As long as the total actual factory overhead cost is not significantly different from the total standard applied factory overhead cost for the period, there is no need to conduct further analyses of the factory overhead variances." Do you agree? Why, or why not?

As long as the total actual factory overhead cost is not significantly different from the total standard applied factory overhead cost for the period, there is no need to conduct further analyses of the factory overhead variances." Do you agree? Why, or why not?

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter9: Evaluating Variances From Standard Costs

Section: Chapter Questions

Problem 5DQ: A. What are the two variances between the actual cost and the standard cost for direct labor? B. Who...

See similar textbooks

Related questions

Q: When the quantity of materials purchased is not equal to the quantity of material used, most…

A: Standard costing means where standard is set for various cost element and actual cost is then…

Q: In gross profit analysis, if the cost variance is zero, such variance indicates that a.…

A: Gross profit analysis is used to find the reasons for difference between the Gross profit margin for…

Q: The management of Al Safa Production LLC requested you to identify from the following how direct…

A: Standard costing means where standard is set for various cost element and actual cost is then…

Q: In a manufacturing environment, like the GM truck plant in Flint, who has primary responsibility for…

A: Sales Volume Variance is the difference between actual units and budgeted units sold which is…

Q: If there is an unfavorable direct material usage variance due to the substandard quality of the raw…

A: Solution: If there is an unfavorable direct material usage variance due to the substandard quality…

Q: If raw materials are carried in the raw materials inventory at standard cost, then it is reasonable…

A: 1 Standard data is calculated by considering budgeted data and using actual data. 2…

Q: The fixed factory overhead variance is caused by the difference between which of the following?…

A: Standard costing is a method of costing which measure the performance by comparing actual cost with…

Q: Alex Company has a large underapplied overhead balance in the manufacturing overhead account. This…

A: Overhead Cost Overhead cost includes all the indirect expenses incurred by an organization for…

Q: Which of the following would produce a materials price variance? A. an excess quantity of materials…

A: Material price variance: It can be defined as the difference between the budgeted and actual cost of…

Q: a. Analyze the factory overhead variance of Golden Manufacturers Inc., based on the given data.

A: Factory Overhead means all indirect costs related to factory or production of goods. Factory…

Q: Why should a production-volume variance (PVV) that is material be prorated among work-in-process,…

A: Approximating the allocation of fixed costs based on actual output and actual costs so it is not…

Q: In 2020 standard cost variance analysis report presented by the controller of ABC Corporation, the…

A: Since you have asked multiple questions, we will solve the first question for you . If you want any…

Q: n 2020 standard cost variance analysis report presented by the controller of ABC Corporation, the…

A: solution concept Favorable labor efficiency variance Favorable labor efficiency…

Q: Where are variances ultimately charged in a standard costing system? Multiple Choice Cost of…

A: Standard costing is a type or form of costing system in which standard costs are compared with…

Q: What type of variances are computed for materials, labour, and factory overhead

A: material variance = standard cost - actual cost of materials. types 1.Material Price Variance: MPV =…

Q: Under the two-variance method for analyzing factory overhead, the difference between the actual…

A: The question is related to Standard Costing and is related to two Varaince method.

Q: ich of the following would least likely cause an unfavorable materials quantity(usage) variance? *…

A: Solution: Material quantity (usage) variance is the difference between actual quantity of materials…

Q: 28. If at the end of the fiscal year, the variances from standard are significant, the variances…

A: At the end of the financial year, any variances which are significant from the standard measures of…

Q: Instructions: Designate whether each of the following statements is true or false by circling the T…

A: 1. If actual costs are less than standard costs, the variance is favourable. Solution: True…

Q: What department is usually responsible for a direct labor rate variance? What department is usually…

Q: b. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost…

A: Actual Quantity (AQ)= 5,600 units Standard Quantity(SQ) = 5,700 units Actual Price(AP) = $ 5.50…

Q: A production volume variance will exists when: a. Production volume differs from the sales…

A: Production Variance is a static used by business measure the cost of production of goods against…

Q: If a company uses predetermined rate for absorption of manufacturing overhead, the volume variance…

A: If a company uses predetermined rate for absorption of manufacturing overhead, the volume variance…

Q: A change in the quality of materials purchased A new supplier contract Error in the accounting…

A: 1) Material price variance = Material price variance occurs when the actual price paid is more or…

Q: What is the variation in the use of materials at actual price and standard materials at standard…

A: "since you have posted more than one questions and not specified which should be solved so we are…

Q: The journal entry to record the direct materials quantity variance may be recorded A. Only when…

A: Variance is the difference between the budgeted value and the actual results. It helps in planning…

Q: a) For direct materials calculate the price and quantity variances for the year. b) For direct…

A: As the question has more than 3 sub-parts, the first 3 subparts are answered. If you want the answer…

Q: Which of the following is a possible cause of an unfavorable material quantity variance? A) paying…

A: Variance refers to a change between the expected value and the actual result. This term is usually…

Q: If a company uses predetermined rate for absorption of manufacturing overhead, the volume variance…

A: Introduction:- A predetermined overhead rate is an allocation rate , which is used to apply the…

Q: Brandt Gardner, the owner-manager of a small firm that manufactures feed processing equipment and…

A: Variance refers to the deviation in estimated and actual performance. Overheads refer to the cost…

Q: Please redo this problem and show me steps on how to get the following questions correct, its…

A: Direct labor variance is calculated to check the difference between actual labor cost & standard…

Q: One way of analyzing the fixed factory overhead variance is breaking it down into

A: Fixed factory overhead variance can be defined as the difference of the actual and standard fixed…

Q: . In 2020 standard cost variance analysis report presented by the controller of ABC Corporation, the…

A: Solution Note Dear student as per the Q&A guideline we are required to answer the first question…

Q: Which of the following statements are true? a. The standard price of materials should include…

A: Solution: a. True, standard price of materials should include delivery charges and any discount b.…

Q: Which of the following would produce a labor rate variance? A. Poor quality materials causing…

A: The correct option is B.

Q: Belle Manufacturing has an unfavorable direct labor rate variance. Which of the following would be…

A: Labor rate variance is the difference between actual and expected cost of labor. Unfavorable labor…

Q: follow up question is as follows: Is the $90 for the fixed factory overhead volume variance…

A: Fixed overhead volume variance is difference between recovered overhead and budgeted over head.…

Q: Which of the following variances is caused by a difference between the denominator activity in the…

A: Variance: Variance refers to the difference level in the actual cost incurred and standard cost. The…

Q: Miller Company has an unfavourable materials price variance. Which of the following would be the…

A: Introduction:- The following formula used to calculate as follows under:- Material price variance…

Question

"As long as the total actual factory overhead cost is not significantly different from the total standard applied factory overhead cost for the period, there is no need to conduct further analyses of the factory overhead variances." Do you agree? Why, or why not?

Definition Definition Total cost of procuring or producing a product or the cost that an individual or business owner undertakes for the manufacturing of goods.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Similar questions

Identify several causes of an unfavorable labor efficiency variance.
A. What are the two variances between the actual cost and the standard cost for direct labor? B. Who generally has control over the direct labor cost variances?
What are some possible causes of a direct labor time variance?
Use the information provided to answer the questions. All material purchased was used in production. A. What is the standard price paid for materials? B. What is the direct materials quantity variance? C. What is the total direct materials cost variance? D. If the direct materials price variance was unfavorable, what would be the standard price?
What distinction must be made when computing the materials price variance vs. the materials quantity variance that is not an issue with the direct labor or variable overhead variances? Be sure to state why we bother to differentiate?
If variable manufacturing overhead is applied to production on the basis of direct labor-hours and the direct labor efficiency variance is unfavorable, will the variable overhead efficiency variance be favorable or unfavorable, or could it be either? Explain.
Would a production manager be equally responsible for anunfavorable materials price variance and an unfavorablematerials quantity variance? Explain.
1. What are the three primary reasons of using a standard cost system? In a business that routinely manufactures the same products or performs the same services, why are standards helpful? 2. What are ideal standards? What are currently attainable standards? Explain which standard is usually adopted and why. 3. Some people suggest that the direct labor rate variance is never controllable. Do you agree or disagree? Give reasons to support your answer.
If variable manufacturing overhead is applied to production on the basis of direct labor-hours and the direct labor efficiency variance is unfavorable, will the variable overhead efficiency variance be favorable or unfavorable, or could it be either?
Why should a production-volume variance (PVV) that is material be prorated among work-in-process, finished goods, cost and cost of goods sold rather than writing it all off to cost of goods sold? a. If a PVV is always written off to cost of goods sold, then the assets on the balance sheet would be the same as actual costs. b. If a PVV is always written off to cost of goods sold, then the liabilities on the balance sheet would be overstated. c. If a PVV is always written off to cost of goods sold, then the balances in the inventory accounts on the balance sheet would be most accurate. d. If a PVV is always written off to cost of goods sold, a company could set its standard costs to either increase or decrease operating incomes.
How are overhead variances useful in nonmanufacturing settings? Can you think of an example?
(1) What is a direct labor variance and how is it calculated? (2) What factors might possibly lead to an unfavorable direct labor variance? (3) Briefly explain why firms might use nonfinancial performance measures.