All Related Questions of Budget Variance

Q: Primara Corporation has a standard cost system in which it applies overhead

Primara Corporation has a standard cost system in which it applies overhead to products based on the standard direct labor-hours allowed for the actual output of the period. Data concerning the most r...

Q: The standard cost card for the single product manufactured by Cutter,

The standard cost card for the single product manufactured by Cutter, Inc., is given below: Manufacturing overhead is applied to production on the basis of standard direct labor-hours. During the yea...

Q: Selected information relating to Yost Company’s operations for the most recent year

Selected information relating to Yost Company’s operations for the most recent year is given below: The company applies overhead cost to products on the basis of standard machine-ho...

Q: Golf World is a 1,000-room luxury resort with

Golf World is a 1,000-room luxury resort with swimming pools, tennis courts, three golf courses, and many other resort amenities. The head golf course superintendent, Sandy Green, is responsible for a...

Q: Panarude Airfreight is an international air freight hauler with more than 45

Panarude Airfreight is an international air freight hauler with more than 45 jet aircraft operating in the United States and the Pacific Rim. The firm is headquartered in Melbourne, Australia, and is...

Q: Why is it useful to decompose a flexible budget variance into a

Why is it useful to decompose a flexible budget variance into a rate (price) variance and an efficiency (quantity) variance?

Q: Spitzer Specialty Furniture manufactures furniture for specialty shops throughout the Southwest.

Spitzer Specialty Furniture manufactures furniture for specialty shops throughout the Southwest. With annual sales of $12 million, the company has four major product lines—bookcases,...

Q: Lexi Belcher picked up the monthly report that Irvin Santamaria left on

Lexi Belcher picked up the monthly report that Irvin Santamaria left on her desk. She smiled as her eyes went straight to the bottom line of the report and saw the favorable variance for operating inc...

Q: Pressure Reducers, Inc. produces and sells lumbar support cushions for

Pressure Reducers, Inc. produces and sells lumbar support cushions for office chairs using a special foam that molds to a person’s back. Since all products are made to order, the onl...

Q: Barnes Entertainment Corporation prepared a master budget for the month of November

Barnes Entertainment Corporation prepared a master budget for the month of November that was based on sales of 150,000 board games. The budgeted income statement for the period is as follows. During...

Q: Your next-door neighbor recently began a new job as assistant

Your next-door neighbor recently began a new job as assistant controller for Conundrum Corporation. As her first assignment, she prepared a performance report for March. She was scheduled to present t...

Q: Refer to the data in the preceding exercise. Use diagrams similar

Refer to the data in the preceding exercise. Use diagrams similar to those in Exhibits 11–6 and 11–8 to compute (1) the variable-overhead spending and efficiency va...

Q: You brought your work home one evening, and your nephew spilled

You brought your work home one evening, and your nephew spilled his chocolate m ilk shake on the variance report you were preparing. Fortunately, knowing that overhead was applied based on machine hou...

Q: Manitoba Paper Company packages paper for photocopiers. The company has developed

Manitoba Paper Company packages paper for photocopiers. The company has developed standard overhead rates based on a monthly practical capacity of 90,000 direct-labor hours as follows: Standard costs...

Q: For each of the following independent Cases A and B, fill

For each of the following independent Cases A and B, fill in the missing information. The company budgets and applies production-overhead costs on the basis of direct-labor hours. (U denotes unfavorab...

Q: Western A uto Parts Company manufactures replacement parts for automobile repair.

Western A uto Parts Company manufactures replacement parts for automobile repair. The company recently installed a flexible manufacturing system (FMS), which has significantly changed the production p...

Q: Albuquerque Wood Crafts, Inc., is a manufacturer of furniture for

Albuquerque Wood Crafts, Inc., is a manufacturer of furniture for specialty shops throughout the southwest and has an annual sales volume of $24 million. The company has four major product lines: book...

Q: Williamson, Inc., manufactures quality replacement parts for the auto industry

Williamson, Inc., manufactures quality replacement parts for the auto industry. The company uses a standard costing system and isolates variances as soon as possible. The purchasing manager is respons...

Q: For the stamping department of a manufacturing firm, the standard cost

For the stamping department of a manufacturing firm, the standard cost for direct labor is $12 per hour, and the production standard calls for 1,000 stampings per hour. During June, 168 hours were req...

Q: Coastal Industries has established direct labor performance standards for its maintenance and

Coastal Industries has established direct labor performance standards for its maintenance and repair shop. However, some of the labor records were destroyed during a recent fire. The actual hours work...

Q: The National Battery Company produces a wide variety of batteries for home

The National Battery Company produces a wide variety of batteries for home, automobile, and marine use. One example of its many products is the Road Guardian automobile battery. The standard cost for...

Q: The budget variance for variable production costs is broken down into quantity

The budget variance for variable production costs is broken down into quantity and price variances. Explain why the quantity variance is more useful for control purposes than the price variance.

Q: Primara Corporation has a standard cost system in which it applies overhead

Primara Corporation has a standard cost system in which it applies overhead to products based on the standard direct labor-hours allowed for the actual output of the period. Data concerning the most r...

Q: The standard cost card for the single product manufactured by Cutter,

The standard cost card for the single product manufactured by Cutter, Inc., is given below: Standard Cost Card—per Unit Direct materials, 3 yards at $6.00 per yard ....................

Q: Selected information relating to Yost Company’s operations for the most recent year

Selected information relating to Yost Company’s operations for the most recent year is given below: Activity: Denominator activity (machine-hours) ............ 45,000 Standard hours allowed per unit …...

Q: Each of the following statements is correct regarding overhead variances except:

Each of the following statements is correct regarding overhead variances except: a. Actual overhead greater than applied overhead is unfavorable. b. The efficiency overhead variance ignores the standa...

Q: Rob Kapito, the controller of Blackstar Paint Supply Company, has

Rob Kapito, the controller of Blackstar Paint Supply Company, has been exploring a variety of internal accounting systems. Rob hopes to get the input of Blackstar’s board of director...

Q: Kemp Tables, Inc. (KTI) makes picnic tables of

Kemp Tables, Inc. (KTI) makes picnic tables of 2 × 4 planks of treated pine. It sells the tables to large retail discount stores such as Walmart. After reviewing the following data genera...

Q: Forsyth Company manufactures one product, it does not maintain any beginning

Forsyth Company manufactures one product, it does not maintain any beginning or ending inventories, and its uses a standard cost system. During the year, the company produced and sold 10,000 units at...

Q: Swain Company manufactures one product, it does not maintain any beginning

Swain Company manufactures one product, it does not maintain any beginning or ending inventories, and its uses a standard cost system. The company’s beginning balance in Retained Ear...

Q: Suppose the static budget was for 2,500 units of output

Suppose the static budget was for 2,500 units of output. Actual output was 2,000 units. The variances are shown in the following report: Required: What are the rate, efficiency, and sales-volume var...

Q: A number of terms are listed below: /

A number of terms are listed below: Required: Select the terms from the above list to complete the following sentences. The question is whether or not the actual results met expectations, exceeded e...

Q: Connor Company’s budgeted prices for direct materials, direct manufacturing labour,

Connor Company’s budgeted prices for direct materials, direct manufacturing labour, and direct marketing (distribution) labour per attaché case are $40, $8, and $12, res...

Q: A large metropolitan health-care complex, General Hospital, has

A large metropolitan health-care complex, General Hospital, has had difficulty controlling its accounts receivable. Costs currently available from the information system are inaccurate and have led to...

Q: Jennifer Norton is the Registered Dietitian (R.D.) responsible

Jennifer Norton is the Registered Dietitian (R.D.) responsible for all dietary services at City Memorial Hospital. Her operation consists of two departments. The first, and largest, is patient feeding...

Q: Connor Company’s budgeted prices for direct materials, direct manufacturing labor,

Connor Company’s budgeted prices for direct materials, direct manufacturing labor, and direct marketing (distribution) labor per attaché case are $40, $8, and $12, respe...

Q: Mo Coughlin and Associates is a medium-sized company located near

Mo Coughlin and Associates is a medium-sized company located near a large metropolitan area in the Prairies. The company manufactures cabinets of mahogany, oak, and other fine woods for use in expensi...

Q: The loan department of Your Local Bank uses standard costs to determine

The loan department of Your Local Bank uses standard costs to determine the overhead cost of processing loan applications. During the current month, a fire occurred, and the accounting records for the...

Q: Tovar Company uses a standard cost accounting system. Some of the

Tovar Company uses a standard cost accounting system. Some of the ledger accounts have been destroyed in a fire. The controller asks for your help in reconstructing some missing entries and balances....

Q: Ranier Corporation manufactures a single product. The standard cost per unit

Ranier Corporation manufactures a single product. The standard cost per unit of the product is shown below: Calculate variances. Direct materials—1.5 kg of plastic at $8 per kilogram ………….. $12.00 Di...

Q: Finley Manufacturing Corporation accumulates the following data for jobs started and finished

Finley Manufacturing Corporation accumulates the following data for jobs started and finished during the month of June 2020: Calculate variances and prepare an income statement. Overhead is applied...

Q: Inman Corporation manufactures a single product. The standard cost per unit

Inman Corporation manufactures a single product. The standard cost per unit of product is as follows: Calculate variances. Direct materials—2 kg of plastic at $5 per kilogram ………………… $10.00 Direct la...

Q: Soriano Manufacturing Company uses a standard cost accounting system to account for

Soriano Manufacturing Company uses a standard cost accounting system to account for the manufacturing of exhaust fans. In July 2020, it accumulates the following data for 1,500 units started and finis...

Q: Montreal Inc. manufactures garden hoses for large stores. The

Montreal Inc. manufactures garden hoses for large stores. The standard costs for a dozen garden hoses are as follows: Calculate variances. Direct materials ……&...

Q: The photocopying department in the local polytechnic college has budgeted monthly costs

The photocopying department in the local polytechnic college has budgeted monthly costs at $40 000 per month plus $7 per student. Normally 800 students are enrolled. During March there were 730 studen...

Q: The following data for Kitchen Tile Company relates to the production of

The following data for Kitchen Tile Company relates to the production of 18 000 tiles during the past month. The entity allocates fixed overhead costs at a standard rate of $19 per direct...

Q: The Baldwin Company, in its master budget for 2022, predicted

The Baldwin Company, in its master budget for 2022, predicted total sales of $160,000, variable costs of $48,000, and fixed costs of $52,000 ($24,000 manufacturing and $28,000 nonmanufacturing). Actua...

Q: Edwards and Bell market a single line of home computers, dubbed

Edwards and Bell market a single line of home computers, dubbed the XL-98. The master budget for the coming year contained the following items: sales revenue, $400,000; variable costs, $250,000; fixed...

Q: Refer to Exhibit 14.8 and the accompanying discussion in the

Refer to Exhibit 14.8 and the accompanying discussion in the text. Demonstrate that the flexible budget variance for PVC during October 2022 was $1,680F. Exhibit 14.8:

Q: Baxter Corporation’s master budget calls for the production of 5,000

Baxter Corporation’s master budget calls for the production of 5,000 units per month and $144,000 indirect labor costs for the year. Baxter considers indirect labor as a component of variable factory...

Q: Refer to the variances you calculated in conjunction with Brief Exercise 15

Refer to the variances you calculated in conjunction with Brief Exercise 15-21 and to the information in Brief Exercises 15-16 and 15-18. Prepare the appropriate journal entries to record (a) actual...

Q: Refer to the journal entries made in Brief Exercise 15-22

Refer to the journal entries made in Brief Exercise 15-22. Provide an appropriate end-of-year closing entry for each of the following two independent situations: (a) the net factory overhead cost var...

Q: The following information is available for Brownstone Products /

The following information is available for Brownstone Products Required: 1. What was the master budget variance for July, rounded to the nearest whole dollar? Was this variance favorable or unfavora...

Q: As the new accountant for Cohen & Co., you have been

As the new accountant for Cohen & Co., you have been asked to provide a succinct analysis of financial performance for the year just ended. You obtain the following information that pertains to th...

Q: RTI Company’s master budget calls for production and sale of 18,

RTI Company’s master budget calls for production and sale of 18,000 units for $81,000, variable costs of $30,600, and fixed costs of $20,000. During the most recent period, the company incurred $32,00...

Q: For March, the Platter Valley factory of Bybee Industries budgeted $

For March, the Platter Valley factory of Bybee Industries budgeted $90,000 for fixed factory overhead cost. Its practical capacity is 2,500 direct labor hours per month (to manufacture 5,000 pairs of...

Q: (Continuation of Exercises 15-29 and 15-30)

(Continuation of Exercises 15-29 and 15-30) The Platter Valley factory of Bybee Industries uses a two-variance analysis of the total factory overhead variance. Required: 1. Use the data given in Exer...

Q: Alden Company uses a three-variance analysis for factory overhead variances

Alden Company uses a three-variance analysis for factory overhead variances. Practical capacity is defined as 32 setups and 32,000 machine hours to manufacture 6,400 units for the year. Selected data...

Q: Going into the period just ended, Ortiz & Co., manufacturer

Going into the period just ended, Ortiz & Co., manufacturer of a moderately priced espresso maker for retail sale, had planned to produce and sell 3,900 units at $100.00 per unit. Budgeted variable ma...

Q: Phoenix Management helps rental property owners find renters and charges the owners

Phoenix Management helps rental property owners find renters and charges the owners one-half of the first month’s rent for this service. For August 2022, Phoenix expects to find rent...

Q: As part of its comprehensive planning and control system, Mopar Company

As part of its comprehensive planning and control system, Mopar Company uses a master budget and subsequent variance analysis. You are given the following information that pertains to the company&acir...

Q: Acme Financial issues letters of credit to importers for overseas purchases.

Acme Financial issues letters of credit to importers for overseas purchases. The company charges a nonrefundable application fee of $4,000 and, on approval, an additional service fee of 2.0% of the am...

Q: Robinson Company has two products, A and B. Robinson’s budget

Robinson Company has two products, A and B. Robinson’s budget for August follows: On September l, these operating results for August were reported: Required: 1. For each product,...

Q: TransPacific Airlines (TPA) budgeted 80 million passenger miles, or

TransPacific Airlines (TPA) budgeted 80 million passenger miles, or 5 percent of the total market for the year just completed, at a contribution margin of 40 cents per mile. The budgeted average price...

Q: EZ Tees Corporation produces T-shirts. The company uses a

EZ Tees Corporation produces T-shirts. The company uses a standard costing system and has set the following standards for direct materials and direct labor (for one shirt): Fabric (0.8 yds. @ $1.60) $...

Q: Secor Educational Services had budgeted its training service charge at $120

Secor Educational Services had budgeted its training service charge at $120 per hour. The company planned to provide 30,000 hours of training services during Year 3. By lowering the service charge to...

Q: At the beginning of its most recent accounting period, Zelma Company

At the beginning of its most recent accounting period, Zelma Company had planned to clean 400 house roofs at an average price of $450 per roof. By reducing the service charge to $400 per roof, the com...

Q: Kemp Tables Inc. (KTI) makes picnic tables of 2

Kemp Tables Inc. (KTI) makes picnic tables of 2 × 4 planks of treated pine. It sells the tables to large retail discount stores such as Walmart. After reviewing the following data generat...

Q: The Redmond Management Association held its annual public relations luncheon in April

The Redmond Management Association held its annual public relations luncheon in April Year 2. Based on the previous year’s results, the organization allocated $25,290 of its operatin...

Q: Which of the following is indicated by an unfavorable fixed overhead spending

Which of the following is indicated by an unfavorable fixed overhead spending variance? a. There was more excess capacity than planned b. The price of fixed overhead items cost more than budgeted c. T...

Q: For the stamping department of a manufacturing firm, the standard cost

For the stamping department of a manufacturing firm, the standard cost for direct labor is $15 per hour, and the production standard calls for 1,000 stampings per hour. During February, 198 hours were...

Q: Four Seasons Industries has established direct labor performance standards for its maintenance

Four Seasons Industries has established direct labor performance standards for its maintenance and repair shop. However, some of the labor records were destroyed during a recent fire. The actual hours...

Q: In addition to the information for Acme Company, the standard fixed

In addition to the information for Acme Company, the standard fixed overhead application rate per unit consists of $2 per machine hour and each unit is allowed a standard of 1 hour of machine time. Re...

Q: Williamson Inc. manufactures quality replacement parts for the auto industry.

Williamson Inc. manufactures quality replacement parts for the auto industry. The company uses a standard costing system and isolates variances as soon as possible. The purchasing manager is responsib...