What would be effect of the decrease in raw material price

Assignment Help Managerial Accounting
Reference no: EM132632534

Problem 1: During the month of July, SETCO experienced a sharp, unexpected decline in the cost of one of its direct materials. The firm significantly increase its level of production because it was able to lower its selling price and sell more products. If SETCO uses a standard cost system properly, what would be the effect of the decrease in raw material price and the increase in the level of production on SETCO's material variances?

Material Price Variance                 Material Quantity Variance

A. Favorable                                      Unaffected

B. Favorable                                       Favorable

C. Favorable                                        Unfavorable

D. Unfavorable                                        Unfavorable

Reference no: EM132632534

Questions Cloud

What are inventory methods : What are Inventory methods? What are the details on the mechanics used for each of the 4 methods, and their actual advantages and disadvantages
Maximum bending moment : Maximum bending moment in the simply supported been as shown in figure is ____
What is the net investment-shunt technology : Shunt Technology will spend $550,000 on a piece of equipment that will manufacture fine wire for the electronics industries.
What percentage of salary should you save : What percentage of your salary should you save if you want to have exactly your university expenses amount?
What would be effect of the decrease in raw material price : What would be the effect of the decrease in raw material price and the increase in the level of production on SETCO's material variances?
What is Aggie accumulated E-P at the beginning of next year : Aggie had $45,000 of accumulated E&P at the beginning of the year and reported $120,000 of current E&P at year-end. What is Aggie's accumulated E&P
Current shares outstanding for calculation : Why use average shares outstanding rather than current shares outstanding for calculation of market value equity
What sampling is often used in marketing research because : Firms with high business risk, firms with a low degree of business risk, such as electric utilities, are more likely to have a capital structure with more
Find the the interface temperature : Denote the respective thermal conductivities. Using the data as given in the figure, the interface temperature T2 (in °C) is

Reviews

Write a Review

Managerial Accounting Questions & Answers

  Is consultative budgeting an approach to budget setting

Consultative budgeting is an approach to budget setting that uses a joint decision making process in which all parties agree True/false?

  Cost of capital-net present value

Leakam Company's product engineering department has developed a new product that has a 3-year life cycle. Production of the product requires development

  Write short notes on variance analysis

Write short notes on (any two) (i) Variance analysis. (ii) Inflation accounting. (iii) Trend analysis.

  What difference is recorded in the statement of financial

Statement of financial performance under the accrual accounting approach, the difference is recorded in the statement of financial position as

  What is the total amount of manufacturing overhead cost

If 12,500 units are produced, what is the total amount of manufacturing overhead cost incurred to support this level of production?

  What will likely happen as a result to the firms profit

What will likely happen as a result to the firms profit in the overall industry over succeeding year or two? Explain in a paragraph.

  Prepare the schedule of cost of goods sold for Nani Fashions

Prepare the schedule of cost of goods sold for Nani's Fashions and explain the information provided by the schedule of cost of goods sold

  What would a memo have in to a board of trustees proposing

What would a memo have in it to a Board of Trustees proposing to analyze such a decision. Include how you might go about obtaining the relevant cost information

  What bravo transfer price to alpha will be

Reduce its variable cost on internal transfers by $4. Given this data, if sales to outsiders will not be affected, Bravo's transfer price to Alpha will be

  How many units must be sold to earn income

Variable cost is $6, and total fixed costs are $52000, how many units must be sold to earn income of $35000? Oriole, Inc. has a tax rate of 30%.

  Explain an increase or decrease in gross profit margin

Explain an increase or decrease in gross profit margin. As well as, explain how a company could have a decreasing gross profit margin

  Calculate companys predetermined overhead application rate

Calculate the companys predetermined overhead application rate - Calculate the over-applied or under-applied overhead at year-end

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd