Fundamentals Of Cost Accounting (6th Edition)
6th Edition
ISBN: 9781259969478
Author: WILLIAM LANEN, Shannon Anderson, Michael Maher
Publisher: McGraw Hill Education
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Textbook Question
Chapter 16, Problem 16CADQ
“My firm has a wage contract with the union. Therefore, we do not need to compute a labor price variance; it will always be zero.” Comment.
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All of our workers are under labor contracts. That means our labor rate variance must be zero.
1. What are the three primary reasons of using a standard
cost system? In a business that routinely manufactures the
same products or performs the same services, why are
standards helpful?
2. What are ideal standards? What are currently attainable
standards? Explain which standard is usually adopted and
why.
3. Some people suggest that the direct labor rate variance is
never controllable. Do you agree or disagree? Give
reasons to support your answer.
8. "Hourly wage rates are an anachronism. Efficiency requires incentive-based pay and tied
to performance". Discuss this statement.
Chapter 16 Solutions
Fundamentals Of Cost Accounting (6th Edition)
Ch. 16 - What are the advantages of the contribution margin...Ch. 16 - How can a budget be used for performance...Ch. 16 - The flexible budget for coats it computed by...Ch. 16 - A flexible budget is: a. Appropriate for control...Ch. 16 - What is the standard cost sheet?Ch. 16 - What is the basic difference between a mailer...Ch. 16 - Standards and budgets are the same thing. True or...Ch. 16 - Actual direct materials costs differ from the...Ch. 16 - Fixed cost variances are computed differently from...Ch. 16 - What is the advantage of preparing the flexible...
Ch. 16 - What is the link between flexible budgeting and...Ch. 16 - Actual revenues are greater than budgeted for...Ch. 16 - Pick an organization you know, such as a school,...Ch. 16 - Give two reasons why dividing production cost...Ch. 16 - Prob. 15CADQCh. 16 - My firm has a wage contract with the union....Ch. 16 - Prob. 17CADQCh. 16 - The production volume variance should be charged...Ch. 16 - Prob. 19CADQCh. 16 - Prob. 20CADQCh. 16 - Flexible Budgeting The master budget at Western...Ch. 16 - Sales Activity Variance Refer to the data in...Ch. 16 - Profit Variance Analysis Refer to the data in...Ch. 16 - Flexible Budget Given the data shown in the...Ch. 16 - Fill in Amounts on Flexible Budget Graph Fill in...Ch. 16 - Flexible Budget Label (a) and (b) in the graph and...Ch. 16 - Prepare Flexible Budget Osage, Inc., manufactures...Ch. 16 - Sales Activity Variance Refer to the data in...Ch. 16 - Profit Variance Analysis Use the information from...Ch. 16 - Sales Activity Variance The following data are...Ch. 16 - Sales Activity Variance Selected data for October...Ch. 16 - Prob. 32ECh. 16 - Prob. 33ECh. 16 - Prob. 34ECh. 16 - Prob. 35ECh. 16 - Prob. 36ECh. 16 - Prob. 37ECh. 16 - Variable Cost Variances The following data reflect...Ch. 16 - Variable Cost Variances The records of Norton,...Ch. 16 - (Appendix used in requirement [b]) Variable Cost...Ch. 16 - (Appendix used in requirement [b]) Variable Cost...Ch. 16 - Fixed Cost Variances Information on Carney...Ch. 16 - Prob. 43ECh. 16 - Prob. 44ECh. 16 - Fixed Cost Variances Mint Company applies fixed...Ch. 16 - Prob. 46ECh. 16 - Prob. 47ECh. 16 - (Appendix used in requirement [c]) Comprehensive...Ch. 16 - Comprehensive Cost Variance Analysis NSF Lube is a...Ch. 16 - Overhead Variances Brice Corporation shows the...Ch. 16 - Solve for Master Budget Given Actual Results A new...Ch. 16 - Find Missing Data for Profit Variance Analysis...Ch. 16 - Find Data for Profit Variance Analysis Required...Ch. 16 - Prob. 54PCh. 16 - Prepare Flexible Budget Odessa, Inc., reports the...Ch. 16 - Prob. 56PCh. 16 - Prob. 57PCh. 16 - Prob. 58PCh. 16 - Prob. 59PCh. 16 - Prob. 60PCh. 16 - Direct Materials Information about direct...Ch. 16 - Prob. 62PCh. 16 - Prob. 63PCh. 16 - Prob. 64PCh. 16 - Overhead Cost and Variance Relationships...Ch. 16 - Prob. 66PCh. 16 - Prob. 67PCh. 16 - Ethics and Standard Costs Farmer Franks produces...Ch. 16 - Comprehensive Variance Problem The standard cost...Ch. 16 - Prob. 70PCh. 16 - Find Actual and Budget Amounts from Variances JW...Ch. 16 - Variance Computations with Missing Data The...Ch. 16 - Comprehensive Variance Problem Sweetwater Company...Ch. 16 - Prob. 74PCh. 16 - Prob. 75PCh. 16 - Keewee Company manufactures a single product for...
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- Which of the following is a possible cause of an unfavorable labor rate variance? A. hiring too many workers B. hiring higher-quality workers at a higher wage C. making too many units D. purchasing too much materialarrow_forward3. Some people suggest that the direct labor rate variance is never controllable. Do you agree or disagree? Give reasons to sSupport your answer.arrow_forward(1) What is a direct labor variance and how is it calculated? (2) What factors might possibly lead to an unfavorable direct labor variance? (3) Briefly explain why firms might use nonfinancial performance measures.arrow_forward
- please guve the the accurate answers only please What is the labor efficiency variance? answer: ??????? since it is unfavorable What is the variable overhead efficiency variance? answer: ?????????? since its unfavorable What is the variable overhead rate variance? answer:??????????? since it is unfavorablearrow_forwardIf the organization operates at an activity level outside the relevant range, any cost predictions based on data from the relevant range may not be very accurate. True or False?arrow_forward2. Which of the following statements is false? (You may select more than one answer.)a. The planning horizon for discretionary fixed costs is longer than the planninghorizon for committed fixed costs.b. Discretionary fixed costs can be cut in the short term if necessary, while committed fixed costs cannot be cut for short periods of time.c. As companies increasingly rely on knowledge workers, the labor cost associated withemploying these workers is often committed fixed as opposed to discretionary.d. A mixed cost contains both committed fixed and discretionary elements.arrow_forward
- When is the labor rate variance favorable? A. when the actual quantity used is greater than the standard quantity B. when the actual quantity used is less than the standard quantity C. when the actual price paid is greater than the standard price D. when the actual price is less than the standard pricearrow_forward“The production-volume variance should always be written off to Cost of Goods Sold.” Do you agree? Explain.arrow_forwardHow does persistent favorable variances in an employees cost performance create a management challenge? Wouldn't we want all our employees creating favorable variances?arrow_forward
- Beyond meaning good or bad for business, can you please explain the mechanics of favorable and unfavorable in terms of variance?arrow_forwardIs this statement true or false? Can you please explain in detail. There is a difference between the theoretical production capacity and the actual output as demand fluctuates, resulting in differences in standardised cost price per unitarrow_forwardWhat are some possible reasons for a labor rate variance? A. hiring of less qualified workers B. an excess of material usage C. material price increase D. utilities usage changearrow_forward
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