Direct material price variance

Acct Quiz week 7 1. Which of the following might cause a materials variance? Failing to take purchase discounts. Using a better grade of raw material. Changes in the market supply for the raw materials. All of the above. 2. What is the term that describes the rate companies frequently use to apply fixed overhead costs to units produced? Predetermined overhead rate. 3. Activity-based costing is commonly used with standard costing. Using more activity drivers increases the potential

work 780 direct labour-hours each month and produce 2600 robes. The standard costs associated with this level of production are as follows: |      | Total | Per Unit of Product |   Direct materials | $ | 53248   | $ 20.48    |   Direct labour | $ | 8320   | 3.20    |   Variable manufacturing overhead   (based on direct labour-hours) | $ | 3120   | 1.20    |   |   |   | |   |   |   | $ 24.88    |   |   |   | | |        During April, the factory worked only 760 direct labour-hours

3.0 Variance Analysis 3.1 Flexible-Budget Variance Analysis In Barnes Scuba Diving case, the main comparison for the flexible-budget variance analysis would be between the actual results and flexible budget. Static budget would not be useful for this comparison due to the different sales unit output which may result in a misleading and inaccurate result comparison. With reference to the Flexible Budget Section attached in Annex X, Flexible-Budget Variance for Revenues was identified to be a favourable

performance. On a per-unit basis both cardboard and paper were acquired at cheaper-than-budgeted rates but the trade-off for this was a large ending inventory of both products. This resulted in a dramatic increase in total costs incurred for these direct materials because of the large purchasing quantities. Whether this cost can be somewhat absorbed in financial year 2013-14 by using leftover product instead of purchasing more was not stated, however the sprinkler incident suggests that

From: Candidate Subject: New Look Jackets Variance Analyses and Draft Operating Budget Introduction The following report explains the significance and reasons for the variances in New Look Jacket's 2012 detailed variance report and provides a draft operating budget for 2013. Analysis of Variances The sales price variance is zero, meaning the average price New Look Jackets sold products was the same as the budgeted sales price. The sales mix variance is unfavourable for Nylon Jackets and favourable

Managerial Accounting Case ‘Waltham Motors Division’ Answer 1: Breakeven point If Waltham Motors Division sells 13,326 units, it will breakeven. But why Waltham incurred net losses when it sold more than 13,326 units in May? The unfavorable cost variances (see answer 2 and 3) and Waltham’s high operating leverage were major reasons for its financial problems. Waltham’s operating leverage is 3.85 times, which indicates that the operating income is very sensitive to changes in sales. Answer 2: Total

ACC3320 Accounting for Decision Making Final Exam 1. Riggs Enterprise's flexible budget cost formula for indirect materials, a variable cost, is $0.45 per unit of output. If the company's performance report for last month shows a $90 favorable variance for indirect materials and if 8,700 units of output were produced last month, then the actual costs incurred for indirect materials for the month must have been:  A. $4,005 B. $3,915 C. $3,825 D. $3,735   2. Chmielewski Medical Clinic measures

the budgets listed in Column A: 1. Budgeted income statement a. Direct materials budget 2. Budgeted balance sheet b. Cost of goods sold budget 3. Cash flow budget c. Production budget 4. Cost of goods sold budget d. Payables budget 5. Production budget e. Sales budget 6. f. Budgeted income statement 1. Budgeted income statement – e. Sales budget 2. Budgeted balance sheet – d. Payables budget 3. Cash flow budget – a. Direct materials budget 4. Cost of goods sold budget – b. Cost

production, manufacturing (raw materials, direct labor, and factory overhead), selling, and general and administrative operations. After actual activity was recorded and compared to the operating budget for Peyton Approved, variances were found that caused unfavorable results in the company’s total direct labor and total direct materials accounts. These variances need to be analyzed and investigated so corrective actions can be taken. A thorough review of the budget variance report indicates a few

entry doors: the Hollow Core and the Solid Door models. The Company has used direct labor dollars to allocate the overhead cost of $47,450,000. The company’s CFO, Brian Smythe, has offered the following information regarding the two products: | Hollow Core | Solid Door | Sales in units | 400,000 | 50,000 | | | | Sales price per unit | $475.00 | $650.00 | Direct materials per unit | 55.00 | 130.00 | Direct labor cost per unit | 75.00 | 50.00 | | | | The company has hired you