ycconuubou25.SA (LO 4) Optimus Company manufactures a variety of tools and industrial equipment. The com-any operates through three divisions. Each division is an investment center. Operating data for theome Division for the year ended December 31, 2020, and relevant budget data are as follows.DobActualComparison with Budget$1,400,000665,000125,000170,000$100,000 favorable45,000 unfavorable25,000 unfavorableOn targetSalesVariable cost of goods soldVariable selling and administrative expensesControllable fixed cost of goods soldControllable fixed selling and administrativeOn targetexpensesAverage operating assets for the year for the Home Division were $2,000,000 which was also the bud-geted amount.Instructionsa. Prepare a responsibility report (in thousands of dollars) for the Home Division.b. Evaluate the manager's performance. Which items will likely be investigated by top management?c. Compute the expected ROI in 2020 for the Home Division, assuming the following independentchanges to actual data.1. Variable cost of goods sold is decreased by 5%.2. Average operating assets are decreased by 10%.3. Sales are increased by $200,000, and this increase is expected to increase contribution marginby $80,000.P25.6A (LO 3) Durham Company uses a responsibility reporting system. It has divisions in DenveSeatle, and San Diego. Each division has three production departments: Cutting, Shaping, and Finis!ing The responsibility for each department rests with a manager who reports to the division producticmanager. Each division manager reports to the vice president of production. There are also vice predents for marketing and finance. All vice presidents report to the president.In January 2020, controllable actual and budget manufacturing overheadments and divisions were as shown below

ROI (return on investment) - Return on investment can be defined as the ratio between net income…

$100,000 favorable 45,000 unfavorable 25,000 unfavorable On target $1,400,000 665,000 Sales Variable cost of goods sold Variable selling and administrative expenses Controllable fixed cost of goods sold Controllable fixed selling and administrative 125,000 170,000 expenses 80,000 On target 00 O uoroge onerating assets for the year for the Home Division were $2,000,000 which was also the bud-

$100,000 favorable 45,000 unfavorable 25,000 unfavorable On target $1,400,000 665,000 Sales Variable cost of goods sold Variable selling and administrative expenses Controllable fixed cost of goods sold Controllable fixed selling and administrative 125,000 170,000 expenses 80,000 On target 00 O uoroge onerating assets for the year for the Home Division were $2,000,000 which was also the bud-

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Jheng Company has the following revenue and cost budgets for the two products it sells: Plastic GlassFrames Frames Sales Price P10.00 P15.00Direct Materials 2.00 3.00Direct Labor 3.00 5.00 Fixed Overhead 3.00 4.00Net Income per unit P2.00 P3.00Budgeted Unit Sales 100,000 300,000 The budgeted unit sales equal the current unit demand, and total fixed overhead for the year is budgetedatP975,000. Assume that the company plans to maintain the same proportional mix. In numerical calculations,Jheng rounds to the nearest centavos and unit. 1. The total number of units Jheng needs to produce and sell to break even is: a. 150,000 units c. 177,273 units b. 354,545 units d. 300,000 units2. The total number of units needed to break even if the budgeted direct labor costs are P2 for plastic frames instead of P3 isa. 154,028 units c. 156,000 unitsb. 144,444 units d. 146,177 units3. Net income computed using variable costing would exceed net income computed using absorption costing if: a. Units sold…
Carica Company is a manufacturer with two production departments (Machining and Assembly) as well as two support departments (Materials Requisitions and Utility Services). For the last quarter of 2020, Carica’s cost records indicate the following: SUPPORT PRODUCTION Materials Utility Requisitions Services Machining Assembly Total (MR) (US) Budgeted costs before any inter- $200,000 $1,000,000 5,456,000 $7,458,000 $14,114,000 department cost allocations Support work supplied by MR 0% 25%…
Q49 Arrow, Incorporated, manufactures two products that it sells to the same market. Excerpted below are its budgeted and actual operating results for the year just completed: Budget Actual Unit sales Product X 21,500 40,000 Product Y 89,000 79,000 Unit contribution margin Product X $ 6.00 $ 3.90 Product Y $ 13.00 $ 14.00 Unit selling price Product X $ 13.00 $ 14.00 Product Y $ 30.00 $ 29.00 Industry volume was estimated to be 1,865,000 units at the time the budget was prepared. Actual industry volume for the period was 2,400,000 units. Arrow measures variances using contribution margin. The weighted-average budgeted contribution margin per unit is: Multiple Choice $10.43. $11.64. $12.23. $9.12. $9.17.
Bonita Company manufactures a variety of tools and industrial equipment. The company operates through three divisions. Each division is an investment center. Operating data for the Home Division for the year ended December 31, 2020, and relevant budget data are as follows. Actual Comparison with Budget Sales $1,399,000 $101,000 favorable Variable cost of goods sold 680,000 55,000 unfavorable Variable selling and administrative expenses 124,000 25,000 unfavorable Controllable fixed cost of goods sold 171,000 On target Controllable fixed selling and administrative expenses 81,000 On target Average operating assets for the year for the Home Division were $2,000,000 which was also the budgeted amount. (a) Prepare a responsibility report for the Home Division. (List variable costs before fixed costs. Round ROI to 2 decimal places, e.g. 1.57%.) BONITA COMPANYHome DivisionResponsibility ReportFor the Year Ended…
Bonita Company manufactures a variety of tools and industrial equipment. The company operates through three divisions. Each division is an investment center. Operating data for the Home Division for the year ended December 31, 2020, and relevant budget data are as follows. Actual Comparison with Budget Sales $1,399,000 $101,000 favorable Variable cost of goods sold 680,000 55,000 unfavorable Variable selling and administrative expenses 124,000 25,000 unfavorable Controllable fixed cost of goods sold 171,000 On target Controllable fixed selling and administrative expenses 81,000 On target Average operating assets for the year for the Home Division were $2,000,000 which was also the budgeted amount. Compute the expected ROI in 2020 for the Home Division, assuming the following independent changes to actual data. (Round ROI to 2 decimal places, e.g. 1.57%.) The expected ROI (1) Variable cost of goods sold is…
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Prairie Electronics, located in Regina, manufactures three product lines: (1) high-end speakers, (2) personal computers, and (3) handheld devices. For 2020, it compiled the following budgeted data: High-end Speakers Personal Computers Handheld Devices Total Sales (in units) 370,000 580,000 470,000 Price (per unit) $ 1,800 $ 1,280 $ 405 Variable costs per unit: Direct materials $ 430 $ 450 $ 20 Direct labour 130 150 20 Overhead 90 140 15 Shipping 70 90 2 Sales commissions 80 100 4 Direct fixed costs: Salaries$68,330,000 $25,860,000 $46,530,000 Utilities 45,790,000 39,390,000 24,430,000 Depreciation 65,490,000 91,590,000 34,900,000 Common fixed costs: Corporate salaries $38,590,000Building depreciation 72,190,000Legal & accounting 47,740,000Other 13,080,000 Required: 1. & 2. Prepare a segmented performance report; Compute the contribution margin percentage and segment margin percentage. 3-a. Allocate the common fixed…
1. Zelmer Company manufactures tablecloths. Sales have grown rapidly over the past 2 years. As a result, the president has installed a budgetary control system for 2020. The following data were used in developing the master manufacturing overhead budget for the Ironing Department, which is based on an activity index of direct labor hours. Variable costs Rate per direct labor hour Annual fixed costs Indirect labor $ 0.42 Supervision $ 42600 Indirect material $ 0.50 depreciation $ 17280 Factory utilities $ 0.33 insurance $ 14640 Factory repairs $ 0.23 rent $ 30600 The master overhead budget was prepared on the expectation that 481,600 direct labor hours will be worked during the year. In June, 38,400 direct labor hours were worked. At that level of activity, actual costs were as shown below. Variable—per direct labor hour: indirect labor $0.46, indirect materials $0.48, factory utilities $0.37, and…
ABX Company plans to produce 50,000 units of Peace Products in 2023. Budgeted variable manufacturing costs per unit are direct materials P7, direct labor P12, and overhead P18. Annual budgeted fixed manufacturing overhead costs are P96,000 for depreciation and P45,000 for supervision. In February, Shalom produced 6,000 units and incurred the following costs: direct materials P38,900, direct labor P70,200, variable overhead P116,500, depreciation P8,000, and supervision P4,000. Need solution Direct materials: ANS: 3,100 F Total fixed manufacturing overhead: ___ How much was the total variable manufacturing cost? ANS: 222,000
Rahapuka Ltd is a manufacturing company which manufacturers and assembles car components. The following budgeted information relates to Rahapuka Ltd for the forth coming period. Products A1 B2 C3 '000 '000 '000 Sales and production (units) 50 40 30 N$ N$ N$ Selling price (per unit) 45 95 73 Prime costs (per unit) 32 84 65 Hours Hours Hours Machine department (machine hours per unit) 2 5 4 Assembly department (direct labour hours per unit) 7 3 2 Overheads can be re-analysed into 'cost pools' as follows; cost pool N$ '000 Cost driver Quantity for the period Machining services 357 Machine hours 420.000 Assembly services 318 Direct labour hours 530.000 Set up costs 26 Set ups 520 Order processing 158 Customer orders 32.000 Purchasing 84 Suppliers' orders 11.200 You have also been provided with the following estimates for the period A1 B2 C3 Number of set ups 120 200 200 Customer orders 8000 8000 16000 Suppliers' orders 3000 4000 4200…
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