Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

2. Transaction Analysis

Journal Entries: Debits and Credits

Financial Accounting

2. Transaction Analysis

Journal Entries: Debits and Credits

Previous problemNext problem

Struggling with Financial Accounting?

Join thousands of students who trust us to help them ace their exams!Watch the first video

Multiple Choice

In the context of journal entries for standard costing, which variance is calculated using the formula: (actual cost per unit - standard cost per unit) \( \times \) actual quantity?

Materials Price Variance

Labor Rate Variance

Overhead Volume Variance

Materials Quantity Variance

Previous problemNext problem

Verified step by step guidance

Understand the concept of variances in standard costing: Variances are used to measure the difference between actual costs and standard costs, helping businesses identify areas of inefficiency or cost control issues.

Identify the formula provided in the problem: The formula is (actual cost per unit - standard cost per unit) × actual quantity. This formula calculates the difference in cost per unit and multiplies it by the actual quantity used.

Match the formula to the correct variance type: The formula specifically focuses on the cost per unit difference, which is related to the price paid for materials or labor. This indicates it is a price-related variance.

Eliminate incorrect options: Overhead Volume Variance and Materials Quantity Variance are not price-related variances. Overhead Volume Variance deals with fixed overhead costs and production levels, while Materials Quantity Variance focuses on the quantity of materials used rather than their price.

Conclude that the correct variance type is Materials Price Variance: This variance measures the difference between the actual price paid for materials and the standard price, multiplied by the actual quantity of materials used.