PUGNA CORP. is a company specializing in manufacturing and sellingcustomized and specialized neck pillows. The selling price of each pillow isP750 per unit. On its first month of operations, 3,500 units were producedwhere 2,500 units were sold. Actual fixed costs are the same as budgetedfixed costs. The company is using a denominator level of activity of 4,000units. Information on its costs was as follows:Variable costs:Direct materials500,000Direct labor600,000300,000200,00090,000Manufacturing overheadSelling costsAdministrative costsFixed costs:50,000250,000400,000Selling costsAdministrative costsManufacturing overhead.If the company is using variable costing, how much is cost of goods sold andvolume variance, respectively?P1,000,000; 50,000 Fb.C. P1,000,000; 50,000 UFd. None; Noneа.P1,000,000; None3. If the company is using absorption costing, how much is net income or (loss)for the first month of operations?P 85,000b.P 35,000с.а.(P10,000)d.(P15,000)

Name: PUGNA CORP. is a company specializing in manufacturing and sellingcus
Uploaded: 2024-03-20T06:33:06.000Z
Channel: Bartleby
Description: PUGNA CORP. is a company specializing in manufacturing and sellingcustomized and specialized neck pillows. The selling price of each pillow isP750 per unit. On its first month of operations, 3,500 units were producedwhere 2,500 units were sold. Actu

1. C 1,000,000; 50,000 UF 2. A 85,000 Explanation:

Business

Accounting

PUGNA CORP. is a company specializing in manufacturing and sellin customized and specialized neck pillows. The selling price of each pillow i P750 per unit. On its first month of operations, 3,500 units were produced where 2,500 units were sold. Actual fixed costs are the same as budgeted fixed costs. The company is using a denominator level of activity of 4,000 units. Information on its costs was as follows: Variable costs: Direct materials 500,000 600,000 300,000 200,000 90,000 Direct labor Manufacturing overhead Selling costs Administrative costs Fixed costs: Selling costs Administrative costs 50,000 250,000 400,000 Manufacturing overhead If the company is using variable costing, how much is cost of goods sold and volume variance, respectively? P1,000,000; 50,000 F b. c. P1,000,000; 50,000 UF d. None; None a. P1,000,000; None If the company is using absorption costing, how much is net income or (loss) for the first month of operations? P 85,000 (P10,000) C. P 35,000 a. d. (P15,000) b.

PUGNA CORP. is a company specializing in manufacturing and sellin customized and specialized neck pillows. The selling price of each pillow i P750 per unit. On its first month of operations, 3,500 units were produced where 2,500 units were sold. Actual fixed costs are the same as budgeted fixed costs. The company is using a denominator level of activity of 4,000 units. Information on its costs was as follows: Variable costs: Direct materials 500,000 600,000 300,000 200,000 90,000 Direct labor Manufacturing overhead Selling costs Administrative costs Fixed costs: Selling costs Administrative costs 50,000 250,000 400,000 Manufacturing overhead If the company is using variable costing, how much is cost of goods sold and volume variance, respectively? P1,000,000; 50,000 F b. c. P1,000,000; 50,000 UF d. None; None a. P1,000,000; None If the company is using absorption costing, how much is net income or (loss) for the first month of operations? P 85,000 (P10,000) C. P 35,000 a. d. (P15,000) b.

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter8: Budgeting

Section: Chapter Questions

Problem 4CMA: Krouse Company produces two products, forged putter heads and laminated putter heads, which are sold...

See similar textbooks

Similar questions

Gent Designs requires three units of part A for every unit of Al that it produces. Currently, part A is made by Gent, with these per-unit costs in a month when 4.000 units were produced: Variable manufacturing overhead is applied at $1.00 per unit. The other $0.30 of overhead consists of allocated fixed costs. Gent will need 6,000 units of part A for the next years production. Cory Corporation has offered to supply 6,000 units of part A at a price of $7.00 per unit. It Gent accepts the offer, all of the variable costs and $1,200 of the fixed costs will be avoided. Should Gent Designs accept the offer from Cory Corporation?
Remarkable Enterprises requires four units of part A for every unit of Al that it produces. Currently, part A is made by Remarkable, with these per-unit costs in a month when 4,000 units were produced: Variable manufacturing overhead is applied at $1.60 per unit. The other $0.50 of overhead consists of allocated fixed costs. Remarkable will need 8,000 units of part A for the next years production. Altoona Corporation has offered to supply 8,000 units of part A at a price of $8.00 per unit. If Remarkable accepts the offer, all of the variable costs and $2,000 of the fixed costs will be avoided. Should Remarkable accept the offer from Altoona Corporation?
Bobcat uses a traditional cost system and estimates next years overhead will be $800.000, as driven by the estimated 25,000 direct labor hours. It manufactures three products and estimates the following costs: If the labor rate is $30 per hour, what is the per-unit cost of each product?
Colonels uses a traditional cost system and estimates next years overhead will be $480,000, with the estimated cost driver of 240,000 direct labor hours. It manufactures three products and estimates these costs: If the labor rate is $25 per hour, what is the per-unit cost of each product?
Hatch Manufacturing produces multiple machine parts. The theoretical cycle time for one of its products is 65 minutes per unit. The budgeted conversion costs for the manufacturing cell dedicated to the product are 12,960,000 per year. The total labor minutes available are 1,440,000. During the year, the cell was able to produce 0.6 units of the product per hour. Suppose also that production incentives exist to minimize unit product costs. Required: 1. Compute the theoretical conversion cost per unit. 2. Compute the applied conversion cost per minute (the amount of conversion cost actually assigned to the product). 3. Discuss how this approach to assigning conversion cost can improve delivery time performance. Explain how conversion cost acts as a performance driver for on-time deliveries.
Box Springs, Inc., makes two sizes of box springs: twin and double. The direct material for the twin is $25 per unit and $40 s used in direct labor, while the direct material for the double is $40 per unit, and the labor cost is $50 per unit. Box Springs estimates it will make 5,000 twins and 9,000 doubles in the next year. It estimates the overhead for each cost pool and cost driver activities as follows: How much does each unit cost to manufacture?
Box Springs. Inc., makes two sizes of box springs: queen and king. The direct material for the queen is $35 per unit and $55 is used in direct labor, while the direct material for the king is $55 per unit, and the labor cost is $70 per unit. Box Springs estimates it will make 4,300 queens and 3,000 kings in the next year. It estimates the overhead for each cost pool and cost driver activities as follows: How much does each unit cost to manufacture?
Jillian Manufacturing Inc. manufactures a single product and uses a standard cost system. The factory overhead is applied on the basis of direct labor hours. A condensed version of the company’s flexible budget follows: The product requires 3 lb of materials at a standard cost of $5 per pound and 2 hours of direct labor at a standard cost of $10 per hour. For the current year, the company planned to operate at the level of 6,250 direct labor hours and to produce 3,125 units of product. Actual production and costs for the year follow: Required: For the current year, compute the factory overhead rate that will be used for production. Show the variable and fixed components that make up the total predetermined rate to be used. Prepare a standard cost card for the product. Show the individual elements of the overhead rate as well as the total rate. Compute (a) standard hours allowed for production and (b) under- or overapplied factory overhead for the year. Determine the reason for any under- or overapplied factory overhead for the year by computing all variances, using each of the following methods: Two-variance method Three-variance method (appendix) Four-variance method (appendix)
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.
Moleno Company produces a single product and uses a standard cost system. The normal production volume is 120,000 units; each unit requires 5 direct labor hours at standard. Overhead is applied on the basis of direct labor hours. The budgeted overhead for the coming year is as follows: At normal volume. During the year, Moleno produced 118,600 units, worked 592,300 direct labor hours, and incurred actual fixed overhead costs of 2,150,400 and actual variable overhead costs of 1,422,800. Required: 1. Calculate the standard fixed overhead rate and the standard variable overhead rate. 2. Compute the applied fixed overhead and the applied variable overhead. What is the total fixed overhead variance? Total variable overhead variance? 3. CONCEPTUAL CONNECTION Break down the total fixed overhead variance into a spending variance and a volume variance. Discuss the significance of each. 4. CONCEPTUAL CONNECTION Compute the variable overhead spending and efficiency variances. Discuss the significance of each.
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.