general business data bank
161. Miller has the following information pertaining to its usage of direct labor in a recent period:
Required: Given the above, determine the company's:
(A) Direct labor efficiency variance for the period.
(B) Direct labor rate variance for the period.
(C) Summary journal entry to record accrued labor costs and associated standard cost variances for the period.
162.Sarheen, Inc. maintains no inventories and has collected the following data on one of its products for the most recent period:
Required: Determine:
(A) The direct material usage (quantity) variance.
(B) The actual cost of the direct materials purchased and used during the period. (Hint: these two amounts are identical.)
(C) The direct material price variance.
(D) The correct summary journal entry to record direct material costs for this period's production, including associated standard cost variances. (Note: assume that any price variances are recorded at point of production.)
163. McElroy Company has prepared the following master budget for 2010. Although McElroy has the capacity to manufacture 50,000 units, management expected the likely demand for its product to be 40,000 units in 2010; as such, it prepared the master budget to manufacture and sell 40,000 units. In early January 2011, the company was pleasantly surprised to find out that it manufactured and sold 45,000 units in 2010.
Required: Prepare the flexible budget (FB) for the actual operating level achieved in 2010.
164. Balt Company maintains a standard cost system; as such, all inventories, including materials, are carried on the books at standard cost. Last period, Balt used 5,000 pounds of Material H to produce 800 units of Product C8. The company has established a standard of 7 pounds of Material H per unit of C8, at a price of $7.50 per pound of material. During the period the inventory for Material H decreased by 2,000 pounds. The company spent $25,000 during the period to purchase material H.
Required: (1) Calculate the direct materials purchase-price variance for the period. (2) Calculate the direct materials usage variance forthe period. (3) Provide the correct summary journal entry to record the purchase, on credit, of materials during the period.(4) Provide the correct summary journal to record direct materials cost for materials issued to production during the period.
165. Falcon Company uses a standard cost system; as such, all inventories are carried on the books at standard cost. During the most recent period the company manufactured 12,000 units. The standard cost sheet indicates that the standard direct labor cost per unit is $1.50. The performance report for the period includes an unfavorable direct labor rate variance of $1,000 and a favorable direct labor efficiency variance of $275.
Required: What was the total actual cost of direct labor incurred during the period?
166.
Balmer Corporation's master budget for the year is presented below:
During the period, the company actually manufactured and sold 42,000 units.
Required:
(1) Prepare a flexible budget (FB) for the actual output level achieved during the period.
(2) What is the definition of a FB? For what managerial purpose is a FB useful? Be specific about the types of information (and variances) that management can generate, at the end of an accounting period, given a flexible budget and its master (static) budget.
167. Patterson, Inc. wishes to evaluate, in summary fashion, its financial performance for the most recent period. The budget and the actual operating results for this period are presented below.
Required: (A) What was the actual operating income for the period?
(B) What is the firm's master budget operating income?
(C) What was the flexible-budget operating income for the period?
(D) What is the total operating-income variance of the period?
(E) What was the sales-volume variance, in terms of operating income, for the period?
(F) What are the key elements of the traditional financial control model?
(G) What are the primary limitations of the traditional financial control model?
168. Contemporary furniture manufactures office desks. The firm budgeted to sell 5,000 desks at $200 per desk in 2010. Budgeted costs include $80 variable cost per desk, and $200,000 fixed cost/year. In 2010 the company sold 6,000 desks at $190, and incurred $78 variable cost per desk and $220,000 fixed cost for the year.
Required: Prepare, in proper form, a variance analysis report identifying both flexible budget and sales-volume variances.
169.
Fill in the unknowns A through S below.
170.
James has the following information pertaining to its usage of direct labor in a recent period:
Required: (A) Calculate the labor efficiency variance for the period.
(B) Calculate the labor rate variance for the period.
(C) Prepare, in proper form, the journal entry to record wage expense for the period, including any associated standard cost variances.
171. Appliance, Inc. manufactured 10,000 units. The standard cost sheet indicates that the standard direct labor cost per unit is $3.00. The performance report for the period includes a favorable direct labor rate variance of $2,000, and a favorable direct labor efficiency variance of $500.
Required: What was the total actual cost of direct labor incurred during the period?
172. The Chen Company uses a standard cost system. As such, all of its inventories are carried on the books at standard, not actual, cost. During the most recent accounting period, the company had the following summary transactions:
(A) Purchased, on credit, direct materials; the standard cost of these materials was $30,000, while the actual cost was $32,000.
(B) Issued to production direct materials. The standard cost of materials that should have been used for this period's output was $35,000, while the standard cost of materials actually used in production during the period was $33,000.
(C) Actual direct labor cost, which has been incurred but not yet paid, for the period was $75,000. The standard direct labor cost for this period's output was $80,000. The direct labor efficiency variance for the period was $10,000(F).
(D) For the units completed during the period, the standard direct labor cost was $78,000, while the standard direct materials cost was
$34,000.
(E) For the units sold during the period, the standard materials cost was $30,000, while the standard direct labor cost was $76,000 Required: Given the above information, provide the correct journal entries for the following:
(A) Purchase of direct materials
(B) Issuance of materials to production.
(C) Direct labor cost for the period.
(D) The labor and materials cost associated with finished production this period.
(E) The labor and materials cost associated with items sold during the period.
173. Define what is meant by the term "just in time production" (JIT). As indicated in your text, management accountants can supply relevant information to management as it considers a move to JIT. In this regard, describe some of the principal advantages of using a JIT system, and then describe some of the incremental costs that would likely be associated with a move to such a system.
174. Chapter 14 argues that a comprehensive management accounting and control system would include nonfinancial as well as financial performance indicators. Two such nonfinancial performance indicators were discussed in conjunction with organizations that adopt a just-in-time (JIT) production philosophy: customer-response time (CRT) and process cycle efficiency (PCE). Explain each of these two performance indicators.
175. Explain the calculation and interpretation of a sales price variance for any given period. How does this variance relate to the total flexible-budget variance for the period?
176.Subscript "a" = actual; subscript "s" = standard; Q = quantity of direct materials issued to production; P = price paid for unit of direct materials.
Required: Use the above notation to develop a formula for each of the following standard cost variances: (A) Direct materials pricevariance (calculated at point of production, not point of purchase).
(B) Direct materials usage variance.
(C) Flexible-budget (FB) variance for direct materials.
(D) Joint price-quantity variance for direct materials.
Chapter 14 introduces you to the concept of operational control systems. Within the context of this discussion, certain limitations of financial control systems were presented. Provide a summary of the primary limitations of short-term financial performance indicators, such as the variances discussed in the main part of the chapter-
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Solution: accounts data bank