INTERMEDIATE MANAGEMENT ACCOUNTING
IN-CLASS DISCUSSION QUESTIONS (ICQs)
CHAPTERS 7 & 8
TEMPLATE
ICQ1
7-34 (30 min.) Direct manufacturing labour and direct materials variances, missing data. 1. Flexible Budget (Budgeted Input Actual Costs Qty. Allowed for Incurred (Actual Actual Input Qty. Actual Output Input Qty. × Actual Price) × Budgeted Price × Budgeted Price) Direct mfg. labour
Price variance Efficiency variance
Flexible-budget variance
2. Unfavourable direct materials efficiency variance of $12,500 indicates that more pounds of direct materials were actually used than the budgeted quantity allowed for actual output. =
Budgeted pounds allowed for the output achieved
=
Actual pounds of direct materials used =
3. Actual price paid per pound = = $
4. Actual Costs Incurred Actual Input × (Actual Input × Actual Price) Budgeted Price
Price variance
ICQ2
8-16 (20 min.) Variable manufacturing overhead, variance analysis.
1. Variable Manufacturing Overhead Variance Analysis for Esquire Clothing for June 2013 -------------------------------------------------
Actual Costs Incurred-------------------------------------------------
Actual Input Qty. -------------------------------------------------
× Actual Rate-------------------------------------------------
(1) | -------------------------------------------------
-------------------------------------------------
-------------------------------------------------
Actual Input Qty. -------------------------------------------------
× Budgeted Rate-------------------------------------------------
(2) | -------------------------------------------------
Flexible Budget:-------------------------------------------------
Budgeted Input Qty.-------------------------------------------------
Allowed for -------------------------------------------------
Actual Output -------------------------------------------------
× Budgeted Rate-------------------------------------------------
(3) | -------------------------------------------------
Allocated:-------------------------------------------------
Budgeted Input Qty.-------------------------------------------------
Allowed for-------------------------------------------------
Actual Output-------------------------------------------------
× Budgeted Rate-------------------------------------------------
(4) | | | | | | | | | Never a variance
Efficiency variance
Rate variance
Never a variance
Flexible-budget variance
ICQ3
8-17 (20 min.) Fixed manufacturing overhead variance analysis. 1 & 2. = = = Actual Costs Incurred(1) | Same Budgeted Lump Sum(as in Static Budget)Regardless ofOutput Level(2) | Flexible Budget:Same Budgeted Lump Sum (as in Static Budget)Regardless ofOutput Level(3) | Allocated:Budgeted Input Qty.Allowed for Actual Output × Budgeted Rate(4) | | | | | | | | | Rate variance Never a variance Production-volume variance
Flexible-budget variance Production-volume variance 