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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Textbook Question
Chapter 11, Problem 49P
Chillco Corporation produces containers of frozen food. During April, Chillco produced 1,450 cases of food and incurred the following actual costs.
Overhead is budgeted and applied using direct-labor hours in a
Required:
- 1. Prepare as complete an
analysis of cost variances as is possible from the available data. - 2. Build a spreadsheet: Construct an Excel spreadsheet to solve the preceding requirement. Show how the solution will change if the following information changes: the standard rates were $17.50 per hour for direct labor, and $1.60 per direct-labor hour for variable overhead.
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Fire King manufactures safes- mobile safes, and walk-in stationary bank safes. As part of its annual budgeting process, Custer is analyzing the profitability of its two products. Part of this analysis involves estimating the amount of overhead to be allocated to each product line. The following information relates to overhead.
(a) The total estimated manufacturing overhead was $235,000. Under traditional costing (which assigns overhead on the basis of direct-labor hours), what amount of manufacturing overhead costs are assigned to One mobile safe?
The total estimated manufacturing overhead of $235,000 was comprised of $150,000 for material-handling costs and $85,000 for purchasing activity costs.
Under activity-based costing (ABC):
(b) What amount of material handling costs are assigned to One mobile safe?
(c) What amount of purchasing activity costs are assigned to One mobile safe?
Scrumptious Snaks Inc. manufactures three types of snak foods:tortilla chips, potato chips, and pretzels. The company has budgeted thefollowing costs for the upcoming periods:
Factory overhead is allocated to the three products on the basis ofprocessing hours. The Products had the following production budgetand processing hours per case:
a. Determine the single plantwide factory overhead rate.b. Use the overhead rate in (a) to determine the amount of total andper-case overhead allocated to each of the three products undergenerally accepted accounting principles.
Chillco Corporation produces contalners of frozen food. During April, Chillco produced 720 cases of food and Incurred the following
actual costs.
$ 5,600
21,000
69,750
34,500
variable overhead
Fixed overhead
Actual labor cost (4,500 direct-labor hours)
Actual material cost (15,000 pounds purchased and used)
Overhead is budgeted and applied using direct-labor hours In a standard costing system. Standard cost and annual budget
Information are as follows:
standard Costs per Case
$ 90.e0
Direct labor (6 hours at $15 per hour)
Direct material (20 pounds at $2.10 per pound)
Variable overhead (6 direct-labor hours at $1.60 per hour)
Fixed overhead (6 direct-labor hours at $4 per hour)
42.00
9.60
24.e0
Total
$165.60
Annual Budget Information
$ 96,000
$240, 000
60, 000 direct-labor hours
Variable overhead
Fixed overhead
Planned activity for year
Requlred:
Compute the following cost varlances from the avallable data. (Indicate the effect of each varlance by selecting "Favorable" or…
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