The following events took place at Tasty-Toppins Inc., a pizza shop that specializes in home delivery, during 2017:
Required:
Determine the amount of depreciation or amortization recorded for each asset in the current year and the book value of each asset at the end of the year. For (c), indicate the accumulated depreciation and book value at the time of sale. Do not round intermediate calculations. If required, round your final answers to the nearest dollar. If an amount box does not require an entry, leave it blank or enter "0".
Asset |
2017 Depreciation/ Amortization |
Ending/Time-of-Sale Book Value |
Time-of-Sale Accumulated Depreciation |
a. Truck | $ | $ | |
b. Equipment | $ | $ | |
c. Truck | $ | $ | $ |
d. Patent | $ | $ |
1)a Material price variance = AQ [AP -SP]
= 15000 [2.85 - 2.40]
= 15000 *0.45
= 6750
Material quantity variance = SR [AQ-SQ]
= 2.40[15000 - (4000 * 3)]
= 2.45[15000 - 12000]
= 2.45 * 3000
= 7350
B)Labor rate variance = AH [AR-SR].
= 3400 [7.60- 7.90 ]
= 3400
Labor efficiency variance = SR [AH -SH]
= 7.90 [3400 - (4000*.7)]
= 7.90[3400 -2800 ]
= 7.90* - 600
= - 4740 F
C)variable overhead rate variance = Actual cost - [AMH *SR]
= 10260 - [2700 * 3.40]
= 10260 - 9180
= 1080
Efficiency variance = SR [AMH -SMH]
= 3.40 [2700- (4000* 0.6)]
= 3.40[2700 - 2400]
= 3.40 * - 300
= -1020
2)Net variance = 6750 F+ 7350U+3400U-4740F+1080U -1020 F
= 8800U
3)Significant variance :
Material quantity variance = 7350 U -can be due to low quality material used or inefficiency in using material
Labor rate variance = 4740U -Can be due to high demand for labor pay
The following events took place at Tasty-Toppins Inc., a pizza shop that specializes in home delivery,...
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