Question: Kelton Corp. has calculated its direct materials price and quantity variances to be $500 favorable and $800 unfavorable, respectively. Keltons production manager believes that these

Kelton Corp. has calculated its direct materials price and quantity variances to be $500 favorable and $800 unfavorable, respectively. Kelton’s production manager believes that these variances indicate that the purchasing department is doing a good job but production is doing a poor job.
Explain whether the production manager’s conclusions are correct.

Step by Step Solution

★★★★★

3.31 Rating (160 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

Theres no way to know whether or not the manager is correct withou... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

407-B-M-A-S-C (1329).docx

120 KBs Word File

Students Have Also Explored These Related Managerial Accounting Questions!

Explain the possible causes for direct materials price and direct materials usage variances. Who in the organization normally has influence over or responsibility for these variances?

The Purchasing Department is required to use the following paperwork procedure for each purchase order (PO) related to a company production order. The purchase order is the legal document used by the...

Why are separate price and quantity variances computed?

Phantom Corp. has calculated its direct materials price and quantity variances to be $$500$ favorable and $$800$ unfavorable, respectively. Phantoms production manager believes that these...

[The following information applies to the questions displayed below.] Preble Company manufactures one product. Its variable manufacturing overhead is applied to production based on direct labor-hours...

question 9 please Required: 1. Compute the following variances for May: a. Materials price and quantity variances. b. Labor rate and efficiency variances. c. Variable overhead rate and efficiency...

I have three accounting questions that i need completed. I have attached the questions, Thank you so much! Looking forward to hearing back from you. The auto repair shop of Quality Motor Company uses...

Materials Price and Quantity Variances Companies compare the actual cost with the standard cost. Two basic ways the actual cost of direct materials can deviate from standard cost is: (1) through...

ch10 question 1 question 2 req1 req2 req3 Quiz - Ch 10 Help Save & Exit Submit Check my work 1 Marvel Parts, Inc, manufactures auto accessories. One of the company's products is a set of seat covers...

All same question. Thank you! Miller Toy Company manufactures a plastic swimming pool at its Westwood Plant. The plant has been experiencing problems as shown by its June contribution format income...

Which type of organizational form fosters teamwork in the best manner?

Conduct each test at the = 0.05 level of signicance by determining (a) The null and alternative hypotheses, (b) The test statistic, (c) The critical value, and (d) The P-value. Assume that the...

Ortiz, Incorporated, is cureertly valued at $ 1 4 5 , 7 0 0 in a boom and $ 7 5 , 2 0 0 in a recession. The chance of either economic state occurring is 5 0 percent. the firm owes $ 8 5 , 0 0 0 to...

Executives at Toyota, among many other Japanese companies, emphasize that clean work areas in the factory enhance productivity. What might explain this relationship between cleanliness and...

Assume that two companies in the same industry have equal earnings. Why might these companies have different price-earnings ratios? If a company has a price-earnings ratio of 20 and reports earnings...

Remaining Time: 54 minutes, 37 seconds Question Completion Status: 1 13 15 15 17 18 19 Question 13 Excom Fiberopties estimates that the net operating income increases from $787,350 to $986,330 when...

Refer to the Best Actor/Actress data set provided on theData Sets page....

Calculate the expected return, variance, and standard deviations for investments in stock A, stock B, and an equally weighted portfolio of both. Scenario Probability Return on A Return on B Recession...