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 71P
Find Actual and Budget Amounts from Variances
J&W Corporation manufactures a new electronic game console. The current
Assume that the following data appeared in J&W’s records at the end of the past month:
There are no materials inventories.
Required
- a. Prepare a
variance analysis for direct materials and direct labor and complete the standard cost sheet. - b. Assume that all production
overhead is fixed and that the $18,000 under-applied is the only overhead variance that can be computed. What are the actual and applied overhead amounts?
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Required A Required B
What was budgeted production for the month?
Budgeted production
units
Krueger Corporation in Washington, D.C., U.S., recently implemented a standard
cost system. The company's cost accountant has gathered the following information
needed to perform a variance analysis at the end of the month:
Standard Cost Information
Direct materials....
Quantity allowed per unit .
Direct labor rate ....
Hours allowed per unit..
Fixed overhead budgeted
Normal level of production
Variable overhead application rate
Fixed overhead application rate ($12,000 _ 1,200 units) . .. 10.00 per unit
Total overhead application rate..
$5 per pound
.100 pounds per unit
$20.00 per hour
2 hours per unit
$12,000 per month
. 1,200 units
$ 2.00 per unit
$12.00 per unit
Actual Cost Information
Cost of materials purchased and used ....
Pounds of materials purchased and used.
Cost of direct labor....
$468,000
.104,000 pounds
$46,480
2,240 hours
Hours of direct labor .
anr$2,352
.$12,850
.1,000 units
Cost of variable overhead .
Cost of fixed overhead .
Volume of production .
Instructions
1.…
Kenya Company’s standard cost accounting system recorded this information from its June operations. Required 1. Prepare journal entries dated June 30 to record the company’s costs and variances for the month. (Do not prepare the journal entry to close the variances.) Analysis Component 2. Identify the variances that would attract the attention of a manager who uses management by exception. Describe what action(s) the manager should consider. Standard direct materials cost $130,000 Direct materials quantity variance (favorable) . 5,000 Direct materials price variance (favorable) 1,500 Actual direct labor cost 65,000 Direct labor efficiency variance (favorable) . 3,000 Direct labor rate variance (unfavorable) 500 Actual overhead cost . 250,000 Volume variance (unfavorable) . 12,000 Controllable variance (unfavorable) . 8,000
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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What is variance analysis?; Author: Corporate finance institute;https://www.youtube.com/watch?v=SMTa1lZu7Qw;License: Standard YouTube License, CC-BY