The trial balance for Metlock Corporation shows the following for its DM and DL variances at...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
The trial balance for Metlock Corporation shows the following for its DM and DL variances at year-end, prior to closing entries. DM price variance DM efficiency variance DL price variance DL efficiency variance (a) DM price variance DM efficiency variance DL price variance Debit. Throughout the year, actual purchase costs for DM totaled $233,250; transfers of DM cost into production totaled $234,200. The total flexible budget DL cost was $188,500 this year. DL efficiency variance $10,300 530 Identify whether each total variance above is favorable or unfavorable. The variances with 15,350 Credit How did you determine this status? $5,290 ✓balances are unfavorable, and the variances with a ✓balances are favorable. Assume the company's threshold for determining the materiality of each variance is 5% of its flexible budget cost. Calculate the significance level of each DM variance in comparison to the DM flexible budget cost. Calculate the significance level of each DL variance in comparison to the DL flexible budget cost. Compare each variance's significance level to the company's threshold of 5%. Which of these variances (if any) are concerning (i.e., material) to the company? (Round answers to 2 decimal places, e.g. 15.25%.) DM price variance DM efficiency variance DL price variance DL efficiency variance % % % % < v The trial balance for Metlock Corporation shows the following for its DM and DL variances at year-end, prior to closing entries. DM price variance DM efficiency variance DL price variance DL efficiency variance (a) DM price variance DM efficiency variance DL price variance Debit. Throughout the year, actual purchase costs for DM totaled $233,250; transfers of DM cost into production totaled $234,200. The total flexible budget DL cost was $188,500 this year. DL efficiency variance $10,300 530 Identify whether each total variance above is favorable or unfavorable. The variances with 15,350 Credit How did you determine this status? $5,290 ✓balances are unfavorable, and the variances with a ✓balances are favorable. Assume the company's threshold for determining the materiality of each variance is 5% of its flexible budget cost. Calculate the significance level of each DM variance in comparison to the DM flexible budget cost. Calculate the significance level of each DL variance in comparison to the DL flexible budget cost. Compare each variance's significance level to the company's threshold of 5%. Which of these variances (if any) are concerning (i.e., material) to the company? (Round answers to 2 decimal places, e.g. 15.25%.) DM price variance DM efficiency variance DL price variance DL efficiency variance % % % % < v
Expert Answer:
Related Book For
Posted Date:
Students also viewed these accounting questions
-
The trial balance for the Metro School District Repair Shop at January 1, 20X6, was as follows: The Repair Shop Fund had the following transactions during 20X6: 1. Materials purchased on account,...
-
The trial balance for Hanna Resort Limited on August 31 is as follows: Additional information: 1. The balance in Prepaid Rent includes payment of the final month's rent and rent for August 2014. 2....
-
The trial balance for Treasure Hunt Exploration Company, Inc. does not balance. The following errors were detected: a. The cash balance is overstated by $5,000. b. Rent expense of $340 was...
-
ABC Company acquired 60,000 shares of DEF Incorporated's 200,000 ordinary shares on January 2, 2019 for P 4,000,000 when the net assets of DEF Incorporated was P 12,000,000. The excess of acquisition...
-
The Striped Chocolate Division of the International Confection Company had a rate of return on investment (ROI) of 12 percent ( $1,200,000/$10,000,000) during Year 7, based on sales of $20,000,000....
-
If everyone was knowledgeable about price discrimination, would it drastically change the stock market?
-
The flowrate in the clay-lined channel \((n=0.025)\) shown in Fig. P10.54 is to be \(300 \mathrm{ft}^{3} / \mathrm{s}\). To prevent erosion of the sides, the velocity must not exceed \(5 \mathrm{ft}...
-
1. Are any vendors used that are not approved vendors? If so, list the vendor names and the employees who used these vendors. What follow-up steps should be taken on these vendors? 2. Were any...
-
Financial markets are not responsible for government over-borrowing, any more than your bank forces you to take out a car loan unless you want to. It is nevertheless true that investment banks will...
-
1. What is the cost of debt for Sunrise Bakery? 2. What is their cost of equity? 3. What is the WACC? 4. Which cost of capital should be used to evaluate the feasibility of the oven purchase? 5....
-
Consider a new chain of shoe stores. The marketing department of the corporation would like to know the customers and their preferences. What questions would you ask before developing an IS for data...
-
Imagine that your company is about to adopt new technology (e-g., new software, new laptops, mobile phones, etc.). Inform the employees and discuss the benefits of the new tool in a memo. Explain how...
-
How Would a long-term payment have been more beneficial for the company due to the low interest rate?
-
pre tax cost weight bonds 0.02 0.1 notes 0.04 0.15 ext equity 0.13 0.25 int equity 0.11 0.3 preferred 0.08 0.2 what is the WACC using all elemtns if the corporate tax rate is 40%
-
Sara's Clothes is a small yet successful retail chain that sells women's clothing and accessories with a focus on buyers who have relatively modest means. For this specific purpose, the firm has...
-
Suppose utility = In(C) + In(C), where C = (C) (C) for t = 1,2. Suppose there is no initial wealth (B = 0) and the real interest rate is 1 = 0. = 25, Q = 15, Q = 20. Suppose endowments are Q = 25, Q...
-
Calculate the payback period of an investment. David would like to invest in a project that required $100,000. He will get yearly savings of $20,000.
-
Refer to Exercise 8.S.I. Construct a scatterplot of the data. Does the appearance of the scatterplot indicate that the pairing was effective? Explain. Exercise 8.S.I. A volunteer working at an animal...
-
Distinguish between an expense and an expenditure.
-
Prather Company owns 80% of the common stock of Stone Company. The stock was purchased for $960,000 on January 1, 2009, when Stone Company's retained earnings were $675,000. On January 1, 2011, Stone...
-
The trial balance for the General Fund of the City of Fairfield as of December 31, 2012, is presented here: Transactions for the year ended December 31, 2013, are summarized as follows: 1. The City...
-
A manager has been using a certain technique to forecast demand for project man- agement software at her store. Actual demand and her corresponding predictions are shown below: a. What was the...
-
DRIVE WIND Driver's Donuts is a bakery and coffee shop that depends on morning com- muters for 80% of its daily business. During the morning rush from 5:30 a.m. to 8:30 a.m., an average of 35 cars...
-
Why aren't the effective capacity and the optimal operating level of any operation necessarily the same amount of activity?
Study smarter with the SolutionInn App