Managerial Accounting: Tools for Business Decision Making
7th Edition
ISBN: 9781118334331
Author: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
Publisher: WILEY
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Textbook Question
Chapter 10, Problem 10CD
CURRENT DESIGNS
The Current Designs staff has prepared the annual manufacturing budget for the rotomolded line based on an estimated annual production of 4,000 kayaks during 2017. Each kayak will require 54 pounds of polyethylene powder and a finishing kit (rope. seat, hardware, etc.). The polyethylene powder used in these kayaks costs $1.50 per pound, and the finishing kits cost $170 each. Each kayak will use two kinds of labor—2 hours of type I labor from people who run the oven and trim the plastic, and 3 hours of work from type II workers who attach the hatches and seat and other hardware. The type 1 employees are paid S15 per hour, and the type II are paid $12 per hour.
Manufacturing overhead is budgeted at $396,000 for 2017, broken down as follows.
| Variable costs | |
| Indirect materials | $ 40,000 |
| Manufacturing supplies | 53,800 |
| Maintenance and utilities | 88,000 |
| 181,800 | |
| Fixed costs | |
| Supervision | 90,000 |
| Insurance | 14,400 |
| 109,800 | |
| 214,200 | |
| Total | $396,000 |
During the first quarter, ended March 31, 2017, 1,050 units were actually produced with the following costs.
| Polyethylene powder | $ 87,000 |
| Finishing kits | 178,840 |
| Type I labor | 31,500 |
| Type II labor | 39,060 |
| Indirect materials | 10,500 |
| Manufacturing supplies | 14,150 |
| Maintenance and utilities | 26,000 |
| Supervision | 20,000 |
| Insurance | 3,600 |
| Depreciation | 27,450 |
| Total | $438,100 |
Instructions
(a) Prepare the annual manufacturing budget for 2017, assuming that 4,000 kayaks will be produced.
(b) Prepare the flexible budget for manufacturing for the quarter ended March 31, 2017. Assume activity levels of 900, 1,000, and 1,050 units.
(c) Assuming the rotomolded line is treated as a profit center, prepare a flexible budget report for manufacturing for the quarter ended March 31, 2017, when 1,050 units were produced.
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The Current Designs staff has prepared the annual manufacturing budget for the rotomolded line based on an estimated annual production of 3,440 kayaks during 2020. Each kayak will require 54 pounds of polyethylene powder and a finishing kit (rope, seat, hardware, etc.). The polyethylene powder used in these kayaks costs $1.10 per pound, and the finishing kits cost $250 each. Each kayak will use two kinds of labor—2 hours of type I labor from people who run the oven and trim the plastic, and 3 hours of work from type II workers who attach the hatches and seat and other hardware. The type I employees are paid $14 per hour, and the type II are paid $11 per hour.Manufacturing overhead is budgeted at $390,400 for 2020, broken down as follows.
Variable costs
Indirect materials
$41,280
Manufacturing supplies
44,720
Maintenance and utilities
86,000
172,000
Fixed costs
Supervision
96,000
Insurance
14,400
Depreciation
108,000…
Skulas, Inc., manufactures and sells snowboards. Skulas manufactures a single model, the Pipex. In late 2017, Skulas’s management accountant gathered the following data to prepare budgets for January 2018:
Materials and Labor Requirement
Direct Materials
Wood 9 Boards Feet (b.f.) per snowboard
Fiberglass 10 Yards per snowboard
Direct manufacturing labor 5 hours per snowboard
Skulas’s CEO expects to sell 2,900 snowboards during January 2018 at an estimated retail price of $650 per board. Further, the CEO expects 2018 beginning inventory of 500 snowboards and would like to end January 2018 with 200 snowboards in stock.
Direct Materials Inventories
Begining Inventory 1/1/2018 Ending Inventory 1/31/2018
Wood 2,040 b.f. 1,540 b.f.
Fiberglass 1,040 yards 2,040 yards
Alternative Text Variable manufacturing…
Skulas, Inc., manufactures and sells snowboards. Skulas manufactures a single model, the Pipex. In late 2017, Skulas’s management accountant gathered the following data to prepare budgets for January 2018:
Materials and Labor Requirement
Direct Materials
Wood 9 Boards Feet (b.f.) per snowboard
Fiberglass 10 Yards per snowboard
Direct manufacturing labor 5 hours per snowboard
Skulas’s CEO expects to sell 2,900 snowboards during January 2018 at an estimated retail price of $650 per board. Further, the CEO expects 2018 beginning inventory of 500 snowboards and would like to end January 2018 with 200 snowboards in stock.
Direct Materials Inventories
Begining Inventory 1/1/2018 Ending Inventory 1/31/2018
Wood 2,040 b.f. 1,540 b.f.
Fiberglass 1,040 yards 2,040 yards
Alternative Text Variable manufacturing…
Chapter 10 Solutions
Managerial Accounting: Tools for Business Decision Making
Ch. 10 - Prob. 1QCh. 10 - The following purposes are part of a budgetary...Ch. 10 - How may a budget report for the second quarter...Ch. 10 - Ken Bay questions the usefulness of a master sales...Ch. 10 - Under what circumstances may a static budget be an...Ch. 10 - A flexible budget is really a series of static...Ch. 10 - The static manufacturing overhead budget based on...Ch. 10 - A static overhead budget based on 40,000 direct...Ch. 10 - Megan Pedigo is confused about how a flexible...Ch. 10 - Call Company has prepared a graph of flexible...
Ch. 10 - The flexible budget formula is fixed costs 50,000...Ch. 10 - What is management by exception? What criteria may...Ch. 10 - What is responsibility accounting? Explain the...Ch. 10 - Prob. 14QCh. 10 - Distinguish between controllable and...Ch. 10 - How do responsibility reports differ from budget...Ch. 10 - Prob. 17QCh. 10 - Distinguish among the three types of...Ch. 10 - Prob. 19QCh. 10 - Prob. 20QCh. 10 - Prob. 21QCh. 10 - Prob. 22QCh. 10 - Prob. 23QCh. 10 - Prob. 24QCh. 10 - Prob. 25QCh. 10 - Prob. 26QCh. 10 - For the quarter ended March 31, 2017, Croix...Ch. 10 - Data for Croix Company are given in BE10-1. In the...Ch. 10 - In Rooney Company, direct labor is 20 per hour....Ch. 10 - Gundy Company expects to produce 1,200,000 units...Ch. 10 - Data for Gundy Company are given in BE10-4. In...Ch. 10 - In the Assembly Department of Hannon Company,...Ch. 10 - Torres Company accumulates the following summary...Ch. 10 - For the year ending December 31, 2017, Cobb...Ch. 10 - Prob. 10.9BECh. 10 - Prob. 10.10BECh. 10 - Prob. 10.11BECh. 10 - Prob. 10.12BECh. 10 - Wade Company estimates that it will produce 6,000...Ch. 10 - In Pargo Company's flexible budget graph, the...Ch. 10 - Prob. 10.3DICh. 10 - Prob. 10.4DICh. 10 - Connie Rice has prepared the following list of...Ch. 10 - Crede Company budgeted selling expenses of 30,000...Ch. 10 - Myers Company uses a flexible budget for...Ch. 10 - Using the information in E10-3. assume that in...Ch. 10 - Fallon Company uses flexible budgets to control...Ch. 10 - The actual selling expenses incurred in March 2017...Ch. 10 - Appliance Possible Inc. (AP) is a manufacturer of...Ch. 10 - Rensing Groomers is in the dog-grooming business....Ch. 10 - As sales manager, Joe Batista was given the...Ch. 10 - Chubbs Inc.'s manufacturing overhead budget for...Ch. 10 - UrLink Company is a newly formed company...Ch. 10 - Venetian Company has two production departments....Ch. 10 - Fey Company's Organization chart includes the...Ch. 10 - The Mixing Department manager of Malone Company is...Ch. 10 - Horatio Inc. has three divisions which are...Ch. 10 - The Sports Equipment Division of Harrington...Ch. 10 - The South Division of Wiig Company reported the...Ch. 10 - The Dinkle and Frizell Denial Clinic provides both...Ch. 10 - The Ferrell Transportation Company uses a...Ch. 10 - Presented below is selected information for three...Ch. 10 - Presenled below is selected financial information...Ch. 10 - Bumblebee Company estimates that 300,000 direct...Ch. 10 - Zelmer Company manufactures tablecloths. Sales...Ch. 10 - Ratchet Company uses budgets in controlling costs....Ch. 10 - Clarke Inc. operates the Patio Furniture Division...Ch. 10 - Optimus Company manufactures a variety of tools...Ch. 10 - Durham Company uses a responsibility reporting...Ch. 10 - Sentinel Industries has manufactured prefabricated...Ch. 10 - CURRENT DESIGNS The Current Designs staff has...Ch. 10 - Green Pastures is a 400-acre farm on the outskirts...Ch. 10 - Prob. 10.2BYPCh. 10 - Prob. 10.3BYPCh. 10 - The manufacturing overhead budget for Fleming...Ch. 10 - Ethics Case American Products Corporation...Ch. 10 - Considering Your Costs and Benefits Preparing a...
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