The following materials standards have been established for a particular product: Standard quantity per unit of output Standard price 5.4 pounds $14.20 per pound The following data pertain to operations concerning the product for the last month: Actual materials purchased Actual cost of materials ourchased Actual materials used in production Actual output 6,300 pounds $63,880 5,800 pounds 800 units The direct materials purchases variance is computed when the materials are purchased. What is the materials quantity variance for the month?

The following materials standards have been established for a particular product: Standard quantity per unit of output Standard price 5.4 pounds $14.20 per pound The following data pertain to operations concerning the product for the last month: Actual materials purchased Actual cost of materials ourchased Actual materials used in production Actual output 6,300 pounds $63,880 5,800 pounds 800 units The direct materials purchases variance is computed when the materials are purchased. What is the materials quantity variance for the month?

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Description: The following materials standards have been established for a particular product:Standard quantity per unit of outputStandard price5.4 pounds$14.20 per poundThe following data pertain to operations concerning the product for the last month:Actual ma

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter8: Standard Costs And Variances

Section: Chapter Questions

Problem 5EB: Smith Industries uses a cost system that carries direct materials inventory at a standard cost. The...

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Yohan 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.)
Standard direct materials cost per unit from variance data The following data relating to direct materials cost for October of the current year are taken from the records of Good Clean Fun Inc., a manufacturer of organic toys: Determine the standard direct materials cost per unit of finished product, assuming that there was no inventory of work in process at either the beginning or the end of the month.
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?
On May 1, Athens Inc. began the manufacture of a new mechanical device known as Snap. The company installed a standard cost system in accounting for manufacturing costs. The standard direct materials and labor costs for a unit of Snap follow: The following data came from Athens’ records for May: The amount shown above for the materials price variance is applicable to raw materials purchased during May. Required: Compute each of the following items for Athens for May. Show computations in good form. Standard quantity of raw materials allowed (in pounds) for actual production. Actual quantity of raw materials used (in pounds). (Hint: Be sure to consider the materials quantity variance.) Standard direct labor hours allowed. Actual direct labor hours worked. (Hint: Be sure to consider the direct labor efficiency variance.) Actual direct labor rate. (Hint: Be sure to consider the direct labor rate variance.)
At the beginning of the year, Lopez Company had the following standard cost sheet for one of its chemical products: Lopez computes its overhead rates using practical volume, which is 80,000 units. The actual results for the year are as follows: (a) Units produced: 79,600; (b) Direct labor: 158,900 hours at 18.10; (c) FOH: 831,000; and (d) VOH: 112,400. Required: 1. Compute the variable overhead spending and efficiency variances. 2. Compute the fixed overhead spending and volume variances.
Cost and production data for Binghamton Beverages Inc. are presented as follows: Required: Calculate net variances for materials, labor, and factory overhead. Calculate specific materials and labor variances by department, using the diagram format in Figure 8-4. Comment on the possible causes for each of the variances that you computed. Make all journal entries to record production costs in Work in Process and Finished Goods. Determine the balance of ending Work in Process in each department. Assume that 4,000 units were sold at $40 each. Calculate the gross margin based on standard cost. Calculate the gross margin based on actual cost. Why does the gross margin at actual cost differ from the gross margin at standard cost. As the plant controller, you present the variance report in Item 1 above to Paul Crooke, the plant manager. After reading it, Paul states: “If we present this performance report to corporate with that large unfavorable labor variance in Blending, nobody in the plant will receive a bonus. Those standard hours of 5,500 are way too tight for this production process. Fifty-eight hundred hours would be more reasonable, and that would result in a favorable labor efficiency variance that would more than offset the unfavorable labor rate variance. Please redo the variance calculations using 5,800 hours as the standard.” You object, but Paul ends the conversation with, “That is an order.” What standards of ethical professional practice would be violated if you adhered to Paul’s order? How would you attempt to resolve this ethical conflict?
Materials and labor variances Fausto Fabricators Inc. uses a standard cost system to account for its single product. The standards established for the product include the following: The following operating data came from the records for the month: In process, beginning inventory, none. In process, ending inventory, 800 units, 80% complete as to labor; material is issued at the beginning of processing. Completed during the month, 5,600 units. Materials issued to production were 51,680 lb @ .55 per pound. Direct labor was 384,000 for 40,000 hours worked. Required: Calculate the following variances, using the diagram format in Figure 8-4. 1. Materials price. 2. Materials quantity. 3. Net materials variance. 4. Labor rate. 5. Labor efficiency. 6. Net labor variance. (Hint: Before determining the standard quantity for materials and labor, you must first compute the equivalent units of production for materials and labor.)
Direct 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.
The following materials standards have been established for a particular product: Standard quantity per unit of output Standard price 5.1 meters $17.90 per meter The following data pertain to operations concerning the product for the last month: Actual materials purchased Actual cost of materials purchased Actual materials used in production Actual output 7,700 meters $142,450 7,300 meters 1,400 units What is the materials price variance for the month?
The following standards have been established for a raw material used to make product 084: Standard quantity of the material per unit of output Standard price of the material 8.9 meters $ 19.00 per meter The following data pertain to a recent month's operations: Actual material purchased Actual cost of material purchased Actual material used in production Actual output 5,300 meters $ 104,520 5,100 meters 680 units of product 084 The direct materials purchases variance is computed when the materials are purchased. Required: a. What is the materials price variance for the month? b. What is the materials quantity variance for the month? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.) a. Materials price variance b. Materials quantity variance
Matt Company uses a standard cost system. Information for raw materials for Product RBI for the month of October is as follows: P1.60 Standard unit price P1.55 2,000 units Actual purchase price per unit Actual quantity purchased Actual quantity used 1,900 units 1,800 units Standard quantity allowed for actual production What is the materials purchase price variance?
The following materials standards have been established for a particular product: Standard quantity per unit of output Standard price 4.5 meters $18.80 per meter The following data pertain to operations concerning the product for the last month: Actual materials purchased Actual cost of materials purchased Actual materials used in production Actual output What is the materials price variance for the month? Multiple Choice $14,840 U $8,700 U $5,558 U $8,400 U 8,000 meters $ 158,800 7,300 meters 1,560 units