Skelton Corporation had planned to produce 50,000 units of product during the first quarter of the current year. The company prepared the following budget on May 1: Budgeted (50,000 units) Variable costs: Direct materials used Direct labor Variable overhead $ 36.000 45,000 22,500 Fixed costs: Manufacturing overhead Total manufacturing costs 58.500 $162,000 During the first quarter, Carson produced 60,000 units and incurred total manufacturing costs of $184,000. The cost-volume relationship used to prepare Skelton's flexible budget for various production levels includes: O A. Fixed cost of $1.17 per unit . O B. Variable costs of $2.07 per unit. O C. Manufacturing overhead costs of $1.43 per unit. O D. Total cost of $3.05 per unit.

Skelton Corporation had planned to produce 50,000 units of product during the first quarter of the current year. The company prepared the following budget on May 1: Budgeted (50,000 units) Variable costs: Direct materials used Direct labor Variable overhead $ 36.000 45,000 22,500 Fixed costs: Manufacturing overhead Total manufacturing costs 58.500 $162,000 During the first quarter, Carson produced 60,000 units and incurred total manufacturing costs of $184,000. The cost-volume relationship used to prepare Skelton's flexible budget for various production levels includes: O A. Fixed cost of $1.17 per unit . O B. Variable costs of $2.07 per unit. O C. Manufacturing overhead costs of $1.43 per unit. O D. Total cost of $3.05 per unit.

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter19: Support Department And Joint Cost Allocation

Section: Chapter Questions

Problem 2CMA: Adam Corporation manufactures computer tables and has the following budgeted indirect manufacturing...

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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.
Adam Corporation manufactures computer tables and has the following budgeted indirect manufacturing cost information for the next year: If Adam uses the step-down (sequential) method, beginning with the Maintenance Department, to allocate support department costs to production departments, the total overhead (rounded to the nearest dollar) for the Machining Department to allocate to its products would be: a. 407,500. b. 422,750. c. 442,053. d. 445,000.
Eastman, Inc., manufactures and sells three products: R, S, and T. In January, Eastman, Inc., budgeted sales of the following. At the end of the year, actual sales revenue for Product R and Product S was 3,075,000 and 3,254,000, respectively. The actual price charged for Product R was 25 and for Product S was 20. Only 10 was charged for Product T to encourage more consumers to buy it, and actual sales revenue equaled 540,000 for this product. Required: 1. Calculate the sales price and sales volume variances for each of the three products based on the original budget. 2. Suppose that Product T is a new product just introduced during the year. What pricing strategy is Eastman, Inc., following for this product?
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