Excel Applications for Accounting Principles
4th Edition
ISBN: 9781111581565
Author: Gaylord N. Smith
Publisher: Cengage Learning
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Chapter 24, Problem 2R
The president of McGrade Industries wants an analysis prepared to help explain why the variances computed in requirement 1 occurred. Using the worksheet called PRIMEVAR that follows these requirements, calculate the material and labor variances for McGrade Industries. The problem requires you to enter the input in the Data Section as well as formulas in the Answer Section.
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Bill Wilson, the financial accountant at Robson Ltd is considering implementing a standard costing system. He has asked your advice on the following:
a) Setting standards
b) Investigating variances
c) Taking corrective action on large variances
Required:
Prepare a short report for Bill addressing these three areas.
Create a narrative explanation for the variances. Create a scenario, context, or circumstance that can hypothetically account for the variance's nature and cause. Make a recommendation based on the variance calculated. Carry out this procedure for Overhead only.
Please help me to answer the required 1 of Graphical Approach for Material Variances. I also uploaded the example illustration that was given to me. Thank you so much.
Chapter 24 Solutions
Excel Applications for Accounting Principles
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- Analyze the variances that you computed in requirements 1 and 2. Was the new service a success from an overall cost-control perspective? Briefly discuss. What seems to have happened that would give rise to customer complaints?arrow_forwardThe PERT is combined with cost data to produce a PERT cost analysis to a. calculate the total project cost inclusive of the additional slack time.b. evaluate and optimize trade-offs between time of an event’s completion and its cost to complete. c. implement computer-integrated manufacturing concepts. d. avoid the problem of time variance analysis. e. calculate expected activity times.arrow_forwardPlease assist with requirements 1 and 2, providing explanations for each calculation in detail. Thanks! Requirements 1. Compute the variable overhead cost and efficiency variances and fixed overhead cost and volume variances. 2. Explain why the variances are favorable or unfavorable.arrow_forward
- In a manufacturing process the assembly line speed (feet per minute) was thought to affect the number of defective parts found during the inspection process. To test this theory, managers devised a situation in which the same batch of parts was inspected visually at a variety of line speeds. They collected the following data: Develop a scatter chart with line speed as the independent variable. What does the scatter chart indicate about the relationship between line speed and the number of defective parts found? Use the data to develop an estimated regression equation that could be used to predict the number of defective parts found, given the line speed. What is the estimated regression model? Test whether each of the regression parameters β0 and β1 is equal to zero at a 0.01 level of significance. What are the correct interpretations of the estimated regression parameters? Are these interpretations reasonable? How much of the variation in the number of defective parts found for the sample data does the model you estimated in part (b) explain?arrow_forwardHow do I find the actual rate for variable manufacturing overhead. I’m trying to compute the variable overhead rate variance. I’ve attached a photo of my math in the way I was taught to do it.arrow_forwardThe management of Al Safa Production LLC requested you to identify from the following how direct labor variances may be analyzed into: a. Usage and price variances b. Efficiency and rate variances c. Usage and rate variances d. Efficiency and price variancesarrow_forward
- 1. Why are standard cost systems used? 2. How are standards set for material, labor, and overhead? 3. How is variance analysis used for control and performance evaluation?arrow_forwarda. Analyze the factory overhead variance of Golden Manufacturers Inc., based on the given data.arrow_forwardM Question 6 - Ch 23: HOME ation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253A%252F%252Fnewconnect.mheducation. Trini Company set the following standard costs per unit for its single product Direct materials (30 pounds @ $5.00 per pound) Direct labor (7 hours @ $14 per hour) Variable overhead (7 hours @ $7 per hour) Fixed overhead (7 hours @ $9 per hour) Standard cost per unit Production (in units) Standard direct labor hours (7 DLH per unit) Budgeted overhead (flexible budget) Fixed overhead Variable overhead Overhead is applied using direct labor hours. The standard overhead rate is based on a predicted activity level of 80% the company's capacity of 51,000 units per quarter. The following additional information is available. Direct materials (1,377,000 pounds @ $5.00 per pound) Direct labor (321,300 hours @ $14 per hour) Overhead (321,300 hours @ $16 per hour) Standard (budgeted) cost Variable overhead Actual cost Saved 80 F3 Actual costs incurred during…arrow_forward
- The following information is available for a manufacturer. Compute the direct labor rate and efficiency variances and label them as favorable (F) or unfavorable (U).arrow_forwardCalculate the manufacturing overhead variance for Harriott and state the journal entries necessary to dispose of the variance.arrow_forwardPLEASE USE THE ATTACHED PHOTO TO ANSWER THE FOLLOWING QUESTIONS Outline 2 potential causes for each of the material and labour variances calculated above (Do not explain the total variances). Explain the possible relationship between the material price and usage variances. Distinguish between ideal and attainable standards and indicate which is the better one to use Give reasons for your answersarrow_forward
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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