SECTION C: ANSWER ALL QUESTIONS IN THIS SECTION Walnut Ltd manufactures wardrobe and the company prepare budget for the 1st year by " standard cost as follows: Direct material cost per unit: 6 m² and £50/ m² Direct labour cost per unit: 12hours and £15/hour Production overheads are esimated by direct labour hours with £4/hour for variable cost and £16/hour for fixed cost. Following budget, Walnut Ltd produce 5000 products and sell 4000 products and selling price per unit is £1,200 in this year. The selling and administrative expense budget is £1,000,000/year and it is totally fixed cost. Required: a) Applied marginal costing to prepare income statements b) Applied absorption costing to prepare income statements c) Explain the difference in profit between two reports ||[

SECTION C: ANSWER ALL QUESTIONS IN THIS SECTION Walnut Ltd manufactures wardrobe and the company prepare budget for the 1st year by " standard cost as follows: Direct material cost per unit: 6 m² and £50/ m² Direct labour cost per unit: 12hours and £15/hour Production overheads are esimated by direct labour hours with £4/hour for variable cost and £16/hour for fixed cost. Following budget, Walnut Ltd produce 5000 products and sell 4000 products and selling price per unit is £1,200 in this year. The selling and administrative expense budget is £1,000,000/year and it is totally fixed cost. Required: a) Applied marginal costing to prepare income statements b) Applied absorption costing to prepare income statements c) Explain the difference in profit between two reports ||[

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter4: Accounting For Factory Overhead

Section: Chapter Questions

Problem 6E: Computing unit costs at different levels of production French Fragrances, Ltd. budgeted for 12,000...

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Lens & Shades sells sunglasses for $37 each and is estimating sales of 21,000 units in January and 19,000 in February. Each lens consist of 2.00 mm of plastic costing $2.50 per mm, 1.7 oz of dye costing $2.80 per ounce. and 0.50 hours direct labor at a labor rate of $18 per unit. Desired inventory levels are: Prepare a sales budget, production budget, direct materials budget for silicon and solution, and a direct labor budget.
Computing unit costs at different levels of production French Fragrances, Ltd. budgeted for 12,000 bottles of perfume Belle during May. The unit cost of Belle was $20, consisting of direct materials, $7; direct labor, $8; and factory overhead, $5 (fixed, $2; variable, $3). What would be the unit cost if 10,000 bottles were manufactured? (Hint: You must first determine the total fixed costs.) What would be the unit cost if 20,000 bottles were manufactured? Explain why a difference occurs in the unit costs.
Variable Cost Ratio, Contribution Margin Ratio Chillmax Company plans to sell 3,500 pairs of shoes at 60 each in the coming year. Unit variable cost is 21 (includes direct materials, direct labor, variable factory overhead, and variable selling expense). Fixed factory overhead is 30,000 and fixed selling and administrative expense is 48,000. Required: 1. Calculate the variable cost ratio. 2. Calculate the contribution margin ratio. 3. Prepare a contribution margin income statement based on the budgeted figures for next year. In a column next to the income statement, show the percentages based on sales for sales, total variable cost, and total contribution margin.
Refer to Exercise 8.27. At the end of the year, Meliore, Inc., actually produced 310,000 units of the standard model and 115,000 of the deluxe model. The actual overhead costs incurred were: Required: Prepare a performance report for the period. In an attempt to improve budgeting, the controller for Meliore, Inc., has developed a flexible budget for overhead costs. Meliore, Inc., makes two types of products, the standard model and the deluxe model. Meliore expects to produce 300,000 units of the standard model and 120,000 units of the deluxe model during the coming year. The standard model requires 0.05 direct labor hour per unit, and the deluxe model requires 0.08. The controller has developed the following cost formulas for each of the four overhead items: Required: 1. Prepare an overhead budget for the expected activity level for the coming year. 2. Prepare an overhead budget that reflects production that is 10 percent higher than expected (for both products) and a budget for production that is 20 percent lower than expected.
Nashler Company has the following budgeted variable costs per unit produced: Budgeted fixed overhead costs per month include supervision of 98,000, depreciation of 76,000, and other overhead of 245,000. Required: 1. Prepare a flexible budget for all costs of production for the following levels of production: 160,000 units, 170,000 units, and 175,000 units. 2. What is the per-unit total product cost for each of the production levels from Requirement 1? (Round each unit cost to the nearest cent.) 3. What if Nashler Companys cost of maintenance rose to 0.22 per unit? How would that affect the unit product costs calculated in Requirement 2?
Lens Junction sells lenses for $45 each and is estimating sales of 15,000 units in January and 18,000 in February. Each lens consists of 2 pounds of silicon costing $2.50 per pound, 3 oz of solution costing $3 per ounce, and 30 minutes of direct labor at a labor rate of $18 per hour. Desired inventory levels are: Â Prepare a sales budget, production budget. direct materials budget for silicon and solution, and a direct labor budget.
Play-Disc makes Frisbee-type plastic discs. Each 12-inch diameter plastic disc has the following manufacturing costs: For the coming year, Play-Disc expects to make 300,000 plastic discs, and to sell 285,000 of them. Budgeted beginning inventory in units is 16,000 with unit cost of 4.75. (There are no beginning or ending inventories of work in process.) Required: 1. Prepare an ending finished goods inventory budget for Play-Disc for the coming year. 2. What if sales increased to 290,000 discs? How would that affect the ending finished goods inventory budget? Calculate the value of budgeted ending finished goods inventory.
Salisbury Bottle Company manufactures plastic two-liter bottles for the beverage industry. The cost standards per 100 two-liter bottles are as follows: At the beginning of March, Salisburys management planned to produce 500,000 bottles. The actual number of bottles produced for March was 525,000 bottles. The actual costs for March of the current year were as follows: a. Prepare the March manufacturing standard cost budget (direct labor, direct materials, and factory overhead) for Salisbury, assuming planned production. b. Prepare a budget performance report for manufacturing costs, showing the total cost variances for direct materials, direct labor, and factory overhead for March. c. Interpret the budget performance report.
Using High-Low to Calculate Predicted Total Variable Cost and Total Cost for Budgeted Output Refer to the information for Pizza Vesuvio on the previous page. Assume that this information was used to construct the following formula for monthly labor cost. TotalLaborCost=5,237+(7.40EmployeeHours) Required: Assume that 675 employee hours are budgeted for the month of September. Use the total labor cost formula for the following calculations: 1. Calculate total variable labor cost for September. 2. Calculate total labor cost for September.
Refer to Cornerstone Exercise 8.6. Required: 1. Calculate the total budgeted cost of units produced for Play-Disc for the coming year. Show the cost of direct materials, direct labor, and overhead. 2. Prepare a cost of goods sold budget for Play-Disc for the year. 3. What if the beginning inventory of finished goods was 75,200 (for 16,000 units)? How would that affect the cost of goods sold budget? (Assume Play-Disc uses the FIFO method.) Play-Disc makes Frisbee-type plastic discs. Each 12-inch diameter plastic disc has the following manufacturing costs: For the coming year, Play-Disc expects to make 300,000 plastic discs, and to sell 285,000 of them. Budgeted beginning inventory in units is 16,000 with unit cost of 4.75. (There are no beginning or ending inventories of work in process.) Required: 1. Prepare an ending finished goods inventory budget for Play-Disc for the coming year. 2. What if sales increased to 290,000 discs? How would that affect the ending finished goods inventory budget? Calculate the value of budgeted ending finished goods inventory.
Sunrise Poles manufactures hiking poles and is planning on producing 4,000 units in March and 3,700 in April. Each pole requires a half pound of material, which costs $1.20 per pound. The companys policy is to have enough material on hand to equal 10% of the next months production needs and to maintain a finished goods inventory equal to 25% of the next months production needs. What is the budgeted cost of purchases for March?
TIB makes custom guitars and prepared the following sales budget for the second quarter It also has this additional information related to its expenses: Direct material per unit $55, Direct labor per hour 20, Variable manufacturing overhead per hour 3.50, Fixed manufacturing overhead per month 3,000, Sales commissions per unit 20, Sales salaries per month 5,000, Delivery expense per unit 0.50, Utilities per month 4,000. Administrative salaries per month 20,000, Marketing expenses per month 8,000, Insurance expense per month 11,000, Depreciation expense per month 9,000. Prepare a sales and administrative expense budget for each month in the quarter ended June 30. 2018.