The Ending Balance of A(n)-----------Inventory Account for a Production Department

question 92

Short Answer

The ending balance of a(n)-----------Inventory account for a production department must agree with the amount shown for that department in the cost of production report.

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Definitions:

Variable Overhead

Costs that vary with production volume, such as utilities for a factory, which do not remain constant as production levels change.

Materials Quantity Variance

Materials Quantity Variance is the difference between the actual quantity of materials used in production and the expected quantity, multiplied by the standard cost per unit, indicating efficiency in material usage.

Labor Efficiency Variance

The difference between the actual hours worked and the standard hours allowed for the actual production, multiplied by the standard labor rate.

Labor Rate Variance

The difference between the actual costs of labor and the expected (or standard) costs, based on the standard labor rate.