In variance analysis, how do you distinguish between a favorable variance and an unfavorable bariance?
Homework Answers
Variances are the differences between the standard cost (costs which should have been incurred, calculated on the basis of standards) and the actual costs
The basic rule is that when the standard costs are more than the actual costs, the variances are favorable (since the cost incurred is less than what should have been and it is good for the company)
When the standard costs are lower than the actual costs, it results in unfavorable variance.
It is opposite in case of revenue, When actual is more, it is favorable and vice versa
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In
variance analysis, how do you distinguish between a favorable
variance and an unfavorable bariance?
Can you please explain why it favorable and unfavorable. thank you. P 9-A Variance Analysis (In...
Can
you please explain why it favorable and unfavorable. thank
you.
P 9-A Variance Analysis (In Class) Pear Company is a manufacturing firm that specializes in the production of a single product. Overhead is applied based on direct labor hours. Standard Cost Card (budget for one unit) The standard cost card shows the manager what the final manufactured cost should be for the company's product. Standard Standard Quantity Price Standard or Hours or Rate Cost Direct Materials 3.5 feet х...
What is the direct labor rate variance? 50 unfavorable 125 unfavorable 125 favorable The following information...
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A current performance report reveals a large favorable sales volume variance but an unfavorable sales price...
A current performance report reveals a large favorable sales volume variance but an unfavorable sales price variance. You don't expect a large increase in sales volume. What steps do you take to analyze the situation?
McDormand, Inc., reported a $2,400 unfavorable price variance for variable overhead and a $24,000 unfavorable price...
McDormand, Inc., reported a $2,400 unfavorable price variance for variable overhead and a $24,000 unfavorable price variance for fixed overhead. The flexible budget had $1,039,200 variable overhead based on 34,640 direct labor-hours; only 34,000 hours were worked. Total actual overhead was $1,790,400. The number of estimated hours for computing the fixed overhead application rate totaled 37,200 hours. Required: a. Prepare a variable overhead analysis. b. Prepare a fixed overhead analysis. Answer is not complete. Complete this question by entering your...
If both favorable and unfavorable variances exist, the variances are subtracted from each other. The variance...
If both favorable and unfavorable variances exist, the variances are subtracted from each other. The variance is determined to be favorable or unfavorable based on which one is the larger amount. True False
Last year, our materials price variance was favorable; the materials quantity variance was unfavorable; and the lab...
Last year, our materials price variance was favorable; the materials quantity variance was unfavorable; and the labor efficiency variance was unfavorable. One likely explanation fitting this variance pattern is: O A. Labor costs were higher than expected OB. High quality materials were purchased C. Low quality materials were purchased tortas ware purchased OD. High quality materials were purchased but the labor was badly supervised Reset Selection
Calculate the variances and identify whether the variance is favorable (F) or unfavorable (U).
Complete the table below for the missing variances Calculate the variances and identify whether the variance is favorable (F) or unfavorable (U). (b) Total Direct Materials Variance (c) Total Direct Labor Variance (e) Total Variable Overhead Variance (f) Total Fixed Overhead Variance (d) Total Manufacturing Overhead Variance (a) Total Flexible Budget Product Cost Variance
Required 2 Required 1 Required 3 Compute the overhead volume variance. Classify as favorable or unfavorable....
Required 2 Required 1 Required 3 Compute the overhead volume variance. Classify as favorable or unfavorable. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance. Do not round intermediate calculations.) Volume Variance Volume variance Required 1 Required 3 Required 1 Required 2 Required 3 Prepare an overhead variance report at the actual activity level of 9,000 units. Classify as favorable or unfavorable. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no...
McDormand, Inc., reported a $3,400 unfavorable price variance for variable overhead and a $34,000 unfavorable price...
McDormand, Inc., reported a $3,400 unfavorable price variance for variable overhead and a $34,000 unfavorable price variance for fixed overhead. The flexible budget had $1,083,000 variable overhead based on 36,100 direct labor-hours, only 34,100 hours were worked. Total actual overhead was $1,810,400. The number of estimated hours for computing the fixed overhead application rate totaled 37,500 hours. Required: a. Prepare a variable overhead analysis. b. Prepare a fixed overhead analysis. Complete this question by entering your answers in the tabs...
Difference Favorable Unfavorable Neither Favorable nor Unfavorable Budget Actual Sales in units 7,700 11,000 3,300 Favorable...
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Can
you please explain why it favorable and unfavorable. thank
you.
P 9-A Variance Analysis (In Class) Pear Company is a manufacturing firm that specializes in the production of a single product. Overhead is applied based on direct labor hours. Standard Cost Card (budget for one unit) The standard cost card shows the manager what the final manufactured cost should be for the company's product. Standard Standard Quantity Price Standard or Hours or Rate Cost Direct Materials 3.5 feet х...
What is the direct labor rate variance? 50 unfavorable 125 unfavorable 125 favorable The following information for Q 7-8 The St. Augustine Corporation originally budgeted for $360,000 of fixed overhead at 100% normal production capacity. Production was budgeted to be 12,000 units. The standard hours for production were 5 hours per unit. The variable overhead rate was S3 per hour. Actual fixed overhead was $360,000 and actual variable overhead was $170,000. Actual production was 11,800 units. 7. The variable factory...
McDormand, Inc., reported a $2,400 unfavorable price variance for variable overhead and a $24,000 unfavorable price variance for fixed overhead. The flexible budget had $1,039,200 variable overhead based on 34,640 direct labor-hours; only 34,000 hours were worked. Total actual overhead was $1,790,400. The number of estimated hours for computing the fixed overhead application rate totaled 37,200 hours. Required: a. Prepare a variable overhead analysis. b. Prepare a fixed overhead analysis. Answer is not complete. Complete this question by entering your...
Last year, our materials price variance was favorable; the materials quantity variance was unfavorable; and the labor efficiency variance was unfavorable. One likely explanation fitting this variance pattern is: O A. Labor costs were higher than expected OB. High quality materials were purchased C. Low quality materials were purchased tortas ware purchased OD. High quality materials were purchased but the labor was badly supervised Reset Selection
Required 2 Required 1 Required 3 Compute the overhead volume variance. Classify as favorable or unfavorable. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance. Do not round intermediate calculations.) Volume Variance Volume variance Required 1 Required 3 Required 1 Required 2 Required 3 Prepare an overhead variance report at the actual activity level of 9,000 units. Classify as favorable or unfavorable. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no...
McDormand, Inc., reported a $3,400 unfavorable price variance for variable overhead and a $34,000 unfavorable price variance for fixed overhead. The flexible budget had $1,083,000 variable overhead based on 36,100 direct labor-hours, only 34,100 hours were worked. Total actual overhead was $1,810,400. The number of estimated hours for computing the fixed overhead application rate totaled 37,500 hours. Required: a. Prepare a variable overhead analysis. b. Prepare a fixed overhead analysis. Complete this question by entering your answers in the tabs...
Difference Favorable Unfavorable Neither Favorable nor Unfavorable Budget Actual Sales in units 7,700 11,000 3,300 Favorable Variable expenses Sales commissions $2.860 $1,012 Unfavorable Advertising expense $1,848 1,078 3.696 88 Favorable 990 3,850 Travel expense 154 Unfavorable Free samples given out 1,540 1.210 330 Favorable Total variable 8,162 8,910 748 Unfavorable Fixed expenses Rent 1,100 1,000 1,100 1,000 -O-Neither Favorable nor Unfavorable -- Neither Favorable nor Unfavorable Sales salaries Office salaries 600 600 -O-Neither Favorable nor Unfavorable Depreciation-autos (sales staff) Total...
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