When are sales and cost variances favorable and unfavorable?

When are sales and cost variances favorable and unfavorable?

11. When would variable cost volume variances be expected to be unfavorable How should unfavorable variable cost volume variances be interpreted?

12. What is the primary benefit associated with using a standard cost system?

13. Wallis car wash, Inc…, expected to 2,000 cars during the month of august. Washing each car was expected to require 0.2 hours of labor. The company actually used 420 hours of labor to wash 1,880 cars. The labor usage variance was $704 unfavorable.

Required

A) Determine the standard labor price. B) If the actual labor rate is $14, indicate whether the labor price variance would be favorable (F) or unfavorable (U)

14. Strauss company established a predetermined variable overhead cost rate at $10.50 per direct labor. The actual variable overhead cost rate $9.60 per hour. The planned level of labor activity was 76,000 hours of labor. The company actually used 80,000 hour of labor.

Require A) Determine the total flexible budget variable overhead cost variance. B) Like many companies, Strauss has decided not to separate the total variable overhead cost variance into price and usage components. Explain why Strauss made this choice.

15. What is capital investment? How does if differ from in stocks or bonds? 16. What are three reasons that today then cash to be received in the future? 17. A dollar today is worth more than a dollar in the future.” The present value of a future dollar is worth less than one dollar.” Are these two statements synonymous? Explain.

18. Define the term return on investment. How is the return normally expressed? Give an example of a capital investment return?

19. Define the term annuity what is one example of an annuity receipt?

20. Does the net present value method provide a measure of the rate of return on capital investment?

21. Why are ratios and trends used in financial analysis?

22. What do the term liquidity and solvency mean?

23. What is apparent from a horizontal presentation of financial statement information? A vertical presentation?

24. What is the significance of inventory turnover, and how is it calculated?

25. What is the difference between the current ratio and the current ratio and the quick ratio? What does each measure?

26. Why are absolute amount of limited use when comparing companies?

27. What is the difference between return on equity?

28. Which ratios are used to measure long- term debt-paying ability? How is each calculated?

29. What are some limitations of the earnings per share figure?

30. What is the formula for calculating return on investment (ROI)?

31. What is information overload?

32. How do accounting principle affect financial statement analysis?