Standard Products Company Recognizes Variances from Standards at the Earliest $\quad$

question 139

Essay

Standard Products Company recognizes variances from standards at the earliest opportunity,
and the quantity of direct materials purchased is equal to the quantity used.The following information is available for the most recent month.Assume the allocation base for fixed overhead costs is the number of units.
$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\text { Direct materials Direct Labor }$
$\begin{array}{lll}\text { Standard quantity } / \text { unit } & 6.00 \mathrm{lbs} . & 2.5 \mathrm{hrs} \\\text { Standard price } / \mathrm{lb} \text {. or } \mathrm{hr} . & \$ 8.10 / \mathrm{lb} . & \$ 8.00 / \mathrm{hr} \\\text { Actual quantity } / \text { unit } & 6.25 \mathrm{lbs} . & 2.8 \mathrm{hrs} \text {. } \\\text { Actual price } / 1 \mathrm{~b} \text {. or } \mathrm{hr} \text {. } & \$ 8.00 / 1 \mathrm{~b} \text {. } & \$ 7.50 / \mathrm{hr} \\\text { Price variance } \$ 562.50 \mathrm{~F} & \$ 1,260.00 \mathrm{~F} &\\\text { Efficiency variance }&\$ 1,822.50 \mathrm{U} & \$ 2,160.00 \mathrm{U}\\\\\text { Static budget volume } & 800 \text { units } \\\text { Actual volume } & 900 \text { units } \\\text { Actual overhead cost } & \$ 11,000\\\text {Standard variable overhead cost }& \$ 5 /\text { unit } \\ \text {unit Standard fixed overhead cost} & \$ 5,600 \\\text { Overhead flexible budget variance } & \$ 900 \mathrm{U} \\\text { Production volume variance } & \$ 700 \mathrm{~F} &\end{array}$

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Journalize the purchase and usage of direct materials including the related variances.

Comprehend the challenges and negative consequences associated with IT implementation.

Acknowledge the advancement of automation and AI in transforming traditional processes and industries.

Analyze the regulatory and ethical considerations in the deployment of IT solutions.

Differentiate between data, information, knowledge, and how IT manages these elements.

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Definitions:

Increasing Cost Industry

An industry in which production costs rise as output increases, often due to factors like limited resources or higher prices for inputs.

Constant Cost Industry

An industry in which the costs of production do not change as the industry's output changes, maintaining the same unit cost for production regardless of scale.

Demand

The quantity of a product or service that consumers are willing and able to purchase at various prices over a given period of time.

Supply

The total amount of a product or service available for purchase at any specified price.