Question 2Gr8bean manufactures various coffee flavours which are sold in jars.The company has set the following standard costs to manufacture one jar of its premium flavour:Quantity / HoursPrice/RateStandard Cost750 grams??R50 per hour?R4DetailsDirect materialsDirect LabourVariable overheadsTOTAL STANDARD COST OF ONE BOXThe following cost information relates to August for the production of the 4 500 boxes:DetailsDirect materialsDirect LabourStandard cost for AugustActual cost for AugustDuring the month of August, 4 500 boxes were manufactured, and 5 000 kg of direct materialswere purchased whilst 3 800 kg were issued to production.REQUIRED:R67 500R80 000Q.2.3 Calculate the material quantity variance.???R135 000?R40VariableoverheadsR22 500R40 000

Material quantity variance is the deviation between the actual material used and the standard…

Answered: Gr8bean manufactures various coffee…

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter10: Standard Costing And Variance Analysis

Section: Chapter Questions

Problem 21BEA

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Genuine Spice Inc. began operations on January 1 of the current year. The company produces 8-ounce bottles of hand and body lotion called Eternal Beauty. The lotion is sold wholesale in 12-bottle cases for 100 per case. There is a selling commission of 20 per case. The January direct materials, direct labor, and factory overhead costs are as follows: DIRECT MATERIALS Cost Behavior Units per Case Cost per Unit Direct Materials Cost per Case Cream base Variable 100 ozs. 0.02 2.00 Natural oils Variable 30ozs. 0.30 9.00 Bottle (8-OZ-) Variable 12 bottles 0.50 6.00 17.00 DIRECT LABOR Department Cost Behavior Time per Case Labor Rate per Hour Direct Labor Cost per Case Mixing Variable 20 min. 18.00 6.00 Filling Variable 5 14.40 1.2 25 min. 7.20 FACTORY OVERHEAD Cost Behavior Total Cost Utilities Mixed 600 Facility lease Fixed 14,000 Equipment depreciation Fixed 4,300 Supplies Fixed 660 19,560 Part ABreak-Even Analysis The management of Genuine Spice Inc. wishes to determine the number of cases required to break even per month. The utilities cost, which is part of factory overhead, is a mixed cost. The following information was gathered from the first six months of operation regarding this cost: Month Case Production Utility Total Cost January 500 600 February 800 660 March 1,200 740 April 1,100 720 May 950 690 June 1,025 705 Instructions 1. Determine the fixed and variable portions of the utility cost using the high-low method. 2. Determine the contribution margin per ease. 3. Determine the fixed costs per month, including the utility fixed cost from part (1). 4. Determine the break-even number of cases per month. Part BAugust Budgets During July of the current year, the management of Genuine Spice Inc. asked the controller to prepare August manufacturing and income statement budgets. Demand was expected to be 1,500 cases at 100 per case for August. Inventory planning information is provided as follows: Finished Goods Inventory: Cases Cost Estimated finished goods inventory, August 1 300 12,000 Desired finished goods inventory, August 31 175 7,000 Materials Inventory: Cream Base (ozs.) Oils (ozs.) Bottles (bottles) Estimated materials inventory, August 1 250 290 600 Desired materials inventory, August 31 1,000 360 240 There was negligible work in process inventory assumed for either the beginning or end of the month; thus, none was assumed. In addition, there was no change in tile cost per unit or estimated units per case operating data from January. Instructions 5. Prepare the August production budget. 6. Prepare the August direct materials purchases budget. 7. Prepare the August direct labor budget. Round the hours required for production to the nearest hour. 8. Prepare the August factory overhead budget. 9. Prepare the August budgeted income statement, including selling expenses. Part CAugust Variance Analysis During September of the current year, the controller was asked to perform variance analyses for August. The January operating data provided the standard prices, rates, times, and quantities per case. There were 1,500 actual cases produced during August, which was 250 more cases than planned at the Beginning of the month. Actual data for August were as follows: Actual Direct Materials Price per Unit Actual Direct Materials Quantity per Case Cream base 0.016 per oz. 102 ozs. Natural oils 0.32 per oz. 31 ozs. Bottle (8 oz.) 0.42 per bottle 12.5 bottles Actual Direct Labor Rate Actual Direct Labor Time per Case Mixing 18.20 19.50 min. Filling 14.00 5.60 min. Actual variable overhead 305.00 Normal volume 1,600 cases The prices of the materials were different than .standard due to fluctuations in market prices. The standard quantity of materials used per case was an ideal standard. The Mixing Department used a higher grade labor classification during the month, thus causing the actual labor rale to exceed standard. The Filling Department used a lower grade labor classification during the month, thus causing the actual labor rate to be less titan standard. Instructions 10. Determine and interpret the direct materials price and quantity variances for the three materials. 11. Determine and interpret the direct labor rate and time variances for the two departments. Round hours to the nearest hour. 12. Determine and interpret the factory overhead controllable variance. 13. Determine and interpret the factory overhead volume variance. 14. Why are the standard direct labor and direct materials costs in the calculations for parts (10) and (11) based on the actual 1,500-case production volume rather than the planned 1,250 cases of production used in the budgets for parts (6) and (7)?
Rough Stuff makes 2 products: khaki shorts and khaki pants for men. Each product passes through the cutting machine area, which is the chief constraint during production. Khaki shorts take 15 minutes on the cutting machine and have a contribution margin per pair of shorts of $16. Khaki pants take 24 minutes on the cutting machine and have a contribution margin per pair of pants of $32. If it is assumed that Rough Stuff has 4,800 hours available on the cutting machine to service a minimum demand for each product of 3,000 units, how many of each product should be made?
Rough Stuff makes 2 products: khaki shorts and khaki pants for men. Each product passes through the cutting machine area, which is the chief constraint during production. Khaki shorts take 15 minutes on the cutting machine and have a contribution margin per pair of shorts of $16. Khaki pants take 24 minutes on the cutting machine and have a contribution margin per pair of pants of $32. If it is assumed that Rough Stuff has 4,800 hours available on the cutting machine to service a minimum demand for each product of 3,000 units, how much will profits increase f 100 more hours of machine time can be obtained?
Carltons Kitchens makes two types of pasta makers: Strands and Shapes. The company expects to manufacture 70,000 units of Strands, which has a per-unit direct material cost of $10 and a per-unit direct labor cost of $60. It also expects to manufacture 30.000 units of Shapes, which has a per-unit material cost of $15 and a per-unit direct labor cost of $40. It is estimated that Strands will use 140,000 machine hours and Shapes will require 60,000 machine hours. Historically, the company has used the traditional allocation method and applied overhead at a rate of $21 per machine hour. It was determined that there were three cost pools, and the overhead for each cost pool is shown: The cost driver for each cost pool and its expected activity is shown: A. What is the per-unit cost for each product under the traditional allocation method? B. What is the per-unit cost for each product under ABC costing?
asap Benoit Company produces three products—A, B, and C. Data concerning the three products follow (per unit): Product A B C Selling price $ 80.00 $ 54.00 $ 80.00 Variable expenses: Direct materials 24.00 18.00 12.00 Other variable expenses 24.00 25.20 44.00 Total variable expenses 48.00 43.20 56.00 Contribution margin $ 32.00 $ 10.80 $ 24.00 Contribution margin ratio 40% 20% 30% The company estimates that it can sell 850 units of each product per month. The same raw material is used in each product. The material costs $3 per pound with a maximum of 7,000 pounds available each month. Required: 1. Calculate the contribution margin per pound of the constraining resource for each product. 2. Which orders would you advise the company to accept first, those for A, B, or C? Which orders second? Third? 3. What is the maximum contribution margin that the company can earn per month if it makes optimal use of its 7,000 pounds of materials?
4.Sunrise Poles manufactures hiking poles and is planning on producing 4,000 units in March and 3,700 in April. Each pole requires a half pound of material, which costs $1.20 per pound. The company’s policy is to have enough material on hand to equal 10% of the next month’s production needs and to maintain a finished goods inventory equal to 25% of the next month’s production needs. PLEASE NOTE: Units are rounded to whole numbers with commas as needed (i.e. 1,234). All dollar amounts are rounded to whole dollars and shown with "$" and commas as needed (i.e. $12,345), except for any "per" amounts (units or dollars), which are rounded to two decimal places and shown with "$" and commas as needed (i.e. $1,234.56) Cost per Pound Desired Ending Inventory DM per Unit Units to be Produced Pounds Needed for Production Required DM Pounds Beginning Inventory Total Cost of DM Purchase Total DM Required Using the information above, along with the terms above, prepare a direct materials…
Just need to know if I got the right answer 1. Doogan Corporation makes a product with the following standard costs: Standard Quantity or Hours Standard Price or Rate Direct materials 9.2 grams $ 3.80 per gram Direct labor 0.3 hours $ 38.00 per hour Variable overhead 0.3 hours $ 8.80 per hour The company produced 7,000 units in January using 41,110 grams of direct material and 2,560 direct labor-hours. During the month, the company purchased 46,200 grams of the direct material at $3.50 per gram. The actual direct labor rate was $37.30 per hour and the actual variable overhead rate was $8.60 per hour. The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased. The variable overhead rate variance for January is: A.$420U B $512U C.$420F D. $512F I got $512F
You produce two products, Queen and King. Queen KingSales price per unit $800 $1,200Variable cost per unit 300 450 Stuffing hours required: 1 hour 2 hours You employ three workers who are trained to stuff these products. There are only 7,000 assembly hours available in the year. You believe that you can sell a maximum of 3,000 queen and 4,000 king. A. Which product should you emphasize? Support your answer with calculations.B. How many queen can you (should you) produce? Support your answer with calculationsC. How many king can you (should you) produce? Support your answer with calculations
Problem to solve: please help. Cane Company manufactures two products called Alpha and Beta that sell for $170 and $130, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 116,000 units of each product. Its average cost per unit for each product at this level of activity is given below: Alpha Beta Direct materials $ 30 $ 18 Direct labor 30 25 Variable manufacturing overhead 20 15 Traceable fixed manufacturing overhead 26 28 Variable selling expenses 22 18 Common fixed expenses 25 20 Total cost per unit $ 153 $ 124 The company’s traceable fixed manufacturing overhead is avoidable, whereas its common fixed expenses are unavoidable and have been allocated to products based on sales dollars. Please answer all of these fallowing questions: 5. Assume Cane expects to produce and sell 105,000 Alphas during the current year. One of Cane's sales representatives found a new customer…
Part 1 Liverpool Manufacturing Limited Liverpool Manufacturing Limited developed the following standard costs for direct material and direct labour for one of their major products, the 45 litres heavy-duty plastic container. Each container requires the following: Types of Cost Standard quantity Standard price Direct materials 0.2 kilos £30 per kilo Direct labour 0.1 hours £17 per hour During June, Liverpool Manufacturing Limited produced and sold 10,000 containers using 2,100 kilos of direct materials at an average cost per kilo of £25 and 1,100 direct labour hours at an average wage of £16 per hour. Required: a) Calculate the following variances for June: i. Direct material price variance ii. Direct material quantity variance iv. Direct labour rate variance v. Direct labour efficiency variance
LO.2 (Cost behavior) PlumView Printers makes stationery sets of 100 percent rag content edged in 24 karat gold. In an average month, the fi rm produces 80,000 boxes of stationery; each box contains 100 pages of stationery and 80 envelopes. Production costs are incurred for paper, ink, glue, and boxes. Th e company manufactures this product in batches of 500 boxes of a specifi c stationery design. Th e following data have been extracted from the company’s accounting records for June 2010: Cost of paper for each batch $10,000Cost of ink and glue for each batch 1,000Cost of 1,000 gold boxes for each batch 32,000Direct labor for producing each batch 16,000Cost of designing each batch 20,000 Overhead charges total $408,000 per month and are considered fully fi xed for purposes of cost estimation. a. What is the cost per box of stationery based on average production volume?b. If sales volume increases to 120,000 boxes per month, what will be the cost per box (assuming that cost behavior…
1.Ahmad Jelani Enterprise produces ladies’ veils using the brand name ‘Taqwa’, which are specially designed for local market. The main fabrics are imported from Laos. Details of the product costing for the past 3 months are as follow: Quantity produced 3,000 units Actual fabrics price RM2.80/meter Standard fabrics price RM2.50/meter Actual quantity used 5.3 meters/unit Standard quantity used 5 meters/unit Actual labour rate RM4.50/hour Standard labour rate RM4.00/hour Actual labour hours 540 hours Standard labour hours 528 hours REQUIRED: Calculate the direct labour rate variance. Select one: A. RM264 U B. RM270 F C. RM270 U D. RM264 F 2. AG company purchased RM8,000 of merchandise on 5 January with credit terms 5/10, n/30. On 7 January, AG company returned RM500 worth of the merchandise. On 14 January, AG company paid the full amount due. The amount of the…

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