Horton Company Adopted a Standard Cost System Several Years Ago $\begin{array}{lrr} \text { Material:8 kilograms@\$5 per kilogram } &\$40.00\\ \text { Labor:6hours@\$8.20per hour} &\$49.20\\\end{array}$

question 86

Essay

Horton Company adopted a standard cost system several years ago. The standard costs for the prime costs of its single product are as follows:
$\begin{array}{lrr} \text { Material:8 kilograms@\$5 per kilogram } &\$40.00\\ \text { Labor:6hours@\$8.20per hour} &\$49.20\\\end{array}$

The following operating data were taken from the records for November:
$\begin{array}{ll} \text { Units completed } & \text { 5,600units } \\ \text { Budgeted output } & 6,00 \text { units } \\\text { Purchase of materials } & 50,000 \text { kilograms } \\ \text { Total actual labor costs } & \$ 300,760 \\\text { Actual labor hours } & 36,500 \text { hours } \\ \text { Material efficiency (quantity) variance } & \$ 1,50 \text { unfavorable } \\\text { Total material variance } & \$750 \text { unfavorable } \\\end{array}$
Required:
(Be sure to indicate whether the variances are favorable or unfavorable and show your work.)
a. What is the direct labor rate variance for November?
b. What is the direct labor efficiency variance for November?
c. What is the actual kilograms of material used in the production process during November?
d. Assume the purchasing department is responsible for the material price variance, what is the actual price paid per kilogram of material during November (assume no increase/decrease in inventory during the month)?

Comprehend the role and impact of special journals in the accounting process and their efficiency benefits.

Analyze and reconcile discrepancies between control accounts and subsidiary ledgers.

Describe the principles of accounting system development and the importance of cost-effectiveness, flexibility, and useful output.

Grasp the ethical standards in accounting practices and the consequences of violations.

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Definitions:

Marginal Tax Rate

The marginal tax rate is the rate of tax applied to the next dollar of taxable income, indicating the percentage of tax an individual or corporation pays on an additional dollar of income.

Yield-to-Maturity

The total return anticipated on a bond if the bond is held until it matures, considering all interest payments and repaid principal.

After-Tax Cost of Debt

After-Tax Cost of Debt represents the net cost of debt to a company after accounting for the tax deductions on interest expenses.

Yield-to-Maturity

The total return anticipated on a bond if the bond is held until it matures, considering all interest payments made over the life of the bond and the difference between the purchase price and the maturity value.