Managerial Accounting-Question 23-3Bcan you assist with how i obtain the amounts in the attached sheet from this problem. this is section C of the question already answered. Factory Overhead Cost VarianceVariable factory overhead controllable variance:Actual variable FO cost incurred8,2008,320Budgeted variable FO cost for 2,080 hrs.Variance$(120)favorableFixed factory overhead volume variance:Hours at normal capacity2.000Standard hours for amount producedProductive capacity not usedStandard fixed FO cost rateVarianceTotal factory overhead cost variance%3D Chapter 23, Problem 3PBTextbook ProblemDirect materials, direct labor, and factory overhead cost varianceanalysisRoad Gripper Tire Co. manufactures automobile tires. Standardcosts and actual costs for direct materials, direct labor, andfactory overhead incurred for the manufacture of 4,160 tires wereas follows:Standard CostsActual CostsDirect materials101,000 Ibs. at 56.502000 hrs. at $15.40100,000 lbs. at 56.402,080 hrs. at $15.75Rates per direct labor hr.Direct laborFactory overheadbased on 100% of normalcapacity of 2,000 directlabor hrs:Variable cost, $4.00$8.200 variable costFixed cost, $6.00$12,000 fixed cost

Fixed factory overhead volume variance is the difference between the budgeted and applied fixed…

Variable factory overhead controllable variance: Actual variable FO cost incurred 8,200 Budgeted variable FO cost for 2,080 hrs. 8,320 Variance (120) favorable Fixed factory overhead volume variance: Hours at normal capacity 2,000 Standard hours for amount produced Productive capacity not used Standard fixed FO cost rate Variance Total factory overhead cost variance %3D

Variable factory overhead controllable variance: Actual variable FO cost incurred 8,200 Budgeted variable FO cost for 2,080 hrs. 8,320 Variance (120) favorable Fixed factory overhead volume variance: Hours at normal capacity 2,000 Standard hours for amount produced Productive capacity not used Standard fixed FO cost rate Variance Total factory overhead cost variance %3D

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter13: Budgeting And Standard Costs

Section: Chapter Questions

Problem 13.7P

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Recording standards in accounts Cioffi Manufacturing Company incorporates standards in its accounts and identifies variances at the time the manufacturing costs are incurred. Journalize the entries to record the following transactions: A. Purchased 2,450 units of copper tubing on account at 52.00 per unit. The standard price is 48.50 per unit. B. Used 1,900 units of copper tubing in the process of manufacturing 200 air conditioners. Ten units of copper tubing are required, at standard, to produce one air conditioner.
Activity-based department rate product costing and product cost distortions Big Sound Inc. manufactures two products: receivers and loud-speakers. The factory overhead incurred is as follows: Indirect labor 400,400 Cutting Department 198,800 Finishing Department 114,800 Total 714,000 The activity base associated with the two production departments is direct labor hours. The indirect labor can be assigned to two different activities as follows: Activity Budgeted Activity Cost Activity Base Setup 138,600 Number of setup Quality Control 261,800 Number of inspections Total 400,400 The activity-base usage quantities and units produced for the two products follow: Number o Setup Number of Inspections Direct Labor HoursSubassembly Direct Labor HoursFinal Assembly Units Produced Snowboards 430 5,000 4,000 2,000 6,000 Skis _70 2,500 2,000 4,000 6,000 Total 500 7,500 6,000 6,000 12,000 Instructions 1. Determine the factory overhead rates under the multiple production department rate method. Assume that indirect labor is associated with the production departments, so that the total factory overhead is 5420,000 and 294,000 for the Subassembly and Final Assembly departments, respectively. 2. Determine the total and per-unit factory overhead costs allocated to each product, using the multiple production department overhead rates in (1). 3. Determine the activity rates, assuming that the indirect labor is associated with activities rather than with the production departments. 4. Determine the total and per-unit cost assigned to each product under activity-based costing. 5. Explain the difference in the per-unit overhead allocated to each product under the multiple production department factory overhead rate and activity-based costing methods.
Activity-based and department rate product costing and product cost distortions Black and Blue Sports Inc. manufactures two products: snowboards and skis. The factory overhead incurred is as follows: Indirect labor 507,000 Cutting Department 156,000 Finishing Department 192,000 Total 855,000 The activity hase associated with the two production departments is direct labor hours. The indirect labor can be assigned to two different activities as follows: Activity Budgeted Activity Cost Activity Base Production control 237,000 Number of production runs Materials handling 270,000 Number of moves Total 507,000 The activity-base usage quantities and units produced for the two products follow: Number o Production Runs Number of Moves Direct Labor HoursCutting Direct Labor HoursFinishing Units Produced Snowboards 430 5,000 4,000 2,000 6,000 Skis _70 2,500 2,000 4,000 6,000 Total 500 7,500 6,000 6,000 12,000 Instructions 1. Determine the factory overhead rates under the multiple production department rate method. Assume that indirect labor is associated with the production departments, so that the total factory overhead is 315,000 and 540,000 for the Cutting and finishing departments, respectively. 2. Determine the total and per-unit factory overhead costs allocated to each product, using the multiple production department overhead rates in (1). 3. Determine the activity rates, assuming that the indirect labor is associated with activities rather than with the production departments. 4. Determine the total and per-unit cost assigned to each product under activity-based costing. 5. Explain the difference in the per-unit overhead allocated to each product under the multiple production department factory overhead rate and activity-based costing methods.
Recording standards in accounts Cioffi Manufacturing Company incorporates standards in its accounts and identifies variances at the time the manufacturing costs are incurred. Journalize the entries to record the following transactions: a.Purchased 2,450 units of copper tubing on account at 52.00 per unit. The standard price is 48.50 per unit. b.Used 1,900 units of copper tubing in the process of manufacturing 200 air conditioners. Ten units of copper tubing are required, at standard, to produce one air conditioner.
Recording standards in accounts Cioffi Manufacturing Company incorporates standards in its accounts and identifies variances at the time the manufacturing costs are incurred. Journalize the entries to record the following transactions: A. Purchased 2,450 units of copper tubing on account at 52.00 per unit. The standard price is 48.50 per unit. B. Used 1,900 units of copper tubing in the process of manufacturing 200 air conditioners. Ten units of copper tubing are required, at standard, to produce one air conditioner.
(Appendix 3A) Separating Fixed and Variable Costs, Service Setting Louise McDermott, controller for the Galvin plant of Veromar Inc., wanted to determine the cost behavior of moving materials throughout the plant. She accumulated the following data on the number of moves (from 100 to 800 in increments of 100) and the total cost of moving materials at those levels of moves: Required: 1. Prepare a scattergraph based on these data. Use cost for the vertical axis and number of moves for the horizontal axis. Based on an examination of the scattergraph, does there appear to be a linear relationship between the total cost of moving materials and the number of moves? 2. Compute the cost formula for moving materials by using the high-low method. Calculate the predicted cost for a month with 550 moves by using the high-low formula. (Note: Round the answer for the variable rate to three decimal places and the answer for total fixed cost and total cost to the nearest dollar.) 3. CONCEPTUAL CONNECTION Compute the cost formula for moving materials using the method of least squares. (Note: For the method of least squares, round the variable rate to two decimal places and total fixed cost and total cost to the nearest dollar.) Using the regression cost formula, what is the predicted cost for a month with 550 moves? What does the coefficient of determination tell you about the cost formula computed by regression? 4. CONCEPTUAL CONNECTION Evaluate the cost formula using the least squares coefficients. Could it be improved? Try dropping the third data point (300, 3,400), and rerun the regression.