$8.35 During the current month, the following levels of activities were incurred Car Seats $ 51,060 Direct Labor Costs Direct Labor Hours Machine Hours: Production Runs Units Produced 4,440 5,550 40 1,300 Strollers $ 87,400 7,600 8,400 66 3,200 Baby Swings $ 30,130 2,620 3,600 44 1,010 Total $ 168,590 14,660 17,550 150 5,510 What are the total manufacturing overhead costs allocated to the Baby Swings for the current month? (Do not round intermediate calculations. Round your answer to the nearest dollar.)
Q: Bierce Corporation has two manufacturing departments--Machining and Finishing. The company used the…
A: “Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…
Q: Before preparing financial statements for the current year, the chief accountant for Crane Ltd.…
A: when transaction is recorded wrongly in account, it needs to be corrected when it is found. 1.…
Q: Colada Quest Games Inc. adjusts its accounts annually. The following information is available for…
A: Prepaid expense: It is an expense which is paid in advance. It is an asset for the entity. Unearned…
Q: Low Heel Trading's financial year ends on 30 June. The owner of the business, Nancy, provided the…
A: The journal entries are prepared to record the day-to-day transactions of the business on regular…
Q: Simplified approaches for preparing pro forma statements assume that the firm’s past financial…
A: External auditors are businesses or people that are professionally trained and engaged in the job to…
Q: In line with your audit with DAVE, Inc. financial statements, the company accountantpresented to you…
A: All the accrued income and expenses and deferred income and expenses are adjusted in net income…
Q: Sunny Company paid 4,000,000 for property containing natural resources of 2,500,000 tons of ore. The…
A: Natural resources are gifts of nature without which survival is impossible. In order to fulfill the…
Q: Bridgeport Corporation was organized on January 1, 2022. It is authorized to issue 15,000 shares of…
A: A ledger is a log or list of accounts that keep track of account transfers.
Q: Please explain how the long-term and short-term classification of assets and liabilities is…
A: Assets :— An asset is any resource owned or controlled by a business or an economic entity.…
Q: On December 31, 2020, Parent company (A) acquired 80% of Subsidiary (B) outstanding common stocks…
A: Journal entry: The first step in accounting is a journal entry, which is used to record a business…
Q: 1 million bond issue is outstanding. assume deposits earn 8 percent per annum. calculate the amount…
A: Given in the question: Amount 1000000 Interest Rate 8% Time (in Years) 20…
Q: The auditor of Cubs obtained the following client-prepared bank reconciliation (See Image) The…
A: Potential Issues in Bank Reconciliation To find any discrepancies in the day-to-day transactions,…
Q: Pretend that you are saving up for a down payment on a car or house. Pretend that we get an…
A: A savings account seems to be an account that is opened by a salaried person. It is a very basic…
Q: 7. When may a company include interest costs as part of the cost of the asset? A. When they buy a…
A: Lets understand the basics. As per IAS 23 "Borrowing costs", borrowing cost incurred to acquisition,…
Q: Requirements 1. Make the adjusting entry to accrue interest expense at 31 December 2015. Date the…
A: Interest Expenses :— Interest Expenses is Revenue expenditure in nature. Expenses which is paid on…
Q: Which of the following conditions would not indicate that two business segments should be classified…
A: Operating segments are the business components of an entity which earns revenue and incur expenses.…
Q: 9) Due to the pandemic, a Canadian sports clothing store reported large losses during 2020. The…
A: Lets understand all the options briefly. Going concern assumption is a accounting principle which…
Q: 6. What is the ROI related to this year’s investment opportunity? (Do not round intermediate…
A: Return of investment (ROI) stands for the Income, as a percentage of the Investment, that a Business…
Q: On March 17, Advanced Technologies purchased a patent related to laser surgery techniques. The…
A: Introduction Advanced Technologies: A technology that is either technically developed but has just a…
Q: Mercury Drug purchased a Laboratory equipment for P 100,000 and plans to keep it for 15 years. If…
A: Depreciation is the allocation of cost of asset over the useful life of the asset. Several methods…
Q: The table below shows transactions from Mr. Situmbeko's busin for the year ended 31st December,…
A: Trading and Profit and Loss account will give us the Net profit Earned by the Business for a…
Q: Note: answer it " all " correctly. Justify your answer by showing solution of your choice If not I…
A: Comment - We’ll answer the first question since the exact one wasn’t specified. Please submit a new…
Q: Mountain Sports, Inc., is a retailer that has engaged you to assist in the preparation of its…
A: Financial statements are those statements which are prepared at the end of accounting period for the…
Q: thilaire Corporation is working on its direct labor budget for the next two months. Each unit of…
A: Answer : Total Direct Labor Cost = Direct Labor cost per hour * Total direct labor hours paid
Q: Sanchez Trucking has been experiencing delays at its warehouse operations. Management hired a…
A: 1. total hours per crew = no of members in a crew x full time hours per member 2. required crews =…
Q: On June 7, 2006, Hawk Corporation sold a tract of land for P70,000 that resulted in a P30,000 gain…
A: The gain arises when the selling price is greater than the purchase price of the asset. The revenue…
Q: Intra-Spect Mining Co. acquired mineral rights for $70,000,000. The mineral deposit is estimated at…
A: a. Depletion rate = $70,000,000 / 50,000,000 = $1.40 per ton b. Amount of depletion expense for the…
Q: A company imported a new manufacturing machine for their plant, paying P 850,000 to the…
A:
Q: What should Michelle’s negotiation strategy be (e.g., how much information should she share…
A: Pricing Strategy :— Business Used Various Type of Pricing Strategy to Selling their Goods and…
Q: PRESENT YOUR ANSWER AS: (10) IF FAVORABLE OR 10 IFUNFAVORABLE. The Standard manufacturing…
A: Variable overheads are those indirect costs incurred in the production and manufacturing, which…
Q: Determine the amounts of the components of pension expense that should be recognized by the company…
A: Pension :— Money that is paid regularly by a government or companies to some body who has stopped…
Q: Brian Ltd is a company in the chemical industry, situated near the Murray River. Its year end is…
A:
Q: Question 2: Pedagogy Inc. is an e-book reader manufacturer. The company's ABC system has the…
A: Total cost of production = Direct materials + direct labor + manufacturing cost Unit product cost =…
Q: Required: a) Open the accounts b) Records all accounting operation c) Prepare closing balance sheet
A: Accounting transactions or events dealt with in monetary aspect are recorded in books of accounts.…
Q: Pepper Corporation owns 90% of the outstanding voting stock of Salt Company and Nike Corporation…
A: Financial statements are those which an entity prepares to indicate its financial health. The income…
Q: If interest rates are rising, which of the following bonds would you would want to hold? (Ignore…
A: In the context of the given question, we are required to select the correct option from the given…
Q: QUESTION 3 The following year-end totals were taken from the records of Langston Company.…
A: Cash Outflow - Cash Outflow is the amount going out of the organization. It shows in the negative…
Q: Simple Accounting - CPV. The unit price for towel is $18.59 and the variable cost is $7.11. If the…
A: Introduction: The contribution margin could be expressed in both gross and per unit terms. After…
Q: 2............ 3............. 4............. 5............ (b) autred 80,000 90,000 80,000 20,000…
A: A capital budget is a tool for evaluating two or more projects. The tool helps business owners…
Q: Trader Investments completed the following investment transactions during 2024: i(Click the icon to…
A: When stocks are purchased then Investment is debited and cash is credited to record the investment…
Q: Which of the following should be presented in the statement of changes in equity? A. Distributions…
A: The financial statements of the business include the income statement, balance sheet and statement…
Q: a. Journalize the entry to record the issuance of the installment notes. If an amount box does not…
A: The journal entries are prepared to record the day-to-day transactions of the business on regular…
Q: The expected average rate of return for a proposed investment of $786,000 in a fixed asset, with a…
A: The answer is b. Average rate of return= Average profit per annum/ Net initial investment Where…
Q: Positivism Corporation paid $150,000 for an 30% interest in Science Tech Corporation on January 1,…
A: When a buyer buys some business and pays more money compared to the net asset value received. The…
Q: Describe the purpose of the five primary financial statements. Statement of Comprehensive Income…
A: Financial statements:— Financial statement are the written Records that convey the business…
Q: REQUIRED: Prepare the Statement of Comprehensive Income and the Statement of Financial Position as…
A: As per the format and sequence, ratio analysis is done when financial statements are prepared. The…
Q: Johnny Lee Incorporated produces a line of small gasoline-powered engines that can be used in a…
A: Flexible budget is the statement which is prepared to estimate the fixed and variable costs for…
Q: 8 Johnson Company acquires land and building for $4,000,000 including all fees related to…
A: Introduction: A cost known as a capitalized cost is an expense that raises a fixed asset's cost…
Q: The equity sections for Atticus Group at the beginning of the year (January 1) and end of the year…
A: Dividend is the part or share of profits which is being distributed or paid to the shareholders of…
Q: Cane Company manufactures two products called Alpha and Beta that sell for $155 and $115,…
A: Introduction:- Costs are classified into variable or fixed. Variable costs are vary in respect of…
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
Step by step
Solved in 3 steps
- JoyT Company manufactures Maxi Dolls for sale in toy stores. In planning for this year, JoyT estimated variable factory overhead of 600,000 and fixed factory overhead of 400,000. JoyT uses a standard costing system, and factory overhead is allocated to units produced using standard direct labor hours. The level of activity budgeted for this year was 10,000 direct labor hours, and JoyT used 10,300 actual direct labor hours. Based on the output accomplished during this year, 9,900 standard direct labor hours should have been used. Actual variable factory overhead was 596,000, and actual fixed factory overhead was 410,000 for the year. Based on this information, the variable factory overhead controllable variance for JoyT for this year was: a. 24,000 unfavorable. b. 2,000 unfavorable. c. 4,000 favorable. d. 22,000 favorable.Young Company is beginning operations and is considering three alternatives to allocate manufacturing overhead to individual units produced. Young can use a plantwide rate, departmental rates, or activity-based costing. Young will produce many types of products in its single plant, and not all products will be processed through all departments. In which one of the following independent situations would reported net income for the first year be the same regardless of which overhead allocation method had been selected? a. All production costs approach those costs that were budgeted. b. The sales mix does not vary from the mix that was budgeted. c. All manufacturing overhead is a fixed cost. d. All ending inventory balances are zero.Handbrain Inc. is considering a change to activity-based product costing. The company produces two products, cell phones and tablet PCs, in a single production department. The production department is estimated to require 2,000 direct labor hours. The total indirect labor is budgeted to be 200,000. Time records from indirect labor employees revealed that they spent 30% of their time setting up production runs and 70% of their time supporting actual production. The following information about cell phones and tablet PCs was determined from the corporate records: a. Determine the indirect labor cost per unit allocated to cell phones and tablet PCs under a single plantwide factory overhead rate system using the direct labor hours as the allocation base. b. Determine the budgeted activity costs and activity rates for the indirect labor under activity-based costing. Assume two activitiesone for setup and the other for production support. c. Determine the activity cost per unit for indirect labor allocated to each product under activity-based costing. d. Why are the per-unit allocated costs in (a) different from the per-unit activity cost assigned to the products in (c)?
- Adam Corporation manufactures computer tables and has the following budgeted indirect manufacturing cost information for the next year: If Adam uses the step-down (sequential) method, beginning with the Maintenance Department, to allocate support department costs to production departments, the total overhead (rounded to the nearest dollar) for the Machining Department to allocate to its products would be: a. 407,500. b. 422,750. c. 442,053. d. 445,000.Evans, Inc., has a unit-based costing system. Evanss Miami plant produces 10 different electronic products. The demand for each product is about the same. Although they differ in complexity, each product uses about the same labor time and materials. The plant has used direct labor hours for years to assign overhead to products. To help design engineers understand the assumed cost relationships, the Cost Accounting Department developed the following cost equation. (The equation describes the relationship between total manufacturing costs and direct labor hours; the equation is supported by a coefficient of determination of 60 percent.) Y=5,000,000+30X,whereX=directlaborhours The variable rate of 30 is broken down as follows: Because of competitive pressures, product engineering was given the charge to redesign products to reduce the total cost of manufacturing. Using the above cost relationships, product engineering adopted the strategy of redesigning to reduce direct labor content. As each design was completed, an engineering change order was cut, triggering a series of events such as design approval, vendor selection, bill of materials update, redrawing of schematic, test runs, changes in setup procedures, development of new inspection procedures, and so on. After one year of design changes, the normal volume of direct labor was reduced from 250,000 hours to 200,000 hours, with the same number of products being produced. Although each product differs in its labor content, the redesign efforts reduced the labor content for all products. On average, the labor content per unit of product dropped from 1.25 hours per unit to one hour per unit. Fixed overhead, however, increased from 5,000,000 to 6,600,000 per year. Suppose that a consultant was hired to explain the increase in fixed overhead costs. The consultants study revealed that the 30 per hour rate captured the unit-level variable costs; however, the cost behavior of other activities was quite different. For example, setting up equipment is a step-fixed cost, where each step is 2,000 setup hours, costing 90,000. The study also revealed that the cost of receiving goods is a function of the number of different components. This activity has a variable cost of 2,000 per component type and a fixed cost that follows a step-cost pattern. The step is defined by 20 components with a cost of 50,000 per step. Assume also that the consultant indicated that the design adopted by the engineers increased the demand for setups from 20,000 setup hours to 40,000 setup hours and the number of different components from 100 to 250. The demand for other non-unit-level activities remained unchanged. The consultant also recommended that management take a look at a rejected design for its products. This rejected design increased direct labor content from 250,000 hours to 260,000 hours, decreased the demand for setups from 20,000 hours to 10,000 hours, and decreased the demand for purchasing from 100 component types to 75 component types, while the demand for all other activities remained unchanged. Required: 1. Using normal volume, compute the manufacturing cost per labor hour before the year of design changes. What is the cost per unit of an average product? 2. Using normal volume after the one year of design changes, compute the manufacturing cost per hour. What is the cost per unit of an average product? 3. Before considering the consultants study, what do you think is the most likely explanation for the failure of the design changes to reduce manufacturing costs? Now use the information from the consultants study to explain the increase in the average cost per unit of product. What changes would you suggest to improve Evanss efforts to reduce costs? 4. Explain why the consultant recommended a second look at a rejected design. Provide computational support. What does this tell you about the strategic importance of cost management?A local picnic table manufacturer has budgeted these overhead costs: They are considering adapting ABC costing and have estimated the cost drivers for each pool as shown: Recent success has yielded an order for 1,000 tables. Assume direct labor costs per hour of $20. Determine how much the job would cost given the following activities:
- Douglas Davis, controller for Marston, Inc., prepared the following budget for manufacturing costs at two different levels of activity for 20X1: During 20X1, Marston worked a total of 80,000 direct labor hours, used 250,000 machine hours, made 32,000 moves, and performed 120 batch inspections. The following actual costs were incurred: Marston applies overhead using rates based on direct labor hours, machine hours, number of moves, and number of batches. The second level of activity (the right column in the preceding table) is the practical level of activity (the available activity for resources acquired in advance of usage) and is used to compute predetermined overhead pool rates. Required: 1. Prepare a performance report for Marstons manufacturing costs in the current year. 2. Assume that one of the products produced by Marston is budgeted to use 10,000 direct labor hours, 15,000 machine hours, and 500 moves and will be produced in five batches. A total of 10,000 units will be produced during the year. Calculate the budgeted unit manufacturing cost. 3. One of Marstons managers said the following: Budgeting at the activity level makes a lot of sense. It really helps us manage costs better. But the previous budget really needs to provide more detailed information. For example, I know that the moving materials activity involves the use of forklifts and operators, and this information is lost when only the total cost of the activity for various levels of output is reported. We have four forklifts, each capable of providing 10,000 moves per year. We lease these forklifts for five years, at 10,000 per year. Furthermore, for our two shifts, we need up to eight operators if we run all four forklifts. Each operator is paid a salary of 30,000 per year. Also, I know that fuel costs about 0.25 per move. Assuming that these are the only three items, expand the detail of the flexible budget for moving materials to reveal the cost of these three resource items for 20,000 moves and 40,000 moves, respectively. Based on these comments, explain how this additional information can help Marston better manage its costs. (Especially consider how activity-based budgeting may provide useful information for non-value-added activities.)Advent Software uses standards to manage the cost of the programming staff. There are two programmer levels, Level 1 and Level 2. Level 1 programmers normally work on the easier projects. Level 1 and Level 2 programmers are paid 25 and 35 per hour, respectively. It has been determined from experience that Level 2 programmers can complete 50 lines of code per hour. If a Level 1 programmer is assigned to a Level 2 task, the programming work will be slower than the Level 2 time standard, but will be accomplished at a lower labor rate. During a recent week, a Level 2 project was assigned to a Level 1 programmer. The programmer worked 40 hours and completed 1,400 lines of code. a. Determine the direct labor time variance for this worker. b. Determine the direct labor rate variance for this worker. c. Using the information in (a) and (b), is it more cost effective to use a Level 1 worker or a Level 2 worker on a Level 2 project?Box Springs. Inc., makes two sizes of box springs: queen and king. The direct material for the queen is $35 per unit and $55 is used in direct labor, while the direct material for the king is $55 per unit, and the labor cost is $70 per unit. Box Springs estimates it will make 4,300 queens and 3,000 kings in the next year. It estimates the overhead for each cost pool and cost driver activities as follows: How much does each unit cost to manufacture?
- Flaherty, Inc., has just completed its first year of operations. The unit costs on a normal costing basis are as follows: During the year, the company had the following activity: Actual fixed overhead was 12,000 less than budgeted fixed overhead. Budgeted variable overhead was 5,000 less than the actual variable overhead. The company used an expected actual activity level of 12,000 direct labor hours to compute the predetermined overhead rates. Any overhead variances are closed to Cost of Goods Sold. Required: 1. Compute the unit cost using (a) absorption costing and (b) variable costing. 2. Prepare an absorption-costing income statement. 3. Prepare a variable-costing income statement. 4. Reconcile the difference between the two income statements.A local picnic table manufacturer has budgeted the following overhead costs: They are considering adapting ABC costing and have estimated the cost drivers for each pool as shown: Recent success has yielded an order for 1,500 tables. Determine how much the job would cost given the following activities, and assuming an hourly rate for direct labor of $25 per hour:The controller for Muir Companys Salem plant is analyzing overhead in order to determine appropriate drivers for use in flexible budgeting. She decided to concentrate on the past 12 months since that time period was one in which there was little important change in technology, product lines, and so on. Data on overhead costs, number of machine hours, number of setups, and number of purchase orders are in the following table. Required: 1. Calculate an overhead rate based on machine hours using the total overhead cost and total machine hours. (Round the overhead rate to the nearest cent and predicted overhead to the nearest dollar.) Use this rate to predict overhead for each of the 12 months. 2. Run a regression equation using only machine hours as the independent variable. Prepare a flexible budget for overhead for the 12 months using the results of this regression equation. (Round the intercept and x-coefficient to the nearest cent and predicted overhead to the nearest dollar.) Is this flexible budget better than the budget in Requirement 1? Why or why not?