/*! This file is auto-generated */ .wp-block-button__link{color:#fff;background-color:#32373c;border-radius:9999px;box-shadow:none;text-decoration:none;padding:calc(.667em + 2px) calc(1.333em + 2px);font-size:1.125em}.wp-block-file__button{background:#32373c;color:#fff;text-decoration:none} 11SE Understanding variance relations... [FREE SOLUTION] | 91影视

91影视

Log out

Learning Materials

Features

Discover

Chapter 23: 11SE (page 1308)

Understanding variance relationships

Complete the table below for the missing variances.

Total Flexible Budget Product Cost Variance

(a)

Total direct material variance

(b)

Total direct labor variance

(c)

Total Manufacturing Overhead Variance

(d)

Direct material cost variance

Direct material efficiency variance

Direct Labor Cost Variance

Direct Labor Efficiency Variance

Total Variable Overhead Variance

Total fixed overhead variance

\(310F

\)165U

\(160U

\)415F

(e)

(f)

Variable Overhead Cost Variance

Variable Overhead Efficiency Variance

Fixed Overhead Cost Variance

\(525U

\)575F

$50F

Short Answer

Expert verified

Total Flexible Budget Product Cost Variance

$500(F)

Total direct material variance

(b)

Total direct labor variance

(c)

Total Manufacturing Overhead Variance

(d)

$145 (F)

$255 (F)

$100(F)

Direct material cost variance

Direct material efficiency variance

Direct Labor Cost Variance

Direct Labor Efficiency Variance

Total Variable Overhead Variance

Total fixed overhead variance

$310F

$165U

$160U

$415F

$50 (F)

$50 (F)

Variable Overhead Cost Variance

Variable Overhead Efficiency Variance

Fixed Overhead Cost Variance

$525U

$575F

$50F

Step by step solution

01

Definition of Variance Analysis

The analysis used to determine the difference between the actual activity level and the standard activity level is known as variance analysis. It is carried out to control the business process.

02

Calculation of missing amounts

  1. Total product cost flexible budget variance:

Particular

Amount $

Total direct material variance

$145 (F)

Total direct labor variance

$255 (F)

Total manufacturing overhead variance

$100(F)

Total product cost flexible budget variance

$500 (F)

  1. Total direct material variance:

Particular

Amount $

Direct material cost variance

$310 (F)

Direct material efficiency variance

$165 (U)

Total direct material variance

$145 (F)

  1. Total direct labor variance:

Particular

Amount $

Direct labor cost variance

$160 (U)

Direct labor efficiency variance

$415 (F)

Total direct labor variance

$255 (F)

  1. Total manufacturing overhead variance:

Particular

Amount $

Total variable overhead variance

$50 (F)

Total fixed overhead variance

$50 (F)

Total manufacturing overhead variance

$100 (F)

  1. Total variable overhead variance:

Particular

Amount $

Variable overhead cost variance

$525 (U)

Add: Variable overhead efficiency variance

$575 (F)

Total variable overhead variance

$50 (F)

  1. Total fixed overhead variance: This variance will equal the fixed overhead cost variance. Therefore, it is $50 (F).

Unlock Step-by-Step Solutions & Ace Your Exams!

  • Full Textbook Solutions

    Get detailed explanations and key concepts

  • Unlimited Al creation

    Al flashcards, explanations, exams and more...

  • Ads-free access

    To over 500 millions flashcards

  • Money-back guarantee

    We refund you if you fail your exam.

Over 30 million students worldwide already upgrade their learning with 91影视!

One App. One Place for Learning.

All the tools & learning materials you need for study success - in one app.

Get started for free

Most popular questions from this chapter

Question:List the direct labor variances, and briefly describe each.

Murphy Company managers received the following incomplete performance report:

Units Actual Results Flexible Budget Variance Static Budget Flexible Budget Sales Volume Variance Sales Revenue Contribution Margin Fixed Expenses Operating Income 35,000 (a) (b) 5,000 F \( 29,000 \) 14,000 105,000 0 \( 219,000 \) 27,000 F 85,000 13,000 MURPHY COMPANY Flexible Budget Performance Report For the Year Ended July 31, 2018 134,000 14,000 35,000 \( 35,000 100,000 \) 219,000 84,000 135,000 (c) (d) (e) (f) (h) (g) (i) (j) (k) (l)

Complete the performance report. Identify the employee group that may deserve praise and the group that may be subject to criticism. Give your reasoning.

Journalizing materials entries

The following direct materials variance analysis was performed for Moore.

Requirements

1. Record Moore鈥檚 direct materials journal entries. Assume purchases were made on the account.

2. Explain what management will do with this variance information

Kellogg Company manufacturers and markets ready-to-eat cereal and convenience foods including Raisin Bran, Pop Tarts, Rice Krispies Treats, and Pringles. In addition to the raw materials used when producing its products, Kellogg Company also has significant labor costs associated with the products. As of January 2, 2016, Kellogg Company had approximately 33,577 employees. A shortage in the labor pool, regulatory measures, and other pressures could increase the company鈥檚 labor cost, having a negative impact on the company鈥檚 operating income.

Requirements

1. Suppose Kellogg Company noticed an increase in its actual direct labor costs compared to the budgeted amount. How could Kellogg Company investigate this?

2. What is the direct labor cost variance and how would a company calculate this variance?

3. What is the direct labor efficiency variance and how would a company calculate this variance?

4. Suppose that Kellogg Company found an unfavorable total direct labor variance that was due completely to the direct labor cost variance. What measures could Kellogg Company take to control this variance?

5. Suppose that Kellogg Company found an unfavorable total direct labor variance that was due completely to the direct labor efficiency variance. What measures could Kellogg Company take to control this variance?

List the eight product variances and the manager most likely responsible for each.
See all solutions

Recommended explanations on Business Studies Textbooks

Startups

Read Explanation

Managerial Economics

Read Explanation

Organizational Behavior

Read Explanation

Project Planning & Management

Read Explanation

Accounting

Read Explanation

Strategic Direction

Read Explanation
View all explanations

What do you think about this solution?

We value your feedback to improve our textbook solutions.

Study anywhere. Anytime. Across all devices.