Input Cost/Block Direct materials 0.5 Ib. @ $12/lb. $ 6.00 Direct manufacturing labour 1.4 hours @ $20/hour 28.00 Manufacturing overhead: Variable $6/lb. 0.5 Ib. 3.00 Fixed $15/lb. 0.3 lb. 4.50 Standard cost per block $41.50 Actual results for April 2021 were as follows: Production 24,000 blocks Direct materials purchased 12,000 lb. at $13/lb. Direct materials used 11,450 Ib. Direct manufacturing labour 38,000 hours for $798000 Variable manufacturing overhead $68,150 Fixed manufacturing overhead $155,000
Q: Sage Industries and Pronghorn Inc. enter into an agreement that requires Pronghorn Inc. to build thr...
A: The question is based on the concept of Lease Accounting.
Q: ABC Company showed in its memorandum records the following balances for the year 2020: Fair value of...
A: Actual return on pension plan assets =Fair value of plan assets on 31/12/2020 - Fair value of plan ...
Q: For purposes of computing the MCIT, which will not form part of cost of goods sold for traders: ...
A: MCIT is minimum corporate income tax, which is being payable by the domestic companies. The rate def...
Q: 2 All of the following increase owner’s equity except for which one?A. gainsB. investments by owners...
A: Owners equity is the total amount or value that is attributable for the owners and shareholders of t...
Q: Select all the true statements from the following pool of statements: A - Tax, being one of the indi...
A: The answer for the question of identifying true statements is discussed hereunder. Tax is a mandato...
Q: What is the number of shares outstanding?
A: Answer - c.44,000
Q: C Corp purchased 80% of the stock of D Corp. for 232,000. At the date of acquisition the consolidate...
A: Formula: Purchase value = Total Net assets of D corp x Percentage acquired
Q: PROBLEM 1 (ERROR CORRECTION) Koshu Co., a calendar year entity, contained the following independent ...
A:
Q: January 3 Purchased equipment for $55000, paying S45000 in cash and signing a 10000, 4-month, 10% no...
A: Journal Entry: Journal entry is the act of keeping records of transactions in an accounting journal....
Q: Revenue and expense data for Innovation Quarter Inc. for two recent years are as follows: Current Ye...
A: Preparation of comparative income statement with other requirement are as follows.
Q: The contingent liability is an accrual for possible loss on a P1,000,000 lawsuit filed against the e...
A: Answer - Calculation of amount should be reported on December 31, 2020 for current liabilities - ...
Q: The XYZ partnership incurs $23,000 of organization costs during 2020. The partnership started operat...
A: Since full month of amortisation is to be followed, thus it shall be treated as the organization cos...
Q: ieko holds 50 out of 180 shares of Natural Gas, Inc. Natural Gas uses cumulative voting to elect dir...
A: Cumulative voting is used when electing a new director or board of directors.Each shareholder typi...
Q: If a business is owned by three partners, how many drawings accounts are required on the books? Why...
A: If a business is owned by three partners, it is required to have separate drawing account for each p...
Q: Bonita Leasing Company agrees to lease equipment to Windsor Corporation on January 1, 2020. The foll...
A: A lease is an arrangement where a lessor agrees to allow a lessee to control the use of the asset fo...
Q: The government has decided to give a special handout where RM10,000 can be withdrawn from KWSP. What...
A: Employees' Provident Fund (EPF; Malay: Kumpulan Wang Simpanan Pekerja, KWSP) may be a federal statut...
Q: Which of the following accounts are used when recording the sales entry of a sale on credit?A. merch...
A: Sales of goods means when goods are being delivered to some outside party. Sales can be made on cash...
Q: henew Questiens I a Explain the histoical d efinition Of riski b. Wrat is a bss exposure? C. Hw dues...
A: Risk is frequently mistaken with uncertainty. Uncertainty describes a situation in which the result ...
Q: income Statement represents all the funds that permanentty exit the enterprise as Cost of Goods Sold...
A:
Q: A business has the following transactions:• The business is started by receiving cash from an invest...
A: Net income is computed by collecting revenues and deducting company expenditures such as production ...
Q: Answer with computation and explanation X Company sold 1,000 ordinary shares at par of P20 per sha...
A: Sahre premium = Issue value of ordinary shares - Par value of ordinary shares Where, Par value of o...
Q: Which document shows the cost of direct materials, direct labor, and overhead applied for each speci...
A: A job cost sheet is a list of the actual costs of a task. The accounting department creates the repo...
Q: Louise has worked for Rocky for 8 years. Unfortunately, due to COVID-19 pandemic, Rocky is forced to...
A: The manner through which a particular activity or a transaction is taxable or is exempted from tax i...
Q: On December 31, 2020, Sack Port Ventures Inc. borrowed $103,000 by signing a four-year, 8.0% install...
A: In the given question, the accrued interest and principal is required to be paid at the end of each ...
Q: ..new D Bonita Leasing Company agrees to lease equipment to Windsor Corporation on January 1, 2020....
A: Calculation of Annual Rental = {(Fair value) - (residual value x PV of $1 10% for 7 years)} / PV of ...
Q: Morganton Company makes one product and it provided the following information to help prepare the ma...
A: Accounts receivable refer to the amount due to the company by the customers as a result of sale of g...
Q: 16. H.E.B. Grocery Company, LP has two classes of stock authorized: 100 par value preferred and $1 p...
A: Share capital refers to the capital is raised by the issue of shares. It is an amount that is invest...
Q: 4. Suppose that there is a negotiation between two players over a painting. Person 1, the seller, ha...
A: In a game theory, a subgame perfect equilibrium is an advance version of Nash equilibrium used in dy...
Q: On December 31, 2019, Marin Corporation signed a 5-year, non-cancelable lease for a machine. The ter...
A: Lease payment- A lease payment is the correspondent of the monthly rent that is officially dictated ...
Q: What are intracompany comparisons? What are intercompany comparisons? How do they differ?
A: The examination of two or more procedures, papers, benchmark datasets, or other items is referred to...
Q: At the end of 2019, Framber Company received $8000 as a prepayment for renting a building to a tenan...
A: A preceding period adjustment will be used to accommodate for an inaccuracy. Any modifications to pr...
Q: pany's total number of shares issued and outstanding is 100,000 If the shares were issued 20% above ...
A: Legal capital is par value of equity or preferred stock that cannot be distributed and is not permi...
Q: Citi Company purchased factory equipment on March 10, 2010. The company `accountant revealed the fol...
A: Introduction Depreciation means decrease in value of assets due to obsolete and old conditions
Q: A Moving to another quesbion will Save this respose. Question 2 Dividend payements does not depend o...
A: Dividend policy means financial policies regarding company uses structure to dividend payout to shar...
Q: Determine the labor burden for an employee given the information in Table below. Assume the employee...
A: Social security = 6.2% x$85000= $5270 FUTA= .6% of wages to 7000= .6% x 7000( since wages is $85000)...
Q: Working/Application of ABC analysis?
A: Solution Activity based coating (ABC) is a method of assigning overhead and indirect cost -Such as s...
Q: ers Its eal bo tons
A: Given: company sold=500,000 customer redeemed=220,000 boxtops receiving=55,000bowls
Q: The total factory overhead for Bardot Marine Company is budgeted for the year at $1,518,000. Bardot ...
A: Factory Overhead Rate Per Hour = Factory Overhead / Direct Labor Hours Factory Overhead Rate Per Uni...
Q: The comparative financial statements of Marshal Inc. are as follows. The markat price of Manhal comm...
A: Ratio analysis helps to analyze the financial statements of the company. The management can take dec...
Q: Meagley Company presents the following condensed income statement and balance sheet information for ...
A: Vertical Analysis - Common Size Statement is also known as the vertical analysis method. The Company...
Q: You are given the following post-closing trial balance of Clinton Company for December 31, 2018: Deb...
A: 1. Unadjusted net loss Particulars Amount Closing balance of retained earnings (143200) L...
Q: Which of the following pairs increase with credit entries?A. supplies and retained earningsB. rent e...
A: There are two sides of account, used in accounting. One is debit side and other is credit side. All ...
Q: During your audit of cash receipts of shift number 1 of a Burger Stand, the following details of inv...
A: Cash remittance: Cash remittance refers to the payment made to a party through cash instead of trans...
Q: Oriole Company, a major retailer of bicycles and accessories, operates several stores and is a publi...
A: All operations that are not investing or financing are included in the cash flow from operating acti...
Q: QUESTION TWO IFA Corporations had Net Income of $780,000 and the following information for January 2...
A: Since you have posted a question with multiple sub-parts, we will solve the first three subparts for...
Q: Miguel Wing has decided to enter contract with uber service provider in his area. The driver offers ...
A: GIVEN There is 40% Chance he will drive an Average of 12,000 Kms Per Annum There is 30% Chance h...
Q: 7...new.e1..... Sage Industries and Pronghorn Inc. enter into an agreement that requires Pronghor...
A:
Q: What type of fund is unique only to a local government unit? Select the correct response: General Fu...
A: Funds refer to the supply and maintenance of finance for some particular purpose, so when a term is ...
Q: Mark’s Music is a store that buys and sells musical instruments in Ontario, where the HST rate is 13...
A: Solution A journal is a company's official book in which all business transaction are recorded in ch...
Q: Which of the following statements is true?A. Tangible assets lack physical substance.B. Tangible ass...
A: Assets are the important element of accounting books and records of the business. It includes all ty...
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.
f. Variable manufacturing
g. Fixed manufacturing overhead spending variance
h. Production-volume variance
Step by step
Solved in 4 steps with 1 images
- 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.)Firenza Company manufactures specialty tools to customer order. Budgeted overhead for the coming year is: Previously, Sanjay Bhatt, Firenza Companys controller, had applied overhead on the basis of machine hours. Expected machine hours for the coming year are 50,000. Sanjay has been reading about activity-based costing, and he wonders whether or not it might offer some advantages to his company. He decided that appropriate drivers for overhead activities are purchase orders for purchasing, number of setups for setup cost, engineering hours for engineering cost, and machine hours for other. Budgeted amounts for these drivers are 5,000 purchase orders, 500 setups, and 2,500 engineering hours. Sanjay has been asked to prepare bids for two jobs with the following information: The typical bid price includes a 40 percent markup over full manufacturing cost. Required: 1. Calculate a plantwide rate for Firenza Company based on machine hours. What is the bid price of each job using this rate? 2. Calculate activity rates for the four overhead activities. What is the bid price of each job using these rates? 3. Which bids are more accurate? Why?Greiner Company makes and sells high-quality glare filters for microcomputer monitors. John Craven, controller, is responsible for preparing Greiners master budget and has assembled the following data for the coming year. The direct labor rate includes wages, all employee-related benefits, and the employers share of FICA. Labor saving machinery will be fully operational by March. Also, as of March 1, the companys union contract calls for an increase in direct labor wages that is included in the direct labor rate. Greiner expects to have 5,600 glare filters in inventory on December 31 of the current year, and has a policy of carrying 35 percent of the following month's projected sales in inventory. Information on the first four months of the coming year is as follows: Required: 1. Prepare the following monthly budgets for Greiner Company for the first quarter of the coming year. Be sure to show supporting calculations. a. Production budget in units b. Direct labor budget in hours c. Direct materials cost budget d. Sales budget 2. Calculate the total budgeted contribution margin for Greiner Company by month and in total for the first quarter of the coming year. Be sure to show supporting calculations. (CMA adapted)
- Minor Co. has a job order cost system and applies overhead based on departmental rates. Service Department 1 has total budgeted costs of 168,000 for next year. Service Department 2 has total budgeted costs of 280,000 for next year. Minor allocates service department costs solely to the producing departments. Service Department 1 cost is allocated to producing departments on the basis of machine hours. Service Department 2 cost is allocated to producing departments on the basis of direct labor hours. Producing Department 1 has budgeted 8,000 machine hours and 12,000 direct labor hours. Producing Department 2 has budgeted 2,000 machine hours and 12,000 direct labor hours. What is the total cost allocation from the two service departments to Producing Department 1? a. 173,600 b. 140,000 c. 134,400 d. 274,400Young 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.John Sheng, a cost accountant at Starlet Company, is developing departmental factory overhead application rates for the companys Tooling and Fabricating departments. The budgeted overhead for each department and the data for one job are as follows: Using the departmental overhead application rates, total overhead applied to Job 231 in the Tooling and Fabricating departments will be: a. 225. b. 303. c. 537. d. 671.
- 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.Brees, Inc., a manufacturer of golf carts, has just received an offer from a supplier to provide 2,600 units of a component used in its main product. The component is a track assembly that is currently produced internally. The supplier has offered to sell the track assembly for 66 per unit. Brees is currently using a traditional, unit-based costing system that assigns overhead to jobs on the basis of direct labor hours. The estimated traditional full cost of producing the track assembly is as follows: Prior to making a decision, the companys CEO commissioned a special study to see whether there would be any decrease in the fixed overhead costs. The results of the study revealed the following: 3 setups1,160 each (The setups would be avoided, and total spending could be reduced by 1,160 per setup.) One half-time inspector is needed. The company already uses part-time inspectors hired through a temporary employment agency. The yearly cost of the part-time inspectors for the track assembly operation is 12,300 and could be totally avoided if the part were purchased. Engineering work: 470 hours, 45/hour. (Although the work decreases by 470 hours, the engineer assigned to the track assembly line also spends time on other products, and there would be no reduction in his salary.) 75 fewer material moves at 30 per move. Required: 1. Ignore the special study, and determine whether the track assembly should be produced internally or purchased from the supplier. 2. Now, using the special study data, repeat the analysis. 3. Discuss the qualitative factors that would affect the decision, including strategic implications. 4. After reviewing the special study, the controller made the following remark: This study ignores the additional activity demands that purchasing would cause. For example, although the demand for inspecting the part on the production floor decreases, we may need to inspect the incoming parts in the receiving area. Will we actually save any inspection costs? Is the controller right?Johnston Company cleans and applies powder coat paint to metal items on a job-order basis. Johnston has budgeted the following amounts for various overhead categories in the coming year. In the coming year, Johnston expects to powder coat 120,000 units. Each unit takes 1.3 direct labor hours. Johnston has found that supplies and gas (used to run the drying ovensall units pass through the drying ovens after powder coat paint is applied) tend to vary with the number of units produced. All other overhead categories are considered to be fixed. (Round all overhead rates to the nearest cent.) Required: 1. Calculate the number of direct labor hours Johnston must budget for the coming year. Calculate the variable overhead rate. Calculate the total fixed overhead for the coming year. 2. Prepare an overhead budget for Johnston for the coming year. Show the total variable overhead, total fixed overhead, and total overhead. Calculate the fixed overhead rate and the total overhead rate (rounded to the nearest cent). 3. What if Johnston had expected to make 118,000 units next year? Assume that the variable overhead per unit does not change and the total fixed overhead amounts do not change. Calculate the new budgeted direct labor hours and prepare a new overhead budget. Calculate the fixed overhead rate and the total overhead rate (rounded to the nearest cent).
- Krouse Company produces two products, forged putter heads and laminated putter heads, which are sold through specialty golf shops. The company is in the process of developing itsoperating budget for the coming year. Selected data regarding the companys two products areas follows: Manufacturing overhead is applied to units using direct labor hours. Variable manufacturing overhead Ls projected to be 25,000, and fixed manufacturing overhead is expected to be15,000. The estimated cost to produce one unit of the laminated putter head is: a. 42. b. 46. c. 52. d. 62.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.Salisbury Bottle Company manufactures plastic two-liter bottles for the beverage industry. The cost standards per 100 two-liter bottles are as follows: At the beginning of March, Salisburys management planned to produce 500,000 bottles. The actual number of bottles produced for March was 525,000 bottles. The actual costs for March of the current year were as follows: a. Prepare the March manufacturing standard cost budget (direct labor, direct materials, and factory overhead) for Salisbury, assuming planned production. b. Prepare a budget performance report for manufacturing costs, showing the total cost variances for direct materials, direct labor, and factory overhead for March. c. Interpret the budget performance report.