Problem 6. The Accountant of Camera Film Company has established the followingactivity cost of pools and cost drivers:BudgetedCost driverBudgetedlevelActivityPool rateOHP200,000P100,000100P2,000/set upNo. of set upsWeight of Raw MatWeight of Hazardouschemical usedMachine set upsMaterials hand50,000 lbs. P2/lb.Hazardous wastecontrolP50,000P75,00010,000 Ibs. P5/lb.1,00020,000 hrs. P10/m hr.P75/inspectionQuality controlOther overhead P200,000costsNumber of inspectionsMachine hoursAn order for 2,000 boxes of film development chemicals has the following productionrequirements:Machine set upsRaw materials410,000 pounds2,000 poundsHazardous materialsInspectionsMachine hours20500Direct manufacturing cost actually incurred to produce 2,000 boxes are Directmaterials of P425,000 and direct labor of P400,000.Before the company adopts the ABC approach of costing, the traditional approach ofallocating overhead, which is based on machine hours, is being used.Required:a. Determine the amount of overhead applied to each box of chemical under ABCand traditional costingb. Determine the manufacturing cost per box under ABC and traditional method.

Under activity based costing the overhead is applied to various activities using different overhead…

Problem 6. The Accountant of Camera Film Company has established the following activity cost of pools and cost drivers: Activity Cost driver Budgete d OH P200,000 No. of set ups P100,000 Weight of Raw Mat Budgeted level Pool rate Machine set ups 100 P2,000/set up Materials hand 50,000 lbs. P2/lb. Hazardous waste control P50,000 P75,000 Other overhead P200,000 Weight of Hazardous chemical used Number of inspections Machine hours 10,000 lbs. P5/lb. 1,000 20,000 hrs. P10/m hr. Quality control P75/inspection costs An order for 2,000 boxes of film development chemicals has the following production requirements:

Problem 6. The Accountant of Camera Film Company has established the following activity cost of pools and cost drivers: Activity Cost driver Budgete d OH P200,000 No. of set ups P100,000 Weight of Raw Mat Budgeted level Pool rate Machine set ups 100 P2,000/set up Materials hand 50,000 lbs. P2/lb. Hazardous waste control P50,000 P75,000 Other overhead P200,000 Weight of Hazardous chemical used Number of inspections Machine hours 10,000 lbs. P5/lb. 1,000 20,000 hrs. P10/m hr. Quality control P75/inspection costs An order for 2,000 boxes of film development chemicals has the following production requirements:

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter9: Standard Costing: A Functional-based Control Approach

Section: Chapter Questions

Problem 35P: Refer to the data in Problem 9.34. Vet-Pro, Inc., also uses two different types of direct labor in...

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I. PROBLEM SOLVINGAnswer the following items on the space provided. Show your computations.At the beginning of 201A, ABC Company had the following standard costs for one (1) of its chemical products:Direct material (3 pounds at P3.20) P9.60Labor standard (0.9 hours at P9.00) 8.10Variable overhead (0.9 hours at P1.50) 1.35Fixed overhead (0.9 hours at P4.00) 3.60Total P22.65ABC computes its overhead rates using budgeted capacity, which is 144,000 units. Actual results for 201Aare:Units produced 140,000 unitsMaterials purchased 421,175 lbs. at P3.30Materials used 421,000 lbs.Direct labor 128,750 hrs at P8.90Fixed overhead P517,525Variable overhead 218,000Required: Indicate whether conditions are favorable or unfavorable. 1. Material purchase price variance (MPPV)2. Material price usage variance (MPUV)3. Material quantity variance (MQV)4. Labor rate variance (LRV)5. Labor efficiency variance (LEV)6. Variable overhead (VOH) rate variance7. VOH efficiency variance8. Fixed overhead (FOH)…
Future Corporation has collected the following data for one of its products: Direct materials standard (3 pounds per unit 50.44/lb.) 51.32 per finished good Actual direct materials purchased 30,000 pounds Actual Direct Materials Used ( AQU) 34,000 pounds Actual Price (AP) paid per pound $0.64 How much is the direct materials price variance? Question content area bottom Part 1 A. 56,000 favorable B. $6,000 unfavorable C. 56,800 unfavorable D. 56,800 favorable
Consider the following data collected for Cari's Rentals: Direct Materials Direct Manufacturing LaborCost incurred:Actual inputs x Actual prices $210,000 $95,000Actual inputs x standard prices 214,000 88,000Standard inputs allowed for actual output x standard prices 220,000 85,000Required Compute the price and efficiency variances for direct materials: a. Price $10000 U; Efficiency $4000 F b. Price $4000 F; Efficiency $6000 F c. Price $4000 F; Efficiency $10000 U d. Price $5000 F; Efficiency $5000 F Sales $50,000; Variable cost $30,000; Net profit $6,000; fixed cost is_____. a. $10,000. b. $l4,000 . c. $12,000. d. 8,000. Jackie's Supplies applies manufacturing overhead costs to products at a budgeted indirect-cost rate of$60 per direct manufacturing labor-hour. A retail outlet has requested a bid on a special order of the Toy product. Estimates for this order include: Direct materials $40,000; 500 direct manufacturing labor-hours at $20 per hour; and a 20%…
Answer the following items on the space provided. Show your computations.At the beginning of 201A, ABC Company had the following standard costs for one (1) of its chemical products:Direct material (3 pounds at P3.20) P9.60Labor standard (0.9 hours at P9.00) 8.10Variable overhead (0.9 hours at P1.50) 1.35Fixed overhead (0.9 hours at P4.00) 3.60Total P22.65ABC computes its overhead rates using budgeted capacity, which is 144,000 units. Actual results for 201Aare:Units produced 140,000 unitsMaterials purchased 421,175 lbs. at P3.30Materials used 421,000 lbs.Direct labor 128,750 hrs at P8.90Fixed overhead P517,525Variable overhead 218,000Required: Indicate whether conditions are favorable or unfavorable. 7. VOH efficiency variance8. Fixed overhead (FOH) spending variance9. FOH volume variance
Refer to Exercise 9.17. Chypre, Inc., purchased the amount used of each direct material input on May 2 for the following actual prices: solvent mix for 5.20 per gallon, and aromatic compound for 8,010 per gallon. Required: 1. Compute and journalize the direct materials price variances. 2. Compute and journalize the direct materials usage variances. 3. Offer some possible reasons for why the variances occurred. Chypre, Inc., produces a cologne mist using a solvent mix (water and pure alcohol) and aromatic compounds (the scent base) that it sells to other companies for bottling and sale to consumers. Chypre developed the following standard cost sheet: On May 2, Chypre produced a batch of 1,000 gallons with the following actual results: Required: 1. Calculate the yield ratio. 2. Calculate the standard cost per unit of the yield. (Round to the nearest cent.) 3. Calculate the direct materials yield variance. (Round to the nearest cent.) 4. Calculate the direct materials mix variance. (Round to the nearest cent.)
Refer to the data in Problem 9.34. Vet-Pro, Inc., also uses two different types of direct labor in producing the anti-anxiety mixture: mixing and drum-filling labor (the completed product is placed into 50-gallon drums). For each batch of 20,000 gallons of direct materials input, the following standards have been developed for direct labor: The actual direct labor hours used for the output produced in March are also provided: Required: 1. Compute the direct labor mix and yield variances. (Round standard price of yield to four significant digits.) 2. Compute the total direct labor efficiency variance. Show that the total direct labor efficiency variance is equal to the sum of the direct labor mix and yield variances. Vet-Pro, Inc., produces a veterinary grade anti-anxiety mixture for pets with behavioral problems. Two chemical solutions, Aranol and Lendyl, are mixed and heated to produce a chemical that is sold to companies that produce the anti-anxiety pills. The mixture is produced in batches and has the following standards: During March, the following actual production information was provided: Required: 1. Compute the direct materials mix and yield variances. 2. Compute the total direct materials usage variance for Aranol and Lendyl. Show that the total direct materials usage variance is equal to the sum of the direct materials mix and yield variances.
Solve Sub parts: Direct labor efficiency (quantity) var.$________U F and all journals STANDARD COST SYSTEM: VARIANCES AND ENTRIES: Company B uses a standard cost system to control manufacturing costs. All expenditures were on account. Standards to produce one unit of finished product: Direct materials: 2 lbs. @ $8.00 per lb. Direct labor: 6 hours at $20.00 per hour Actual results: Actual production: 62,000 units Actual materials purchased: 130,000 lbs. @ $8.20 per lb. Actual materials used: 125,000 lbs Actual direct labor usage: 370,000 hours Actual direct labor costs: $ 7,585,000 REQUIRED: COMPUTE (must show calculations) and indicate whether favorable (F) or unfavorable…
The standard material costs of finished product PEP are as follows: 2 kg raw material A @ R10 per kg Actual information: Purchase of raw material A 2 000 kg @ R9.50 per kg Issue of raw material A 1 200 kg Units of product PEP manufactured 280 units Required Calculate the following in respect of material A (a) Purchase price variance (3) (b) Issue price variance (c) Quantity variance (d) Total variance.
Cost Assignment and JIT Bunker Company produces two types of glucose monitors (basic and advanced). Both pass through two producing departments: Fabrication and Assembly. Bunker also has an Inspection Department that is responsible for testing monitors to ensure that they perform within prespecified tolerance ranges (a sampling procedure is used). Budgeted data for the three departments are as follows: Inspection Fabrication Assembly Overhead $320,000 $480,000 $136,000 Number of tests — 20,000 60,000 Direct labor hours — 48,000 24,000 In the Fabrication Department, the basic model requires 1.1 hour(s) of direct labor and the advanced model requires 2.2 hour(s). In the Assembly Department, the basic model requires 1.3 hour(s) of direct labor and the advanced model requires 2.45 hours. There are 30,000 basic units produced and 16,000 advanced units. Immediately after preparing the budgeted data, a consultant suggests that two manufacturing cells be created:…
Variance Analysis, Revision of Standards,Journal EntriesThe Lubbock plant of Morril’s Small Motor Division produces a major subassembly for a 6.0horsepower motor for lawnmowers. The plant uses a standard costing system for productioncosting and control. The standard cost sheet for the subassembly follows:Direct materials (6.0 lbs. @ $5) $30.00Direct labor (1.6 hrs. @ $12) 19.20During the year, the Lubbock plant had the following actual production activity:a. Production of subassemblies totaled 50,000 units.b. A total of 260,000 pounds of raw materials was purchased at $4.70 per pound.c. There were 60,000 pounds of raw materials in beginning inventory (carried at $5 per lb.).There was no ending inventory.d. The company used 82,000 direct labor hours at a total cost of $1,066,000.The Lubbock plant’s practical activity is 60,000 units per year. Standard overhead rates are computed based on practical activity measured in standard direct labor hours.Required:1. CONCEPTUAL CONNECTION Compute…
. In a manufacturing process, following standards apply: Standard prices: Raw Material A – Rs 10/Kg and B – Rs 50/kg Standard Mix – 75% of A and 25% of B (By weight) Standard output – 90% of the raw material (in weight) In a particular period, actual costs, usages and output were as follows: 4400 kg of A costing Rs 46,500 1600 kgs of B costing Rs 78,500 Output was 5670 kgs of the product. The budgeted output of the period was 7200 kgs. Calculate all material variances. . In a manufacturing process, following standards apply: Standard prices: Raw Material A – Rs 10/Kg and B – Rs 50/kg Standard Mix – 75% of A and 25% of B (By weight) Standard output – 90% of the raw material (in weight) In a particular period, actual costs, usages and output were as follows: 4400 kg of A costing Rs 46,500 1600 kgs of B costing Rs 78,500 Output was 5670 kgs of the product. The budgeted output of the period was 7200 kgs. Calculate all material variances.
Question – 2 (remaining part)T he following information was taken from the books of MEHRAN MANUFACTURING CO.: STANDARD ACTUALMaterial 5,000 kg @ Rs. 10 4,800 kg @ 10Labour 1,000 Hours @ Rs. 18 1,200 Hours @ 16Factory Overhead Rs. 3,000 Rs. 3,600Required: (remaining part) 2] Prepare the Journal Entries to record and close above variances. 1] Compute the Following: a) Material Price Varianceb) Material Quantity Variance c) Labour Rate Varianced) Labour efficiency variance e) Overhead Variance