells a product for $25 per unit. The variable cost per unit is $15, and the total fixed costs are $50,000. a) How many units must the company sell to break even? b) If the company wants a profit of $10,000, how many units must it sell?

Answer 2

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 IE, Problem 1IE

To determine

To calculate: The spending variance for June

Expert Solution

Answer to Problem 1IE

Solution: The spending variance for June is $8 Favorable

Explanation of Solution

The spending variance for June is calculated as follows:

Actual Cost per unit (A) (2632/1100)	$ 2.3927
Standard Cost per unit (B)	2.4
Actual Units (C)	1100
*Spending Variance (A-B)C =**	$ 8	Favorable

Conclusion

The spending variance for June is $8 Favorable

Requirement-3:

To determine

To calculate: The material price, quantity and spending variances

Expert Solution

Answer to Problem 1IE

Solution: The material price, quantity and spending variances are as follows:

Direct Material Price Variance	$ 188	Favorable
Direct Material Quantity Variance	$ 180	Unfavorable
Material Spending Variance	$ 8	Favorable

Explanation of Solution

The material price, quantity and spending variances are calculated as follows:

Material Price Variance:
Actual Price (A) (2632/9400)	$ 0.28	Per Ounce
Standard Price (B)	$ 0.30	Per Ounce
Actual Quantity (C)	9400	Pounds
*Material Price Variance = (A-B)C =**	$ 188	Favorable

Material Quantity Variance:
Actual Quantity (A)	9400	Ounces
Standard Quantity (B) (1100 units *8 ounces)	8800	Ounces
Standard Price (C)	$ 0.30	Per Ounce
*Material Quantity Variance = (A-B)C =**	$ 180	Unfavorable

Material Spending Variance (188-180)	$ 8	Favorable

Conclusion

Hence material spending variance is the sum of Material Quantity Variance and Material Quantity Variance.

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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 IE, Problem 1IE

To determine

To calculate: The spending variance for June

Expert Solution

Answer to Problem 1IE

Solution: The spending variance for June is $8 Favorable

Explanation of Solution

The spending variance for June is calculated as follows:

Actual Cost per unit (A) (2632/1100)	$ 2.3927
Standard Cost per unit (B)	2.4
Actual Units (C)	1100
*Spending Variance (A-B)C =**	$ 8	Favorable

Conclusion

The spending variance for June is $8 Favorable

Requirement-3:

To determine

To calculate: The material price, quantity and spending variances

Expert Solution

Answer to Problem 1IE

Solution: The material price, quantity and spending variances are as follows:

Direct Material Price Variance	$ 188	Favorable
Direct Material Quantity Variance	$ 180	Unfavorable
Material Spending Variance	$ 8	Favorable

Explanation of Solution

The material price, quantity and spending variances are calculated as follows:

Material Price Variance:
Actual Price (A) (2632/9400)	$ 0.28	Per Ounce
Standard Price (B)	$ 0.30	Per Ounce
Actual Quantity (C)	9400	Pounds
*Material Price Variance = (A-B)C =**	$ 188	Favorable

Material Quantity Variance:
Actual Quantity (A)	9400	Ounces
Standard Quantity (B) (1100 units *8 ounces)	8800	Ounces
Standard Price (C)	$ 0.30	Per Ounce
*Material Quantity Variance = (A-B)C =**	$ 180	Unfavorable

Material Spending Variance (188-180)	$ 8	Favorable

Conclusion

Hence material spending variance is the sum of Material Quantity Variance and Material Quantity Variance.

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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 IE, Problem 1IE

To determine

To calculate: The spending variance for June

Expert Solution

Answer to Problem 1IE

Solution: The spending variance for June is $8 Favorable

Explanation of Solution

The spending variance for June is calculated as follows:

Actual Cost per unit (A) (2632/1100)	$ 2.3927
Standard Cost per unit (B)	2.4
Actual Units (C)	1100
*Spending Variance (A-B)C =**	$ 8	Favorable

Conclusion

The spending variance for June is $8 Favorable

Requirement-3:

To determine

To calculate: The material price, quantity and spending variances

Expert Solution

Answer to Problem 1IE

Solution: The material price, quantity and spending variances are as follows:

Direct Material Price Variance	$ 188	Favorable
Direct Material Quantity Variance	$ 180	Unfavorable
Material Spending Variance	$ 8	Favorable

Explanation of Solution

The material price, quantity and spending variances are calculated as follows:

Material Price Variance:
Actual Price (A) (2632/9400)	$ 0.28	Per Ounce
Standard Price (B)	$ 0.30	Per Ounce
Actual Quantity (C)	9400	Pounds
*Material Price Variance = (A-B)C =**	$ 188	Favorable

Material Quantity Variance:
Actual Quantity (A)	9400	Ounces
Standard Quantity (B) (1100 units *8 ounces)	8800	Ounces
Standard Price (C)	$ 0.30	Per Ounce
*Material Quantity Variance = (A-B)C =**	$ 180	Unfavorable

Material Spending Variance (188-180)	$ 8	Favorable

Conclusion

Hence material spending variance is the sum of Material Quantity Variance and Material Quantity Variance.

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Answer 5

Chapter IE, Problem 1IE

To determine

To calculate: The spending variance for June

Expert Solution

Answer to Problem 1IE

Solution: The spending variance for June is $8 Favorable

Explanation of Solution

The spending variance for June is calculated as follows:

Actual Cost per unit (A) (2632/1100)	$ 2.3927
Standard Cost per unit (B)	2.4
Actual Units (C)	1100
*Spending Variance (A-B)C =**	$ 8	Favorable

Conclusion

The spending variance for June is $8 Favorable

Requirement-3:

To determine

To calculate: The material price, quantity and spending variances

Expert Solution

Answer to Problem 1IE

Solution: The material price, quantity and spending variances are as follows:

Direct Material Price Variance	$ 188	Favorable
Direct Material Quantity Variance	$ 180	Unfavorable
Material Spending Variance	$ 8	Favorable

Explanation of Solution

The material price, quantity and spending variances are calculated as follows:

Material Price Variance:
Actual Price (A) (2632/9400)	$ 0.28	Per Ounce
Standard Price (B)	$ 0.30	Per Ounce
Actual Quantity (C)	9400	Pounds
*Material Price Variance = (A-B)C =**	$ 188	Favorable

Material Quantity Variance:
Actual Quantity (A)	9400	Ounces
Standard Quantity (B) (1100 units *8 ounces)	8800	Ounces
Standard Price (C)	$ 0.30	Per Ounce
*Material Quantity Variance = (A-B)C =**	$ 180	Unfavorable

Material Spending Variance (188-180)	$ 8	Favorable

Conclusion

Hence material spending variance is the sum of Material Quantity Variance and Material Quantity Variance.

Answer 6

Chapter IE, Problem 1IE

To determine

To calculate: The spending variance for June

Expert Solution

Answer to Problem 1IE

Solution: The spending variance for June is $8 Favorable

Explanation of Solution

The spending variance for June is calculated as follows:

Actual Cost per unit (A) (2632/1100)	$ 2.3927
Standard Cost per unit (B)	2.4
Actual Units (C)	1100
*Spending Variance (A-B)C =**	$ 8	Favorable

Conclusion

The spending variance for June is $8 Favorable

Requirement-3:

Answer 7

Chapter IE, Problem 1IE

To determine

To calculate: The spending variance for June

Answer 8

Expert Solution

Answer to Problem 1IE

Solution: The spending variance for June is $8 Favorable

Answer 9

Expert Solution

Answer 10

Expert Solution

Answer 11

Expert Solution

Answer 12

Explanation of Solution

The spending variance for June is calculated as follows:

Actual Cost per unit (A) (2632/1100)	$ 2.3927
Standard Cost per unit (B)	2.4
Actual Units (C)	1100
*Spending Variance (A-B)C =**	$ 8	Favorable

Answer 13

Conclusion

The spending variance for June is $8 Favorable

Requirement-3:

Answer 14

To determine

To calculate: The material price, quantity and spending variances

Expert Solution

Answer to Problem 1IE

Solution: The material price, quantity and spending variances are as follows:

Direct Material Price Variance	$ 188	Favorable
Direct Material Quantity Variance	$ 180	Unfavorable
Material Spending Variance	$ 8	Favorable

Explanation of Solution

The material price, quantity and spending variances are calculated as follows:

Material Price Variance:
Actual Price (A) (2632/9400)	$ 0.28	Per Ounce
Standard Price (B)	$ 0.30	Per Ounce
Actual Quantity (C)	9400	Pounds
*Material Price Variance = (A-B)C =**	$ 188	Favorable

Material Quantity Variance:
Actual Quantity (A)	9400	Ounces
Standard Quantity (B) (1100 units *8 ounces)	8800	Ounces
Standard Price (C)	$ 0.30	Per Ounce
*Material Quantity Variance = (A-B)C =**	$ 180	Unfavorable

Material Spending Variance (188-180)	$ 8	Favorable

Conclusion

Hence material spending variance is the sum of Material Quantity Variance and Material Quantity Variance.

Answer 15

To determine

To calculate: The material price, quantity and spending variances

Answer 16

Expert Solution

Answer to Problem 1IE

Solution: The material price, quantity and spending variances are as follows:

Direct Material Price Variance	$ 188	Favorable
Direct Material Quantity Variance	$ 180	Unfavorable
Material Spending Variance	$ 8	Favorable

Answer 17

Expert Solution

Answer 18

Expert Solution

Answer 19

Expert Solution

Answer 20

Explanation of Solution

The material price, quantity and spending variances are calculated as follows:

Material Price Variance:
Actual Price (A) (2632/9400)	$ 0.28	Per Ounce
Standard Price (B)	$ 0.30	Per Ounce
Actual Quantity (C)	9400	Pounds
*Material Price Variance = (A-B)C =**	$ 188	Favorable

Material Quantity Variance:
Actual Quantity (A)	9400	Ounces
Standard Quantity (B) (1100 units *8 ounces)	8800	Ounces
Standard Price (C)	$ 0.30	Per Ounce
*Material Quantity Variance = (A-B)C =**	$ 180	Unfavorable

Material Spending Variance (188-180)	$ 8	Favorable