MARISSA Co., the consultant of MARISOL Co. had summarized the following standard cost data extracted from the historical records and performance reports issued by the cost accounting department in the prior year to assist in her analysis and evaluation of the standard costing policy of the company: Input required per unit 6 kg per unit 5 hours per unit Standard cost per unit Standard cost per unit P90 per kg P50 per hour Direct Materials P540 Direct Labor P250 Other information follows: Budgeted factory overhead for the year: Variable 480,000 600,000 Fixed The company's normal capacity per month is 400 units Actual cost materials purchased for the year is P2,342,000 During the year, direct materials purchased is 26,880 kg while direct materials actually used is 24,760 kgs Actual labor costs for the year 1,080,000 of which 24,900 direct labor hours was consumed Actual factory overhead amounted to 1,320,000, 65% of which is fixed cost, FOH is based on labor hours Actual production during the year 5,150 units

MARISSA Co., the consultant of MARISOL Co. had summarized the following standard cost data extracted from the historical records and performance reports issued by the cost accounting department in the prior year to assist in her analysis and evaluation of the standard costing policy of the company: Input required per unit 6 kg per unit 5 hours per unit Standard cost per unit Standard cost per unit P90 per kg P50 per hour Direct Materials P540 Direct Labor P250 Other information follows: Budgeted factory overhead for the year: Variable 480,000 600,000 Fixed The company's normal capacity per month is 400 units Actual cost materials purchased for the year is P2,342,000 During the year, direct materials purchased is 26,880 kg while direct materials actually used is 24,760 kgs Actual labor costs for the year 1,080,000 of which 24,900 direct labor hours was consumed Actual factory overhead amounted to 1,320,000, 65% of which is fixed cost, FOH is based on labor hours Actual production during the year 5,150 units

Name: Compute for variable overhead efficiency variance. MARISSA Co., the co
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Description: Compute for variable overhead efficiency variance. MARISSA Co., the consultant of MARISOL Co. had summarized the following standard cost dataextracted from the historical records and performance reports issued by the cost accountingdepartment in the

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter2: Basic Cost Management Concepts

Section: Chapter Questions

Problem 21E: Ellerson Company provided the following information for the last calendar year: During the year,...

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Cicleta Manufacturing has four activities: receiving materials, assembly, expediting products, and storing goods. Receiving and assembly are necessary activities; expediting and storing goods are unnecessary. The following data pertain to the four activities for the year ending 20x1 (actual price per unit of the activity driver is assumed to be equal to the standard price): Required: 1. Prepare a cost report for the year ending 20x1 that shows value-added costs, non-value-added costs, and total costs for each activity. 2. Explain why expediting products and storing goods are non-value-added activities. 3. What if receiving cost is a step-fixed cost with each step being 1,500 orders whereas assembly cost is a variable cost? What is the implication for reducing the cost of waste for each activity?
The chief executive officer of Acadia, Inc. attended a conference in which one of the sessions was devoted to variable costing. The CEO was impressed by the presentation and has asked that the following data of Acadia, Inc. be used to prepare comparative statements using variable costing and the companys absorption costing. The data follow: The factory produced 80,000 units during the period, and 70,000 units were sold for 700,000. 1. Prepare an income statement using variable costing. 2. Prepare an income statement using absorption costing. (Round unit costs to three decimal places.)
For E2-17, prepare any journal entries that would have been different if the only trigger points had been the purchase of materials and the sale of finished goods. Davis Co. uses backflush costing to account for its manufacturing costs. The trigger points are the purchase of materials, the completion of goods, and the sale of goods. Prepare journal entries to account for the following: a. Purchased raw materials, on account, 70,000. b. Requisitioned raw materials to production, 70,000. c. Distributed direct labor costs, 15,000. d. Factory overhead costs incurred, 45,000. (Use Various Credits for the account in the credit part of the entry.) e. Completed all of the production started. f. Sold the completed production for 195,000, on account. (Hint: Use a single account for raw materials and work in process.)
Patterson Company produces wafers for integrated circuits. Data for the most recent year are provided: aCalculated using number of dies as the single unit-level driver. bCalculated by multiplying the consumption ratio of each product by the cost of each activity. Required: 1. Using the five most expensive activities, calculate the overhead cost assigned to each product. Assume that the costs of the other activities are assigned in proportion to the cost of the five activities. 2. Calculate the error relative to the fully specified ABC product cost and comment on the outcome. 3. What if activities 1, 2, 5, and 8 each had a cost of 650,000 and the remaining activities had a cost of 50,000? Calculate the cost assigned to Wafer A by a fully specified ABC system and then by an approximately relevant ABC approach. Comment on the implications for the approximately relevant approach.
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.
At the beginning of the year, Lopez Company had the following standard cost sheet for one of its chemical products: Lopez computes its overhead rates using practical volume, which is 80,000 units. The actual results for the year are as follows: (a) Units produced: 79,600; (b) Direct labor: 158,900 hours at 18.10; (c) FOH: 831,000; and (d) VOH: 112,400. Required: 1. Compute the variable overhead spending and efficiency variances. 2. Compute the fixed overhead spending and volume variances.
Ripley, Inc., costs products using a normal costing system. The following data are available for last year: Overhead is applied on the basis of direct labor hours. Required: 1. What was the predetermined overhead rate? 2. What was the applied overhead for last year? 3. Was overhead over- or underapplied, and by how much? 4. What was the total cost per unit produced (carry your answer to four significant digits)?
Cushing, Inc., costs products using a normal costing system. The following data are available for last year: Overhead is applied on the basis of direct labor hours. What was last years per unit product cost? a. 1.39 b. 4.40 c. 4.43 d. 3.01
Method of Least Squares, Predicting Cost for Different Time Periods from the One Used to Develop a Cost Formula Refer to the information for Farnsworth Company on the previous page. However, assume that Tracy has used the method of least squares on the receiving data and has gotten the following results: Required: 1. Using the results from the method of least squares, prepare a cost formula for the receiving activity. 2. Using the formula from Requirement 1, what is the predicted cost of receiving for a month in which 1,450 receiving orders are processed? (Note: Round your answer to the nearest dollar.) 3. Prepare a cost formula for the receiving activity for a quarter. Based on this formula, what is the predicted cost of receiving for a quarter in which 4,650 receiving orders are anticipated? Prepare a cost formula for the receiving activity for a year. Based on this formula, what is the predicted cost of receiving for a year in which 18,000 receiving orders are anticipated?
Davis Co. uses backflush costing to account for its manufacturing costs. The trigger points are the purchase of materials, the completion of goods, and the sale of goods. Prepare journal entries to account for the following: a. Purchased raw materials, on account, 70,000. b. Requisitioned raw materials to production, 70,000. c. Distributed direct labor costs, 15,000. d. Factory overhead costs incurred, 45,000. (Use Various Credits for the account in the credit part of the entry.) e. Completed all of the production started. f. Sold the completed production for 195,000, on account. (Hint: Use a single account for raw materials and work in process.)
Summarized data for Backdraft Co. for its first year of operations are as follows: A. Prepare an income statement under absorption costing B. Prepare an income statement under variable costing
On May 1, Athens Inc. began the manufacture of a new mechanical device known as Snap. The company installed a standard cost system in accounting for manufacturing costs. The standard direct materials and labor costs for a unit of Snap follow: The following data came from Athens’ records for May: The amount shown above for the materials price variance is applicable to raw materials purchased during May. Required: Compute each of the following items for Athens for May. Show computations in good form. Standard quantity of raw materials allowed (in pounds) for actual production. Actual quantity of raw materials used (in pounds). (Hint: Be sure to consider the materials quantity variance.) Standard direct labor hours allowed. Actual direct labor hours worked. (Hint: Be sure to consider the direct labor efficiency variance.) Actual direct labor rate. (Hint: Be sure to consider the direct labor rate variance.)