Horngren's Cost Accounting: A Managerial Emphasis (16th Edition)
16th Edition
ISBN: 9780134475585
Author: Srikant M. Datar, Madhav V. Rajan
Publisher: PEARSON
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Chapter 7, Problem 7.32E
Price and efficiency variances, benchmarking. Nantucket Enterprises manufactures insulated cold beverage cups printed with college and corporate logos, which it distributes nationally in lots of 12 dozen cups. In June 2017, Nantucket produced 5,000 lots of its most popular line of cups, the 24-ounce lidded tumbler, at each of its two plants, which are located in Providence and Amherst. The production manager, Shannon Bryant, asks her assistant, Joel Hudson, to find out the precise per-unit budgeted variable costs at the two plants and the variable costs of a competitor, Beverage Mate, who offers similar-quality tumblers at cheaper prices. Hudson pulls together the following information for each lot:
- 1. What is the budgeted variable cost per lot at the Providence Plant, the Amherst Plant, and at Beverage Mate?
Required
- 2. Using the Beverage Mate data as the standard, calculate the direct materials and direct manufacturing labor price and efficiency variances for the Providence and Amherst plants.
- 3. What advantage does Nantucket get by using Beverage Mate’s benchmark data as standards in calculating its variances? Identify two issues that Bryant should keep in mind in using the Beverage Mate data as the standards.
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Brik, located in Port St. Lucie, Florida, produces two lines of electric toothbrushes: deluxe and standard. Because Brik can sell all the toothbrushes it can produce, the owners are expanding the plant. They are deciding which product line to
emphasize. To make this decision, they assemble the following data:
E (Click the icon to view the data.)
After expansion, the factory will have a production capacity of 4,900 machine hours per month. The plant can manufacture either 62 standard electric toothbrushes or 24 deluxe electric toothbrushes per machine hour.
Read the requirements.
.....
Requirement 1. Identify the constraining factor for Brik.
Brik's constraint is
Requirement 2. Prepare a product mix analysis to show which product line to emphasize.
Deluxe
Standard
Toothbrushes
Toothbrushes
Data table
Contribution margin per
Per Unit
Deluxe
Standard
Decision:
Toothbrush
Toothbrush
Sales price
2$
82 $
54
22
18
Variable costs
Emphasize the Brik standard electric toothbrush
$
60 $
36…
Chapter 7 Solutions
Horngren's Cost Accounting: A Managerial Emphasis (16th Edition)
Ch. 7 - What is the relationship between management by...Ch. 7 - What are two possible sources of information a...Ch. 7 - Distinguish between a favorable variance and an...Ch. 7 - What is the key difference between a static budget...Ch. 7 - Why might managers find a flexible-budget analysis...Ch. 7 - Describe the steps in developing a flexible...Ch. 7 - List four reasons for using standard costs.Ch. 7 - How might a manager gain insight into the causes...Ch. 7 - List three causes of a favorable direct materials...Ch. 7 - Describe three reasons for an unfavorable direct...
Ch. 7 - How does variance analysis help in continuous...Ch. 7 - Why might an analyst examining variances in the...Ch. 7 - Prob. 7.13QCh. 7 - When inputs are substitutable, how can the direct...Ch. 7 - Benchmarking against other companies enables a...Ch. 7 - Metal Shelf Companys standard cost for raw...Ch. 7 - All of the following statements regarding...Ch. 7 - Amalgamated Manipulation Manufacturings (AMM)...Ch. 7 - Atlantic Company has a manufacturing facility in...Ch. 7 - Basix Inc. calculates direct manufacturing labor...Ch. 7 - Flexible budget. Sweeney Enterprises manufactures...Ch. 7 - Flexible budget. Bryant Companys budgeted prices...Ch. 7 - Flexible-budget preparation and analysis. Bank...Ch. 7 - Flexible budget, working backward. The Clarkson...Ch. 7 - Flexible-budget and sales volume variances....Ch. 7 - Price and efficiency variances. Sunshine Foods...Ch. 7 - Materials and manufacturing labor variances....Ch. 7 - Direct materials and direct manufacturing labor...Ch. 7 - Price and efficiency variances, journal entries....Ch. 7 - Materials and manufacturing labor variances,...Ch. 7 - Journal entries and T-accounts (continuation of...Ch. 7 - Price and efficiency variances, benchmarking....Ch. 7 - Static and flexible budgets, service sector....Ch. 7 - Flexible budget, direct materials, and direct...Ch. 7 - Variance analysis, nonmanufacturing setting. Joyce...Ch. 7 - Comprehensive variance analysis review. Ellis...Ch. 7 - Possible causes for price and efficiency...Ch. 7 - Material-cost variances, use of variances for...Ch. 7 - Direct manufacturing labor and direct materials...Ch. 7 - Direct materials efficiency, mix, and yield...Ch. 7 - Direct materials and manufacturing labor...Ch. 7 - Direct materials and manufacturing labor...Ch. 7 - Use of materials and manufacturing labor variances...Ch. 7 - Direct manufacturing labor variances: price,...Ch. 7 - Direct-cost and selling price variances. MicroDisk...Ch. 7 - Variances in the service sector. Derek Wilson...Ch. 7 - Prob. 7.47P
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