Required:Calculate all variances and prepare an operating statement for the month endedJune 2015 Question 3Jones plc manufactures one product, and the entire product is sold as soon as it isproduced. There are no opening or closing inventories and work in progress isnegligible. The company operates a standard costing system and analysis ofvariances is made every month. The standard cost card for a product is as follows.0.5 kilos at£4 per kilo2 hours at £8.00 per hourVariable Overheads 2 hours at£0.30 per hourDirect MaterialsDirect WagesStandard Variable CostStandard ContributionStandard Selling PriceBudgeted output for the month of June 2015 was 5,100 units.Actual results for June 2015 were as follows:£2.0016.00.6018.6013.4032.00Production of 4,850 units was sold for £150,350.Materials consumed in production amounted to 2,300 kgs at a total cost of £9,800.Labour hours paid for amounted to 8,500 hours at a cost of £67,800.Actual operating hours amounted to 8,000 hours.Variable Overheads amounted to £2,600.

Introduction: The variances to be calculated are: Materials price variance (MPV)…

Jones plc manufactures one product, and the entire product is sold as soon as it is produced. There are no opening or closing inventories and work in progress is negligible. The company operates a standard costing system and analysis of variances is made every month. The standard cost card for a product is as follows. 0.5 kilos at£4 per kilo 2 hours at £8.00 per hour 2 hours at£0.30 per hour Direct Materials Direct Wages Variable Overheads Standard Variable Cost Standard Contribution Standard Selling Price Budgeted output for the month of June 2015 was 5,100 units. Actual results for June 2015 were as follows: £ 2.00 16.00 .60 18.60 13.40 32.00 Production of 4,850 units was sold for £150,350. Materials consumed in production amounted to 2,300 kgs at a total cost of £9,800. Labour hours paid for amounted to 8,500 hours at a cost of £67,800. Actual operating hours amounted to 8,000 hours. Variable Overheads amounted to £2,600.

Jones plc manufactures one product, and the entire product is sold as soon as it is produced. There are no opening or closing inventories and work in progress is negligible. The company operates a standard costing system and analysis of variances is made every month. The standard cost card for a product is as follows. 0.5 kilos at£4 per kilo 2 hours at £8.00 per hour 2 hours at£0.30 per hour Direct Materials Direct Wages Variable Overheads Standard Variable Cost Standard Contribution Standard Selling Price Budgeted output for the month of June 2015 was 5,100 units. Actual results for June 2015 were as follows: £ 2.00 16.00 .60 18.60 13.40 32.00 Production of 4,850 units was sold for £150,350. Materials consumed in production amounted to 2,300 kgs at a total cost of £9,800. Labour hours paid for amounted to 8,500 hours at a cost of £67,800. Actual operating hours amounted to 8,000 hours. Variable Overheads amounted to £2,600.

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

Chapter11: Performance Evaluation And Decentralization

Section: Chapter Questions

Problem 39E: (Appendix 11A) Manufacturing Cycle Efficiency Kurena Company provided the following information on...

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(Appendix 11A) Manufacturing Cycle Efficiency Kurena Company provided the following information on one of its factories: Maximum units produced in a quarter: 180,000 units Actual units produced in a quarter: 112,500 units Hours of cell production labor in a quarter: 30,000 hours Theoretical cycle time: 10 minutes per unit Actual cycle time: 16 minutes per unit Required: 1. Calculate the amount of processing time per unit and the amount of nonprocessing time per unit. 2. Calculate the MCE (rounded to three significant digits).
Labor classification trade-off Skidmore Electronics manufactures consumer electronic products. The company has three assembly labor classifications, S-1, S-2, and S-3. The three classifications are paid 15, 18, and 22 per hour, respectively. The assembly activity for a new smartphone is as follows: A product engineer proposes using a higher-rated employee to perform the assembly on the new phone. His analysis has shown that an S-3 employee can perform the assembly in 0.35 hour per unit. A. Determine the Assembly activity cost using the S-3 labor classification. B. Is the product engineers proposal supported?
Hart Manufacturing makes three products. Each product requires manufacturing operations in three departments: A, B, and C. The labor-hour requirements, by department, are as follows: During the next production period the labor-hours available are 450 in department A, 350 in department B, and 50 in department C. The profit contributions per unit are 25 for product 1, 28 for product 2, and 30 for product 3. a. Formulate a linear programming model for maximizing total profit contribution. b. Solve the linear program formulated in part (a). How much of each product should be produced, and what is the projected total profit contribution? c. After evaluating the solution obtained in part (b), one of the production supervisors noted that production setup costs had not been taken into account. She noted that setup costs are 400 for product 1, 550 for product 2, and 600 for product 3. If the solution developed in part (b) is to be used, what is the total profit contribution after taking into account the setup costs? d. Management realized that the optimal product mix, taking setup costs into account, might be different from the one recommended in part (b). Formulate a mixed-integer linear program that takes setup costs provided in part (c) into account. Management also stated that we should not consider making more than 175 units of product 1, 150 units of product 2, or 140 units of product 3. e. Solve the mixed-integer linear program formulated in part (d). How much of each product should be produced and what is the projected total profit contribution? Compare this profit contribution to that obtained in part (c).
Starling Co. manufactures one product with a selling price of 18 and variable cost of 12. Starlings total annual fixed costs are 38,400. If operating income last year was 28,800, what was the number of units Starling sold? a. 4,800 b. 6,400 c. 5,600 d. 11,200
Factory overhead rate Fabricator Inc., a specialized equipment manufacturer, uses a job order cost system. The overhead is allocated to jobs on the basis of direct labor hours. The overhead rate is now $3,000 per direct labor hour. The design engineer thinks that this is illogical. The design engineer has stated the following: Our accounting system doesn't make any sense to me. It tells me that every labor hour carries an additional burden of $3,000. This means that while direct labor makes up only 5% of our total product cost, it drives all our costs. In addition, these rates give my design engineers incentives to "design out" direct labor by using machine technology. Yet, over the past years as we have had less and less direct labor, the overhead rate keeps going up and up. I won't be surprised if next year the rate is $4,000 per direct labor hour. I'm also concerned because small errors in our estimates of the direct labor content can have a large impact on our estimated costs. Just a 30~minute error in our estimate of assembly time is worth $ 1,500. Small mistakes in our direct labor time estimates really swing our bids around. I think this puts us at a disadvantage when we are going after business. What do you think is a possible solution?
Factory overhead rate Fabricator Inc., a specialized equipment manufacturer, uses a job order cost system. The overhead is allocated to jobs on the basis of direct labor hours. The overhead rate is now $3,000 per direct labor hour. The design engineer thinks that this is illogical. The design engineer has stated the following: Our accounting system doesn't make any sense to me. It tells me that every labor hour carries an additional burden of $3,000. This means that while direct labor makes up only 5% of our total product cost, it drives all our costs. In addition, these rates give my design engineers incentives to "design out" direct labor by using machine technology. Yet, over the past years as we have had less and less direct labor, the overhead rate keeps going up and up. I won't be surprised if next year the rate is $4,000 per direct labor hour. I'm also concerned because small errors in our estimates of the direct labor content can have a large impact on our estimated costs. Just a 30~minute error in our estimate of assembly time is worth $ 1,500. Small mistakes in our direct labor time estimates really swing our bids around. I think this puts us at a disadvantage when we are going after business. What did the engineer mean about the large overhead rate being a disadvantage when plating bids and seeking new business?
Identify cost graphs The following cost graphs illustrate various types of cost behavior: For each of the following costs, identify the cost graph that best illustrates its cost behavior as the number of units produced increases: A. Total direct materials cost B. Electricity costs of 1,000 per month plus 0.10 per kilowatt-hour C. Per-unit cost of straight-line depreciation on factory equipment D. Salary of quality control supervisor, 20,000 per month E. Per-unit direct labor cost
Appendix Absorption costing income statement On June 30, the end of the first month of operations, Tudor Manufacturing Co. prepared the following income statement, based on the variable existing concept: Sales (420,000 units) 7,450,000 Variable cost of goods sold: Variable cost of goods manufactured (500,000 units x 14 per unit) 7,000,000 Less ending inventory (80,000 units x 14 per unit) 1,120,000 Variable cost of goods sold 5,880,000 Manufacturing margin 1,570,000 Variable selling and administrative expenses 80,000 Contribution margin 1,490,000 Fixed costs: Fixed manufacturing costs 160,000 Fixed selling and administrative expenses 75,000 235,000 Income from operations 1,255,000 a. Prepare an absorption costing income statement. b. Reconcile the variable costing income from operations of 1,255,000 with the absorption costing income from operations determined in (a).
Question No. 1Panther Tyres Inc., produces 50,000 units each day, and the average number of units in work in process is 200,000. The average annual inventory carrying cost percentage is 25%, and the average work in process is $1,000,000.Required:Determine the throughput time, Compute the annual carrying costs, If the same daily output can be achieved while reducing the work in process by 50%, determine the new throughput time.What has happened to the velocity of production?AND Compute the annual carrying costs.