Actual actual actual costs costs costs incurred

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Actual Actual Actual Costs Costs Costs Incurred Incurred Incurred (Actual (Actual (Actual Input Input Input Qty. Qty. Qty. × Actual Actual Actual Price) Price) Price) Actual Actual Actual Input Input Input Qty. Qty. Qty. × Budgeted Budgeted Budgeted Price Price Price Flexible Flexible Flexible Budget Budget Budget (Budgeted (Budgeted (Budgeted Input Input Input Qty. Qty. Qty. Allowed Allowed Allowed for for for Actual Actual Actual Output Output Output × Budgeted Budgeted Budgeted Price) Price) Price) Wool (given) $8,295.50 2,633.50 $3.00 $7,900.50 230 12 $3.00 $8,280.00 Actual Actual Actual Costs Costs Costs Incurred Incurred Incurred (Actual (Actual (Actual Input Input Input Qty. Qty. Qty. × Actual Actual Actual Price) Price) Price) Actual Actual Actual Input Input Input Qty. Qty. Qty. × Budgeted Budgeted Budgeted Price Price Price Flexible Flexible Flexible Budget Budget Budget (Budgeted (Budgeted (Budgeted Input Input Input Qty. Qty. Qty. Allowed Allowed Allowed for for for Actual Actual Actual Output Output Output × Budgeted Budgeted Budgeted Price) Price) Price) (given) $7,814.50 836 $10.50 $8,778.00 230 3.5 $10.50 $8,452.50 Direct Materials Price Variance (time of purchase = time of use) Direct Materials Control 7,900.50 Direct Materials Price Variance 395.00 Accounts Payable Control or Cash 8,295.50 Direct Materials Efficiency Variance Work in Process Control 8,280.00 Direct Materials Efficiency Variance 379.50 Direct Materials Control 7,900.50
3. Plausible explanations for the above variances include:
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7-38 7-38 7-38 (30 min.) Use Use Use of of of materials materials materials and and and manufacturing manufacturing manufacturing labor labor labor variances variances variances for for for benchmarking benchmarking benchmarking .
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7-35 To: Boss From: Junior Accountant Re: Benchmarking & productivity improvements Date: October 15, 2010 Benchmarking advantages - we can see how productive we are relative to our competition - we can see the specific areas in which there may be opportunities for us to reduce costs Benchmarking disadvantages

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