Performance Report Drizzdale Industries - Pharmaceutical Segment For the Fiscal Year Ended December 31 866,320 143,325 Sales $ (all figures in millions of dollars) Actual Variable Cost of Goods Sold $ Variable Operating Expenses Direct Fixed Manufacturing Overhead Direct Fixed Operating Expenses Common Fixed Expenses Budgeted Variance F/U Variance % F/U 162,162 96,300 17,280 14,140 Budgeted data for the same time period for the pharmaceutical segment are as foliows (all data are in millions): Budgeted sales in units Budgeted average selling price per unit Variable Cost of Goods Sold per unit 9,100 85 15 Variable Operating Expenses per unit Direct Fixed Manufacturing Overhead (in total) Direct Fixed Operating Expenses (in total) 18 Operating income (loss) 90,000 16,000 Common Fixed Expenses Allocated to the Pharmaceutical Segment 14,000

Performance Report Drizzdale Industries - Pharmaceutical Segment For the Fiscal Year Ended December 31 866,320 143,325 Sales $ (all figures in millions of dollars) Actual Variable Cost of Goods Sold $ Variable Operating Expenses Direct Fixed Manufacturing Overhead Direct Fixed Operating Expenses Common Fixed Expenses Budgeted Variance F/U Variance % F/U 162,162 96,300 17,280 14,140 Budgeted data for the same time period for the pharmaceutical segment are as foliows (all data are in millions): Budgeted sales in units Budgeted average selling price per unit Variable Cost of Goods Sold per unit 9,100 85 15 Variable Operating Expenses per unit Direct Fixed Manufacturing Overhead (in total) Direct Fixed Operating Expenses (in total) 18 Operating income (loss) 90,000 16,000 Common Fixed Expenses Allocated to the Pharmaceutical Segment 14,000

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter8: Standard Cost Accounting—materials, Labor, And Factory Overhead

Section: Chapter Questions

Problem 23E: (Appendix) Calculating factory overhead: three variances Using the data given in E8-17, calculate...

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(Appendix) Calculating factory overhead: three variances Using the data given in E8-17, calculate the following overhead variances: a. Spending variance. b. Production-volume variance. c. Efficiency variance. d. Was the factory overhead under- or overapplied? By what amount? In all problems involving variances, use F and U to indicate favorable and unfavorable variances, respectively.
Refer to the information for Cinturon Corporation on the previous page. Required: 1. Break down the total variance for labor into a rate variance and an efficiency variance using the columnar and formula approaches. 2. CONCEPTUAL CONNECTION As part of the investigation of the unfavorable variances, the plant manager interviews the production manager. The production manager complains strongly about the quality of the leather strips. He indicates that the strips are of lower quality than usual and that workers have to be more careful to avoid a belt with cracks and more time is required. Also, even with extra care, many belts have to be discarded and new ones produced to replace the rejects. This replacement work has also produced some overtime demands. What corrective action should the plant manager take?