Principles of Accounting Volume 2
19th Edition
ISBN: 9781947172609
Author: OpenStax
Publisher: OpenStax College
expand_more
expand_more
format_list_bulleted
Concept explainers
Textbook Question
Chapter 8, Problem 11EA
A manufacturer planned to use $78 of variable
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
SouthCo planned to use $35 of variable overhead per unit produced, but in the most recent period, it actually used $33 of variable overhead per unit produced. During this same period, the company planned to
produce 100 units in 120 hours but actually produced 100 units in 150 hours.
Calculate the variable overhead rate variance, the variable overhead efficiency variance, and the total variable overhead cost variance and complete the diagram. Please make sure your final answer(s) are
accurate to the nearest whole number.
Box 1
Box 2
Box 3
(Select one) x (Select one)
(Select one) x (Select one)
(Select one) x (Select one)
Box 4
Variable Overhead
Rate Variance
(Select one)
Box 6
Total Variable Overhead
Cost Variance
(Select one)
Box 5
Variable Overhead
Efficiency Variance
(Select one)
A manufacturer planned to use $80 of variable overhead per unit produced, but in the most recent period, it actually used $77 of variable overhead per unit produced. During this same period, the company planned to produce 600 units but actually produced 630 units.
What is the variable overhead spending variance? Enter the amount as positive number.
Variable overhead spending variance
$fill in the blank 1
Thorne Company has the following information available for the past year. They use machine hours to allocate overhead.
NOTE: All dollar amounts are rounded to whole dollars and shown with "$" and commas as needed (i.e. $12,345). For the variance conditions, your answer is either "F” (for Favorable) or "U” (for Unfavorable) - capital letter and no quotes.
What is the variable overhead efficiency variance?
Is it favorable or unfavorable?
Chapter 8 Solutions
Principles of Accounting Volume 2
Ch. 8 - Why does a company use a standard costing system?...Ch. 8 - This standard is set at a level that may be...Ch. 8 - This standard is set at a level that could be...Ch. 8 - This variance is the difference involving spending...Ch. 8 - This variance is the difference involving spending...Ch. 8 - What are some possible reasons for a material...Ch. 8 - When is the material price variance unfavorable?...Ch. 8 - When is the material price variance favorable? A....Ch. 8 - What are some reasons for a material quantity...Ch. 8 - When is the material quantity variance favorable?...
Ch. 8 - When is the material quantity unfavorable? A. when...Ch. 8 - What are some possible reasons for a labor rate...Ch. 8 - When is the labor rate variance unfavorable? A....Ch. 8 - When is the labor rate variance favorable? A. when...Ch. 8 - What are some possible reasons for a direct labor...Ch. 8 - When is the direct labor time variance favorable?...Ch. 8 - When is the direct labor time variance...Ch. 8 - A flexible budget______. A. predicts estimated...Ch. 8 - The variable overhead rate variance is caused by...Ch. 8 - The variable overhead efficiency variance is...Ch. 8 - The fixed factory overhead variance is caused by...Ch. 8 - Which of the following is a possible cause of an...Ch. 8 - Which of the following is a possible cause of an...Ch. 8 - Which of the following is a possible cause of an...Ch. 8 - Which of the following is a possible cause of an...Ch. 8 - What two components are needed to determine a...Ch. 8 - What two components are needed to determine a...Ch. 8 - What elements require consideration before...Ch. 8 - What is a variance?Ch. 8 - What causes the material price variance?Ch. 8 - What causes the material quantity variance?Ch. 8 - What are some possible causes of a material price...Ch. 8 - What are some possible causes of a material...Ch. 8 - What is the direct labor rate variance?Ch. 8 - What is the direct labor time variance?Ch. 8 - What are some possible causes of a direct labor...Ch. 8 - What are some possible causes of a direct labor...Ch. 8 - How is the total direct labor variance calculated?Ch. 8 - What causes the variable overhead rate variance?Ch. 8 - What causes the variable overhead efficiency...Ch. 8 - What is the main difference between a flexible...Ch. 8 - What causes a favorable variance?Ch. 8 - What causes an unfavorable variance?Ch. 8 - When might a favorable variance not be a good...Ch. 8 - When might an unfavorable variance be a good...Ch. 8 - Identify several causes of a favorable material...Ch. 8 - Identify several causes of an unfavorable material...Ch. 8 - Identify several causes of a favorable material...Ch. 8 - Identify several causes of an unfavorable material...Ch. 8 - Identify several causes of a favorable labor rate...Ch. 8 - Identity several causes of an unfavorable labor...Ch. 8 - Identify several causes of a favorable labor...Ch. 8 - Identify several causes of an unfavorable labor...Ch. 8 - Moisha is developing material standards for her...Ch. 8 - Rene is working with the operations manager to...Ch. 8 - Fiona cleans offices. She is allowed 5 seconds per...Ch. 8 - Use the information provided to create a standard...Ch. 8 - Sitka Industries uses a cost system that carries...Ch. 8 - Use the information provided to answer the...Ch. 8 - Dog Bone Bakery, which bakes dog treats, makes a...Ch. 8 - Queen Industries uses a standard costing system in...Ch. 8 - Penny Company manufactures only one product and...Ch. 8 - ThingOne Company has the following information...Ch. 8 - A manufacturer planned to use $78 of variable...Ch. 8 - Acme Inc. has the following information available:...Ch. 8 - Acme Inc. has the following information available:...Ch. 8 - Acme Inc. has the following information available:...Ch. 8 - Bristol is developing material standards for her...Ch. 8 - Salley is developing material and labor standards...Ch. 8 - Use the following information to create a standard...Ch. 8 - Mateo makes gizmos. He would like to set up a...Ch. 8 - Smith Industries uses a cost system that carries...Ch. 8 - Lizbeth, Inc., makes ice cream. The toffee coffee...Ch. 8 - Woodpecker manufactures sawmill equipment. They...Ch. 8 - Case made 24,500 units during June, using 32,000...Ch. 8 - Eagle Inc. uses a standard cost system. During the...Ch. 8 - A manufacturer planned to use $45 of variable...Ch. 8 - Fitzgerald Company manufactures sewing machines,...Ch. 8 - Acme Inc. has the following information available:...Ch. 8 - Acme Inc. has the following information available:...Ch. 8 - Acme Inc. has the following information available:...Ch. 8 - The comptroller wants to set the standards...Ch. 8 - Stan is opening a coffee shop next to Big State...Ch. 8 - What makes a variance favorable? Give an example...Ch. 8 - April Industries employs a standard costing system...Ch. 8 - Ed Co. manufactures two types of O rings, large...Ch. 8 - The Whizbang Company makes a special type of toy....Ch. 8 - Ellis Companys labor information for September is...Ch. 8 - Breakaway Companys labor information for May is as...Ch. 8 - Power Co.s labor information for June is as...Ch. 8 - Prepare a flexible budget for overhead based on...Ch. 8 - Reddy Corporation has collected the following data...Ch. 8 - ABC Inc. spent a total of $48,000 on factory...Ch. 8 - Recompute the variances from the second Acme Inc....Ch. 8 - Sameerah is trying to determine the standard hours...Ch. 8 - Carl cleans offices. He has the following...Ch. 8 - Freidrich is working with the operations manager...Ch. 8 - A company bought 45,000 pounds of plastic pellets...Ch. 8 - Illinois Company is a medium-sized company that...Ch. 8 - Corolla Manufacturing has a standard cost for...Ch. 8 - Marymount Company makes one product. In the month...Ch. 8 - Adam Inc.s records for May include the following...Ch. 8 - Ribcos labor cost information for making its only...Ch. 8 - Use the following standard cost card for 1 gallon...Ch. 8 - Use the following standard cost card for 1 gallon...Ch. 8 - How do you balance a firms need to succeed and the...Ch. 8 - What type of firm would use standard costing? What...Ch. 8 - Is labor a true variable cost?Ch. 8 - Why would managers use a flexible budget? What...Ch. 8 - Fill in the blanks in the following flexible...Ch. 8 - Before automation became more prevalent, overhead...Ch. 8 - In your opinion, is it important that an...
Additional Business Textbook Solutions
Find more solutions based on key concepts
E6-14 Using accounting vocabulary
Learning Objective 1, 2
Match the accounting terms with the corresponding d...
Horngren's Accounting (11th Edition)
Asset Retirement Obligation. On January 1, Evergreen Utilities Company acquired a power plant at a total cost o...
Intermediate Accounting
What is the biggest advantage of using RI to evaluate investment centers?
Horngren's Financial & Managerial Accounting, The Managerial Chapters (6th Edition)
Trend percentages and return on assets (Learning Objective 2) 20-25 min. Net sales, net income, and total asset...
Financial Accounting, Student Value Edition (5th Edition)
Calculate retained earnings balance. (LO 5). Suppose Hillard Company started the year with a balance of $450,00...
Financial Accounting
Quick ratio and current ratio (Learning Objective 7) 1520 min. Consider the following data: COMPANY A B C D Cas...
Financial Accounting, Student Value Edition (4th Edition)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Reddy Corporation has collected the following data for the month or June: What is the variable overhead efficiency variance?arrow_forwardThingOne Company has the following information available for the past year. They use machine hours to allocate overhead. What is the variable overhead efficiency variance?arrow_forwardJeffries Company’s only variable-overhead cost is electricity. Does an unfavorable variable-overhead spending variance imply that the company paid more than the anticipated rate per kilowatt-hour?arrow_forward
- 6. A manufacturer planned to use $78 of variable overhead per unit produced, but in the most recent period, it actually used $76 of variable overhead per unit produced. During this same period, the company planned to produce 500 units but actually produced 540 units. NOTE: All dollar amounts are rounded to whole dollars and shown with "$" and commas as needed (i.e. $12,345). For the variance conditions, your answer is either "F” (for Favorable) or "U” (for Unfavorable) - capital letter and no quotes. What is the variable overhead spending variance? Is it favorable or unfavorable?arrow_forwardFeagin Company’s actual variable overhead was $73,000. Actual direct labor hours were 25,000 to make 20,000 finished products. The per-unit standard for direct labor hour is 1.5 hours, and the pre-determined variable overhead rate is $3 per direct labor hour. What were (1) the variable overhead spending variance (2) the variable overhead efficiency variance?arrow_forwardAcme Inc. has the following information available: Actual price paid for material $0.900 Standard price for material $0.625 Actual quantity purchased and used in production 90 Standard quantity for units produced 60 Actual labor rate per hour $16 Standard labor rate per hour $14 Actual hours 210 Standard hours for units produced 220 Compute the material price and quantity, and the labor rate and efficiency variances. Round your answers to two decimal places. Enter all amounts as positive numbers. Material price variance $fill in the blank 1 Material quantity variance $fill in the blank 3 Labor rate variance $fill in the blank 5 Labor efficiency variance $fill in the blank 7arrow_forward
- Beverly Company has determined a standard variable overhead rate of $3.40 per direct labor hour and expects to incur 0.50 labor hour per unit produced. Last month, Beverly incurred 1,400 actual direct labor hours in the production of 2,900 units. The company has also determined that its actual variable overhead rate is $2.40 per direct labor hour. Calculate the variable overhead rate and efficiency variances as well as the total amount of over- or underapplied variable overhead. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). variable overhead rate variance variable overhead efficiency variance over-or underapplied variable overheadarrow_forwardYou Did It! (YDI) has the following standards for direct labor: o Estimated quantity 8,900 direct labor hours o Estimated unit variable $48 per hour o Estimated fixed costs $18,000 YDI actually used 8,300 direct labor hours during production at an average hourly wage rate of $49.20, and actually incurred total fixed costs of $17,600. Using this information, answer the following questions. Please circle to identify the variance as favorable or unfavorable. What is the direct labor volume variance? Favorable or unfavorable?arrow_forwardBeverly Company has determined a standard variable overhead rate of $4.00 per direct labor hour and expects to incur 0.50 labor hour per unit produced. Last month, Beverly incurred 1,700 actual direct labor hours in the production of 3,500 units. The company has also determined that its actual variable overhead rate is $2.40 per direct labor hour. Calculate the variable overhead rate and efficiency variances as well as the total amount of over- or underapplied variable overhead. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Variable Overhead Rate Variance $2,720 F Variable Overhead Efficiency Variance $200 F Over or under applied Variable Overhead??- how do I figure this out??arrow_forward
- Beverly Company has determined a standard variable overhead rate of $3.90 per direct labor hour and expects to incur 0.50 labor hours per unit produced. Last month, Beverly incurred 1,650 actual direct labor hours in the production of 3,400 units. The company has also determined that its actual variable overhead rate is $2.40 per direct labor hour. Required: Calculate the variable overhead rate and efficiency variances as well as the total amount of over- or underapplied variable overhead. Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Variable Overhead Rate Variance Variable Overhead Efficiency Variance Over- or Underapplied Variable Overheadarrow_forwardThe following data are available for Corp: Normal capacity is 50,000 units at 100,000 direct labor hours. Variable overhead rate is P 6 per unit and fixed overhead rate is P 8 per unit. Units produced totaled 38,000 units. Direct labor hours worked is 80,000 hours while the actual Fixed overhead totaled P 384,000 and actual variable overhead is P 250,000. Compute the variable spending variance.arrow_forwardBeverly Company has determined a standard variable overhead rate of $3.90 per direct labor hour and expects to incur 0.50 labor hour per unit produced. Last month, Beverly incurred 1,650 actual direct labor hours in the production of 3,400 units. The company has also determined that its actual variable overhead rate is $2.40 per direct labor hour. Calculate the variable overhead rate and effeciency variances as well as the total amount of over-or underapplied variable overhead. . Variable Overhead Rate Variance=2,475 Favorable Variable Overhead Effeciency Variance=195 Favorable Variable Overhead Cost Variance?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Principles of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax College
Principles of Accounting Volume 2
Accounting
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax College
What is variance analysis?; Author: Corporate finance institute;https://www.youtube.com/watch?v=SMTa1lZu7Qw;License: Standard YouTube License, CC-BY