Liberty ACCT 212 Chapter 8 Homework Answers Complete Solutions
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Tempo Company’s fixed budget (based on sales of 10,000 units) for the first quarter reveals the following.
(1) Compute the total variable cost per unit.
(2) Compute the total fixed costs.
(3) Compute the income from operations for sales volume of 8,000 units.
(4) Compute the income from operations for sales volume of 12,000 units.
Bay City Company’s fixed budget performance report for July follows. The $587,000 budgeted total expenses include $400,000 variable expenses and $187,000 fixed expenses. Actual expenses include $177,000 fixed expenses.
Prepare a flexible budget performance report that shows any variances between budgeted results and actual results. List fixed and variable expenses separately. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance. Do not round your intermediate calculations. Round your final answers to whole dollars.)
A manufactured product has the following information for June.
(1) Compute the standard cost per unit.
(2) Compute the total cost variance for June.
Reed Corp. has set the following standard direct materials and direct labor costs per unit for the product it manufactures.
During June the company incurred the following actual costs to produce 8,400 units.
(1) Compute the direct materials price and quantity variances. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance.)
(2) Compute the direct labor rate variance and the direct labor efficiency variance. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance.)
Hart Company made 3,220 bookshelves using 22,220 board feet of wood costing $293,304. The company’s direct materials standards for one bookshelf are 8 board feet of wood at $13.10 per board foot.
(1) Compute the direct materials price and quantity variances and classify each as favorable or unfavorable.
(2) Hart applies management by exception by investigating direct materials variances of more than 5% of actual direct materials costs. Which direct materials variances will Hart investigate further?
Which direct materials variances will Hart investigate further?
(1) Prepare the journal entry to charge direct materials costs to Work in Process Inventory and record the materials variances.
(2) Assume that Hart’s materials variances are the only variances accumulated in the accounting period and that they are immaterial. Prepare the adjusting journal entry to close the variance accounts at period-end.
Javonte Co. set standards of 2 hours of direct labor per unit of product and $17.00 per hour for the labor rate. During October, the company uses 14,500 hours of direct labor at a $249,400 total cost to produce 7,600 units of product. In November, the company uses 18,500 hours of direct labor at a $319,125 total cost to produce 8,000 units of product.
(1) Compute the direct labor rate variance, the direct labor efficiency variance, and the total direct labor cost variance for each of these two months. Classify each variance as favorable or unfavorable.
Which direct labor variances will the compnay investigate further?