Financial And Managerial Accounting
15th Edition
ISBN: 9781337902663
Author: WARREN, Carl S.
Publisher: Cengage Learning,
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Chapter 23, Problem 4MAD
Direct labor time variance
Maywood City Police uses
The police are paid $25 per hour.
The actual amount of hours per activity for the year were as follows:
- A. Determine the total budgeted cost to perform the three police activities.
- B. Determine the total actual cost to perform the three police activities.
- C. Determine the direct labor time variance.
- D. What does the time variance suggest?
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Rammazzotti, Inc., is looking for feedback on company performance. The company compares the budget for the year with the actual costs.Rammazzotti, Inc., had the following budgeted data:
Unit sales for the year
26,000
Unit production for the year
26,000
Budgeted fixed overhead for the year:
Supervision
$ 800
Depreciation
2,000
Rent
100
Budgeted variable costs per unit:
Direct materials
$0.15
Direct labor
0.20
Supplies
0.02
Indirect labor
0.05
Power
0.02
The following actually occurred:
Actual unit sales for the year
24,000
Actual unit production for the year
28,000
Actual fixed overhead for the year:
Supervision
$ 850
Depreciation
2,000
Rent
100
Actual variable costs:
Direct materials
$3,500
Direct labor
4,900
Supplies
530
Indirect labor
1,250
Power
470
The total budgeted costs for the year were
a.$14,340.
b.$11,440.
c.$13,510.
d.$13,460.
Pease Contractors is a local home remodeling company. In analyzing financial performance, the accountant compares actual results with a flexible budget. The standard direct labor rates used in the flexible budget are established each year at the time the annual plan is formulated and held constant for the entire year.
The standard direct labor rates in effect for the current fiscal year and the standard hours allowed for the actual output of work for August are shown in the following schedule.
Worker Classification
Standard Direct Labor Rate per Hour
Standard Direct Labor-Hours Allowed for Output
Supervisor
$ 50
1,800
Skilled
30
2,250
General
20
4,950
The actual direct labor-hours worked and the actual direct labor rates per hour experienced for the month of August were as follows.
Worker Classification
Actual Direct Labor Rate per Hour
Actual Direct Labor-Hours
Supervisor
$ 54
2,112
Skilled
32
2,112
General
18
5,376
Required:
Calculate the dollar…
Varriano Corporation bases its budgets on the activity measure customers served. During October, the company planned to serve
46,000 customers, but actually served 47,000 customers. The company has provided the following data concerning the formulas it
uses in its budgeting:
Revenue
Wages and salaries
Supplies
Insurance
Miscellaneous expense
Customers served
Revenue
Expenses:
Wages and salaries
Supplies
Insurance
Miscellaneous expense
Total expense
Net operating income
Required:
Prepare a report showing the company's activity variances for October. Indicate in each case whether the variance is favorable (F) or
unfavorable (U). (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect
(i.e., zero variance). Input all amounts as positive values.)
Fixed element
per month
Flexible
Budget
$ 38,000
$0
$ 8,500
$ 8,000
Varriano Corporation
Activity Variances
For the Month Ended October 31
47,000
Planning
Budget
Variable
element per…
Chapter 23 Solutions
Financial And Managerial Accounting
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What is variance analysis?; Author: Corporate finance institute;https://www.youtube.com/watch?v=SMTa1lZu7Qw;License: Standard YouTube License, CC-BY