US company Mary's Fine Fashions manufactures and sells various types of women's clothing. At the end of 2008, Mary had estimated for the production and sale of 25 000 short-sleeve shirts. Each shirt has a standard calling for 2.5 yards of direct material at a standard cost of $1.30 per yard and 15 minutes of direct labour time at a standard cost of $.20 per minute. During 2009, the company actually produced and sold 23 000 shirts. These 23 000 shirts had an actual direct materials cost of $77 142 (59 340 yards at $1.30 per yard) and an actual direct labour cost of $63 250 (253 000 minutes at $.25 per minute). Each shirt sells for $25. What is Mary's net income (loss) based on a flexible budget? $347 400 $332 925 $316 250 O $431 250
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- Orman Company produces neon-colored covers for tablets (e.g., iPads). For last year, Orman reported the following: Last year, Orman produced 89,000 units and sold 90,500 units at 10.50 per unit. Required: 1. Prepare a statement of cost of goods manufactured. 2. Prepare an absorption-costing income statement.Toraxia Inc. manufacturers a product that is packaged and sold in 10-kilogram bags. For 2023, the company developed the following standard costs per bag for direct materials and direct labour: Direct materials (10 kilograms @ $6.00 per kilogram) Direct labour (0.2 hours @ $28 per hour)Total standard cost per 10-kg bag Cost per Bag $60.00 5.60 ($65.60) In January, the company manufactured 3,500 bags. The company purchased 38,200 kilograms of materials costing $232,256 and used 36,500 kilograms. As well, the company paid $19,440 for direct labour and used 720 direct labour hours. Required: (A) Compute the materials price variance and materials usage variance and indicate whether each variance is favourable or unfavourable. (B) Compute the labour rate variance and labour efficiency variance and indicate whether each variance is favourable or unfavourable. (C) Provide possible reasons for each of the variances computed in (A) and (B). For example, regarding the materials price…Guadalupe Olayo produces grandfather clocks. Each grandfather clock normally sells for $1,500. The following manufacturing cost information per clock is available: Direct materials are $200, labor is $600, variable overhead is $50, and fixed overhead is $40 (based on planned production for the year of 1,200 clocks). Commissions are 10% of selling price, and fixed selling and administrative costs are $70,000. Guadalupe’s tax rate is 25%. A European company has asked Guadalupe to accept a special order for 400 clocks. Due to some minor design changes, the material and labor costs for the special order clocks would increase by 25%. Another production run would have to be scheduled for the special order, since the clocks are different from the regular clocks, at a cost of $2,200. In addition, Guadalupe would have to hire a temporary clerk to process the ISO and export paperwork for shipping to Europe, at a cost of $600. Commissions will be paid at the rate of 5% of the special order…
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- Bandar Industries manufactures sporting equipment. One of the company’s products is a football helmet that requires special plastic. During the quarter ending June 30, the company manufactured 3,400 helmets, using 2,448 kilograms of plastic. The plastic cost the company $18,605. According to the standard cost card, each helmet should require 0.64 kilograms of plastic, at a cost of $8.00 per kilogram. Required: What is the standard quantity of kilograms of plastic (SQ) that is allowed to make 3,400 helmets? What is the standard materials cost allowed (SQ × SP) to make 3,400 helmets? What is the materials spending variance? What is the materials price variance and the materials quantity variance? Note: For requirements 3 and 4, indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Do not round intermediate calculations.At the end of June 2019, Ash Design has spent RM 320,000 on 80,000 meters of fabric in the production of 20,000 dolls. The production manager is concerned that they are paying more than the company's standard RM 2 per meter fabric and is fully aware of the standard requirement of 8 meters of fabric per doll. The company spent RM 450,000 for 90,000 direct labor hours in the production of 20,000 dolls. The standard labor per doll is 4 hours at an hourly rate of RM 4. A review of Ash Design's 6-months performance revealed that the company had produced 20,000 dolls and incurred RM 90,000 of variable production overheads and worked 90,000 direct labor hours. The standard variable production overhead rate is RM 0.75 per direct hour for each doll and requires 4 standard direct labor hours. Ash Design budgeted and actual fixed overhead incurred for the last six months are RM 180,000 and RM 152,000 respectively. The annual budgeted production volume for Ash Design is 50,000 dolls. Based on the…Bandar Industries manufactures sporting equipment. One of the company’s products is a football helmet that requires special plastic. During the quarter ending June 30, the company manufactured 3,300 helmets, using 1,947 kilograms of plastic. The plastic cost the company $14,797. According to the standard cost card, each helmet should require 0.53 kilograms of plastic, at a cost of $8.00 per kilogram. Required: 1. What is the standard quantity of kilograms of plastic (SQ) that is allowed to make 3,300 helmets? 2. What is the standard materials cost allowed (SQ × SP) to make 3,300 helmets? 3. What is the materials spending variance? 4. What is the materials price variance and the materials quantity variance? (For requirements 3 and 4, indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Do not round intermediate calculations.)
- Alpine Luggage has a capacity to produce 420,000 suitcases per year. The company is currently producing and selling 340,000 units per year at a selling price of $400 per case. The cost of producing and selling one case follows: Variable manufacturing costs $ 160 Fix manufacturing costs 90 Variable selling and administrative costs 84 Fixed selling and administrative costs 20 Total costs $ 303 The company has received a special order for 30,000 suitcases at a price of $248 per case. It will not have to pay any sales commission on the special order, so the variable selling and administrative costs would be only 51 per suitcase. The special order would have no effect on total fixed costs. The company has rejected the offer based on the following computations: Selling price per case…Bandar Industries manufactures sporting equipment. One of the company's products is a football helmet that requires special plastic. During the quarter ending June 30, the company manufactured 4,000 helmets, using 2,200 kilograms of plastic. The plastic cost the company $14,520. According to the standard cost card, each helmet should require 0.50 kilograms of plastic, at a cost of $7.00 per kilogram. Required: 1. What is the standard quantity of kilograms of plastic (SQ) that is allowed to make 4,000 helmets? 2. What is the standard materials cost allowed (SQ × SP) to make 4,000 helmets? 3. What is the material's spending variance?Windmire Company manufactures and sells to local wholesalers approximately 300,000 units per month at a sales price of $4 per unit. Monthly costs for the production and sale of this quantity follow. Direct materials $384,000 Direct labor 96,000 Overhead . 288,000 Selling expenses 120,000 Administrative expenses . 80,000 Total costs and expenses $968,000 A new out-of-state distributor has offered to buy 50,000 units next month for $3.44 each. These units would be marketed in other states and would not affect Windmire’s sales through its normal channels. A study of the costs of this new business reveals the following: ∙ Direct materials costs are 100% variable. ∙ Per unit direct labor costs for the additional units would be 50% higher than normal because their production would require overtime pay at 1½ times their normal rate to meet the distributor’s deadline. ∙ Twenty-five percent of normal annual overhead costs are fixed at any production level from 250,000 to 400,000 units. The…