ACC 410 Chapter 11: ACC410 CHAPTER 11 – VARIANCES JOURNAL ENTRIES
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The? Sudbury, South? Carolina, plant of Shannon Sports Companyhas the following standards for its soccer ball? production:
Standards: | 0.1 yard |
Material (leather) per soccer ball | $21 |
Material price per yard | 0.40 Hour |
Direct labor hours per soccer ball | $11 per hour |
Wage rate per direct labor hour | $12 per direct labor hour |
Variable support cost rate | |
Actual results for October: | |
Used 13500 yards of raw material, purchased for $280,530.00. Paid for 8,200 direct labor hours at $11.30 per hour. Incurred $82,000 of variable support costs Manufactured 25,000 soccer balls |
Requirements
Determine the following variances for? October:
?(a) | Total direct material cost variance and indicate whether thevariance is favorable or unfavorable |
?(b) | Total direct labor cost variance |
?(c) | Total variable support cost variance |
?(d) | Direct material price variance |
?(e) | Direct material quantity variance |
?(f) | Direct labor rate variance |
?(g) | Direct labor efficiency variance |
?(h) | Variable support rate variance |
?(i) | Variable support efficiency variance |
AH? = Actual number of direct labor hours
AP? = Actual price per unit of materials
AQ? = Actual quantity of materials used
AR? = Actual wage rate
SH? = Number of direct labor hours allowed given the level ofoutput achieved
SP? = Estimated or standard price per unit of materials
SQ? = Standard quantity of materials allowed for the productionlevel achieved
SR? = Standard wage rate
Ironwood Company manufactures cast-iron barbeque cookware. During a recent windstorm, it lost some of its cost accounting records. Ironwood has managed to reconstruct portions of its standard price (rate) system database but is still missing a few pieces of information.
Required:
Use the information in the table to determine the unknown amounts. You may assume that Ironwood does not keep any raw materials on hand. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable)
Direct Material | Direct Labor | |
---|---|---|
Standard amount per pan produced | 2.5 pounds | 1.10/hour |
Standard Price(rate) | $4.20 per pound | $16 per hour |
Actual amount used per pan produced | 2.4 pounds | 1.20/hour |
Actual Price(rate) | 4.10 per pound | 15.50 per hour |
Actual number of pans produced and sold | 2,500 pans | 2,500 pans |
Direct Materials price variance | x | |
Direct Materials quantity variance | x | |
Direct Materials spending variance | x | |
Direct labor rate variance | x | |
Direct Labor quantity variance | x | |
Direct Labor spending variance | x |