Business Finance
Standard Cost and Variance Excel Sheet

Question Description

I don’t know how to handle this Accounting question and need guidance.

Attached is the excel file for the Chapter 10 HW. Complete your work in Excel and make sure that you complete all three tabs: the first tab has problems 1-4; the second tab has problem #5 with parts a and b; the third tab has problem #6 with parts a and b.

Unformatted Attachment Preview

Name: Numbers 1 & 2 are worth 2 points each. 1. True or false: standards are used to help break down activity variances into two categories: price variances and quantity variances. Answer: 2. True or false: when direct labor is used as the basis for applying standard VMOH rates, if the direct labor efficiency variance is favorable, the variable overhead efficiency variance will be unfavorable. Answer: 3. Short answer, worth 3 points. Tell as much as you know, based on the information we've learned in chapter 10. Feel free to add more rows to the answer box if you need more space. What does an unfavorable labor efficiency variance mean? What could be the cause of such a variance? 4. Short answer, worth 3 points. Tell as much as you know, based on the information we've learned in chapter 10. Feel free to add more rows to the answer box if you need more space. What does an unfavorable materials quantity variance mean? What could be the cause of such a variance? wo categories: price variances OH rates, if the direct labor unfavorable. formation we've learned in space. use of such a variance? formation we've learned in space. cause of such a variance? #5 parts a) and b). Total of 10 points possible. Show your work for partial credit. Bats, Inc. manufactures one type of baseball bat which requires a specific type of metal. During the month ending May 31, the company manufactured 5,000 bats, using 11,000 kg of metal. The metal cost the company $198,000. According to the standard cost card, each bat should require 2 kg of metal at a cost of $20 per kg. a) According to the standards, what cost for metal should have been incurred to make 5,000 bats? How much greater or less is this than the cost that was incurred? b) Break down the difference computed in a) above into a materials price variance and a materials quantity variance. Explain what these variances mean. #6 parts a) and b). Total of 10 points possible. Show your work for partial credit. Darcy Distribution assists their clients with the coordination of product distribution and uses a predetermined variable overhead rate based on direct-labor hours. In the month ending April 30, Darcy coordinated 650 distribution projects using 1,200 direct labor hours. The company incurred a total of $22,000 in variable overhead costs. According to the standard cost card, 2 direct labor hours are required to complete one distribution project and the variable overhead rate is $20.00 per direct labor hour. a) According to the standards, what variable overhead cost should have been incurred to complete the coordination of 650 distribution projects? How much does this differ from the actual variable overhead cost? b) Break down the difference computed in a) above into a variable overhead rate variance and a variable overhead efficiency variance. d uses a ng April 30, Darcy urred a total of distribution project to complete the ariable overhead nce and a variable ...
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Final Answer

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Name:

Numbers 1 & 2 are worth 2 points each.
1. True or false: standards are used to help break down activity variances into two categories: price variances
and quantity variances.
Answer:

TRUE

2. True or false: when direct labor is used as the basis for applying standard VMOH rates, if the direct labor
efficiency variance is favorable, the variable overhead efficiency variance will be unfavorable.
Answer:

FALSE

3. Short answer, worth 3 points. Tell as much as you know, based on the information we've learned in
chapter 10. Feel free to add more rows to the answer box if you need more space.

What does an unfavorable labor efficiency variance mean? What could be the cause of such a variance?
An unfavorable labor efficiency variance means that labor efficiency has worsened, meaning that the actual
hours incurred are more than the standard hours allowed. For example, if a company incurs 1,000 actual
direct labor hours and the standard allowed number of direct labor hours is 800, then the company has
unfavorable labor efficiency variance since more hours have been used. Causes of unfavarable labor efficiency...

FrankRose23 (2497)
Purdue University

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