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Question Description Critique the analysis provided by the analysts. If there are errors, highlight which variances are in error and provide the corrected analysis. The

Question Description Critique the analysis provided by the analysts. If there are errors, highlight which variances are in error and provide the corrected analysis. The analysis shows that other than material spending variance for both deluxe and ultimate and material activity variance for ultimate, all other variances have errors. In the case of Deluxes material efficiency variance is valued at $1020 and here the standard price is $52020 which is higher than the flexible spending of $51000 which shows that the Deluxes material efficiency variance is unfavourable. In the case of Ultimates material efficiency variance, the Actual input and Standard inputs are the same. So, the difference between standard and flexible is zero, which shows that variance is favourable. In the case of Deluxes material activity variance, the flexible price $51000 is higher than the static price $45000 and the difference is $7000. It shows that the material activity variance for Deluxe is unfavourable. Whereas the value of Ultimates material activity variance is correct Deluxes labour spending is valued at $3612.5. the actual spending is $46963 which is lower compared to the standard price of $50575 which shows that the labour spending variance for Deluxe is favourable. In the case of Ultimate, the labour spending is valued at $252, the actual spending is 8823 which is lower than the Standard spending of $9075. This shows that the labour spending variance is favourable for Ultimate The Deluxes labour efficiency variance is valued at $38675. The standard price is $50575 which is higher than flexible price whose value is $11900 which shows that the labour efficiency variance for Deluxe is unfavourable. In the case of Ultimate, the labour efficiency variance is valued at 825. The Standard price is $9075 which is lower than the flexible price which is valued at $9900 which shows that the labour efficiency variance for Ultimate is favourable. The deluxes labour activity variance is valued at $1400. The flexible price is valued at $11900 which is higher than static price valued at $10500. This shows that the labour activity variance for deluxe is unfavourable. In the case of ultimate, the labour activity variance is valued at $450. The flexible price is valued at $9900 which is higher than static price valued at $9450 which shows that labour activity variance for Ultimate is unfavourable PROMPT Part 2 Assume that Peripheral's policy is to investigate variances that are $2,000 or 5% of the master (i.e., static) budget (whichever threshold is lower). Which variances would you investigate? Note: Please use your corrected analysis from Part 1 to address this question. If the static is $2000 or 5%, I have to investigate the material activity variances and labour activity variances of both Deluxe and Ultimate PROMPT Part 3 Identify the two largest cost variances. Identify at least two potential explanations for each of the two variances you identified. Note: Please use your corrected analysis from Part 1 to address this question. The material activity variance of Deluxe is valued at $49000 and is unfavourable after correction whereas in case of Ultimate it is 80500 and is unfavourable. The labour activity variance for Deluxe is valued at 9900 and is unfavourable whereas the Ultimates labour activity variance is unfavourable at 7900. In all of these cases, the variance is unfavourable because the static value is $2000 which is less than flexible price.

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