Managerial Accounting: Creating Value in a Dynamic Business Environment
12th Edition
ISBN: 9781260417074
Author: HILTON, Ronald
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Chapter 11, Problem 35P
Calgary Paper Company produces paper for photocopiers. The company has developed standard over head rates based on a monthly capacity of 180,000 direct-labor hours as follows:
During April, 90,000 units were scheduled for production: however, only 80,000 units were actually produced. The following data relate to April.
- 1. Actual direct-labor cost incurred was $1,567,500 for 165,000 actual hours of work.
- 2. Actual overhead incurred totaled $1,371,500, of which $511,500 was variable and $860,000 was fixed.
Required: Prepare two exhibits similar to Exhibits 11–6 and 11–8 in the chapter, which show the following variances. State whether each variance is favorable or unfavorable, where appropriate.
- 1. Variable-overhead spending variance.
- 2. Variable-overhead efficiency variance.
- 3. Fixed-overhead
budget variance . - 4. Fixed-overhead volume variance.
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The Standard manufacturing corporation uses a standard cost system in accounting for the cost of its only product. The standard cost per unit( based on 10,000 units production) was set up as follows: Direct materials, 10 kgs @11/kg; Direct labor, 8 hours @50 per hour; Factory overhead,8 hours @ 15 per hour. The following data on the operations appear in the company's record for the month of July: Units completed during the month, 8,000 units; units in process at the end of the month, with 100% materials but half completed, 1,000 units; Direct materials used, 95,000 kgs @P10 per kg; Direct labor, P3,510,000 at a rate of P54; ACtual overhead for the month P985,000. Compute for the Variable efficiency variance. Indicate whether favorable or unfavorable.
Calgary Paper Company produces paper for photocopiers. The company has developed standard overhead rates based on a monthly capacity of 62,000 direct-labor hours as follows:
Standard costs per unit (one box of paper):
Variable overhead (2 direct-labor hours @ $4.5 per hour)
$
9
Fixed overhead (2 direct-labor hours @ $10 per hour)
20
Total
$
29
During April, 31,000 units were scheduled for production; however, only 26,000 units were actually produced. The following data relate to April.
Actual direct-labor cost incurred was $848,000 for 53,000 actual hours of work.
Actual overhead incurred totaled $843,800, of which $243,800 was variable and $600,000 was fixed.
Required:Prepare two exhibits similar to Exhibit 11-6 and Exhibit 11-8 in the chapter, which show the following variances. State whether each variance is favorable or unfavorable, where appropriate.1. Variable-overhead spending variance.2. Variable-overhead efficiency variance.3.…
The standard manufacturing corporation uses a standard cost system in accounting for the cost of its only product. The standard cost per unit (based on 10,000 units production) was set up as follows:
Direct materials, 10kgs @ P11/kg
Direct labor, 8 hours @50 per hour
Factory overhead, 8 hours @15 per hour
The following data on the operations appear in the company’s record for the month of July:
Units completed during the month, 8,000 units
Units in process at the end of the month, with 100% materials but half completed, 1,000 units
Direct material used, 95,000 kgs @10 per kg
Direct labor, P3,510,000 at a rate of P54
Actual Overhead for the month P985,00
Compute for the variable efficiency variance. Indicate whether favorable or unfavorable
Chapter 11 Solutions
Managerial Accounting: Creating Value in a Dynamic Business Environment
Ch. 11 - Distinguish between static and flexible budgets.Ch. 11 - Explain the advantage of using a flexible budget.Ch. 11 - Why are flexible overhead budgets based on...Ch. 11 - Distinguish between a columnar and a formula...Ch. 11 - Show, using T-accounts, how production overhead is...Ch. 11 - How have advances in manufacturing technology...Ch. 11 - What is the interpretation of the...Ch. 11 - Jeffries Companys only variable-overhead cost is...Ch. 11 - What is the interpretation of the...Ch. 11 - Distinguish between the interpretations of the...
Ch. 11 - What is the fixed-overhead budget variance?Ch. 11 - What is the correct interpretation of the...Ch. 11 - Describe a common but misleading interpretation of...Ch. 11 - Draw a graph showing budgeted and applied fixed...Ch. 11 - What types of organizations use flexible budgets?Ch. 11 - What is the conceptual problem of applying fixed...Ch. 11 - Distinguish between the control purpose and the...Ch. 11 - Why are fixed-overhead costs sometimes called...Ch. 11 - Draw a graph showing both budgeted and applied...Ch. 11 - Give one example of a plausible activity base to...Ch. 11 - Explain how an activity-based flexible budget...Ch. 11 - Crystal Glassware Company has the following...Ch. 11 - Refer to the data in the preceding exercise. Use...Ch. 11 - Crystal Glassware Company has the following...Ch. 11 - The following data are the actual results for...Ch. 11 - Evening Star, Inc. produces binoculars of two...Ch. 11 - The controller for Rainbow Childrens Hospital,...Ch. 11 - You recently received the following note from the...Ch. 11 - You brought your work home one evening, and your...Ch. 11 - Refer to DCdesserts.coms activity-based flexible...Ch. 11 - Montoursville Control Company, which manufactures...Ch. 11 - Prob. 33ECh. 11 - The following data pertain to Aurora Electronics...Ch. 11 - Calgary Paper Company produces paper for...Ch. 11 - Gibralter Insurance Company uses a flexible...Ch. 11 - Country time Studios is a recording studio in...Ch. 11 - Newark Plastics Corporation developed its overhead...Ch. 11 - Johnson Electrical produces industrial ventilation...Ch. 11 - Fall City Hospital has an outpatient clinic....Ch. 11 - Maxwell Company uses a standard cost accounting...Ch. 11 - Mark Fletcher, president of SoftGro, Inc., was...Ch. 11 - LawnMate Company manufactures power mowers that...Ch. 11 - For each of the following independent Cases A and...Ch. 11 - Prob. 45PCh. 11 - Prob. 46PCh. 11 - WoodCrafts, Inc. is a manufacturer of furniture...Ch. 11 - Rutherford Wheel and Axle, Inc. has an automated...Ch. 11 - Chillco Corporation produces containers of frozen...Ch. 11 - Montreal Scholastic Supply Company uses a...Ch. 11 - College Memories, Inc. publishes college...Ch. 11 - While Mountain Sled Company manufactures childrens...Ch. 11 - Cleveland Computer Accessory Company (CCAC)...Ch. 11 - Prob. 54CCh. 11 - Prob. 55C
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What is variance analysis?; Author: Corporate finance institute;https://www.youtube.com/watch?v=SMTa1lZu7Qw;License: Standard YouTube License, CC-BY