Financial and Managerial Accounting - Workingpapers
15th Edition
ISBN: 9781337912112
Author: WARREN
Publisher: CENGAGE L
expand_more
expand_more
format_list_bulleted
Textbook Question
Chapter 23, Problem 2PB
Flexible
I’m Really Cold Coat Company makes women’s and men’s coats. Both products require filler and lining material. The following planning information has been made available:
I’m Really Cold Coat Company does not expect there to be any beginning or ending inventories of filler and lining material. At the end of the budget year, I’m Really Cold Coat Company experienced the following actual results:
The expected beginning inventory and desired ending inventory were realized.
Instructions
- 1. Prepare the following variance analyses for both coats and the total, based on the actual results and production levels at the end of the budget year:
- A. Direct materials price, quantity, and total variance.
- B. Direct labor rate, time, and total variance.
- 2. Why are the standard amounts in part (1) based on the actual production at the end of the year instead of the planned production at the beginning of the year?
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
Flexible budgeting and variance analysisI Love My Chocolate Company makes dark chocolate and lightchocolate. Both products require cocos and sugar. The followingplanning information has been made available: (8.PNG)
I Love My Chocolate Company does not expect there to be anybeginning or ending inventories of cocoa or sugar. At the end of thebudget year, I Love My Chocolate Company had the following actualresults: (9.PNG)
Instructions1. Prepare the following variance analyses for both chocolates and thetotal, based on the actual results and production levels at the end of thebudget year:
a. Direct materials price, quantity, and total varianceb. Direct labor rate, time, and total variance2. Why are the standard amounts in part (1) based on the actualproduction for the year instead of the planned production for the year?
Flexible Budgets, Overhead Cost Variances, and Management Control
Fixed manufacturing overhead variance analysis
The Sourdough Bread Company bakes baguettes for distribution to upscale grocery stores. The company has two direct-cost categories: direct materials and direct manufacturing labor. The Sourdough Bread Company allocates fixed manufacturing overhead to products on the basis of standard direct manufacturing labor-hours. The following is some budget data for the Sourdough Bread Company for 2020.
Direct manufacturing labor use
0.02
hours per baguette
Fixed manufacturing overhead
$3.00
per direct manufacturing labor-hour
The following is additional information for the Sourdough Bread Company for the year ended December 31, 2020:
Planned (budgeted) output
3,100,000
baguettes
Actual production
2,600,000
baguettes
Budgeted direct manufacturing labor
62,000
hours
Actual direct manufacturing labor…
Flexible Budgeting and Variance Analysis
I'm Really Cold Coat Company makes women's and men's coats. Both products require filler and lining material. The following planning information has been made available:
Standard Amount per Unit
Women’s Coats
Men’s Coats
Standard Price per Unit
Filler
4.0 lbs.
5.20 lbs.
$2.00 per lb.
Liner
7.00 yds.
9.40 yds.
8.00 per yd.
Standard labor time
0.40 hr.
0.50 hr.
Women’s Coats
Men’s Coats
Planned production
5,000 units
6,200 units
Standard labor rate
$14.00 per hr.
$13.00 per hr.
I'm Really Cold Coat Company does not expect there to be any beginning or ending inventories of filler and lining material. At the end of the budget year, I'm Really Cold Coat Company experienced the following actual results:
Women’s Coats
Men’s Coats
Actual production
4,400
5,800
Actual Price per Unit
Actual Quantity Purchased and Used
Filler
$1.90 per lb.
48,000
Liner…
Chapter 23 Solutions
Financial and Managerial Accounting - Workingpapers
Ch. 23 - What are the basic objectives in the use of...Ch. 23 - What is meant by reporting by the principle of...Ch. 23 - Prob. 3DQCh. 23 - Prob. 4DQCh. 23 - A. What are the two variances between the actual...Ch. 23 - A new assistant controller recently was heard to...Ch. 23 - Would the use of standards be appropriate in a...Ch. 23 - Prob. 8DQCh. 23 - At the end of the period, the factory overhead...Ch. 23 - If variances are recorded in the accounts at the...
Ch. 23 - Direct materials variances Bellingham Company...Ch. 23 - Direct labor variances Bellingham Company produces...Ch. 23 - Factory overhead controllable variance Bellingham...Ch. 23 - Factory overhead volume variance Bellingham...Ch. 23 - Standard cost journal entries Bellingham Company...Ch. 23 - Income statement with variances Prepare an income...Ch. 23 - Crazy Delicious Inc. produces chocolate bars. The...Ch. 23 - Atlas Furniture Company manufactures designer home...Ch. 23 - Salisbury Bottle Company manufactures plastic...Ch. 23 - The following data relate to the direct materials...Ch. 23 - De Soto Inc. produces tablet computers. The...Ch. 23 - Standard direct materials cost per unit from...Ch. 23 - H.J. Heinz Company uses standards to control its...Ch. 23 - Direct labor variances The following data relate...Ch. 23 - Glacier Bicycle Company manufactures commuter...Ch. 23 - Ada Clothes Company produced 40,000 units during...Ch. 23 - Mexicali On the Go Inc. owns and operates food...Ch. 23 - Direct materials and direct labor variances At the...Ch. 23 - Flexible overhead budget Leno Manufacturing...Ch. 23 - Flexible overhead budget Wiki Wiki Company has...Ch. 23 - Factory overhead cost variances The following data...Ch. 23 - Thomas Textiles Corporation began November with a...Ch. 23 - Prob. 17ECh. 23 - Factory overhead cost variance report Tannin...Ch. 23 - Recording standards in accounts Cioffi...Ch. 23 - Prob. 20ECh. 23 - Income statement indicating standard cost...Ch. 23 - Rockport Industries Inc. gathered the following...Ch. 23 - Dickinsen Company gathered the following data for...Ch. 23 - Rosenberry Company computed the following revenue...Ch. 23 - Lowell Manufacturing Inc. has a normal selling...Ch. 23 - Shasta Fixture Company manufactures faucets in a...Ch. 23 - Flexible budgeting and variance analysis I Love My...Ch. 23 - Direct materials, direct labor, and factory...Ch. 23 - Factory overhead cost variance report Tiger...Ch. 23 - CodeHead Software Inc. does software development....Ch. 23 - Direct materials and direct labor variance...Ch. 23 - Flexible budgeting and variance analysis Im Really...Ch. 23 - Direct materials, direct labor, and factory...Ch. 23 - Factory overhead cost variance report Feeling...Ch. 23 - Prob. 5PBCh. 23 - Prob. 1COMPCh. 23 - Advent Software uses standards to manage the cost...Ch. 23 - Admissions time variance Valley Hospital began...Ch. 23 - United States Postal Service: Mail sorting time...Ch. 23 - Direct labor time variance Maywood City Police...Ch. 23 - Ethics in action Dash Riprock is a cost analyst...Ch. 23 - Variance interpretation Vanadium Audio Inc. is a...Ch. 23 - MinnOil performs oil changes and other minor...Ch. 23 - Prob. 2CMACh. 23 - Frisco Company recently purchased 108,000 units of...Ch. 23 - JoyT Company manufactures Maxi Dolls for sale in...
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Flexible budgeting and variance analysis I Love My Chocolate Company makes dark chocolate and light chocolate. Both products require cocoa and sugar. The following planning information has been made available: I Love My Chocolate Company does not expect there to be any beginning or ending inventories of cocoa or sugar. At the end of the budget year, I Love My Chocolate Company had the following actual results: Instructions 1. Prepare the following variance analyses for both chocolates and the total, based on the actual results and production levels at the end of the budget year: A. Direct materials price, quantity, and total variance. B. Direct labor rate, time, and total variance. 2. Why are the standard amounts in part (1) based on the actual production for the year instead of the planned production for the year?arrow_forwardUchdorf Manufacturing just completed a study of its purchasing activity with the objective of improving its efficiency. The driver for the activity is number of purchase orders. The following data pertain to the activity for the most recent year: Activity supply: five purchasing agents capable of processing 2,400 orders per year (12,000 orders) Purchasing agent cost (salary): 45,600 per year Actual usage: 10,600 orders per year Value-added quantity: 7,000 orders per year Required: 1. Calculate the volume variance and explain its significance. 2. Calculate the unused capacity variance and explain its use. 3. What if the actual usage drops to 9,000 orders? What effect will this have on capacity management? What will be the level of spending reduction if the value-added standard is met?arrow_forwardFlexible Budgeting and Variance Analysis I'm Really Cold Coat Company makes women's and men's coats. Both products require filler and lining material. The following planning information has been made available: Standard Amount per Unit Women’s Coats Men’s Coats Standard Price per Unit Filler 4.0 lbs. 5.20 lbs. $2.00 per lb. Liner 7.00 yds. 9.40 yds. 8.00 per yd. Standard labor time 0.40 hr. 0.50 hr. Women’s Coats Men’s Coats Planned production 5,000 units 6,200 units Standard labor rate $14.00 per hr. $13.00 per hr. I'm Really Cold Coat Company does not expect there to be any beginning or ending inventories of filler and lining material. At the end of the budget year, I'm Really Cold Coat Company experienced the following actual results: Women’s Coats Men’s Coats Actual production 4,400 5,800 Actual Price per Unit Actual Quantity Purchased and Used Filler $1.90 per lb. 48,000 Liner…arrow_forward
- Titanium Blades refines titanium for use in all brands of razor blades. It prepared a static budget for the sales of 5,500 units. The following variances were observed: Units Sales Variable Expenses Fixed Expenses Net Income (loss) Units Sales Actual Results Determine the static budget and use the information to prepare a flexible budget and analysis for the 6,500 units actually sold. If no effect, select "No Effect" and leave the amount boxes blank. For those boxes in which you must enter negative numbers use a minus sign. (Example: -300). Static budget Flexible budget Actual Results Variances Variable Expenses Fixed Expenses Net Income (Loss) Variances $ $169,000 $26,000 Favorable 77,800 11,800 Unfavorable 88,300 300 Unfavorable $2,900 $13,900 Unfavorable No Effect Favorable Unfavorable Unfavorable ✓ ✓ ✓ ✓arrow_forwardSales Variances; Quarter to Quarter Hathaway Products Inc. produces an innovative lighting system used in restaurants and high-end retail stores to provide a pleasing, warm atmosphere.Hathaway produces two versions of the product, called Starlight and Moonlight. Sales managementat Hathaway wants to complete a sales performance analysis and has collected the following information for the first quarter (Qtr. 1) and the second quarter (Qtr. 2) of the current fiscal year:Qtr. 2 Qtr. 1Sales units 12,000 10,000Sales mix for each productStarlight 20% 25%Moonlight 80% 75%PriceStarlight $35.00 $35.00Moonlight $85.00 $90.00Variable cost per unitStarlight $22.00 $22.00Moonlight $48.00 $48.00Fixed cost $150,000 $150,000[LO 16-3][LO 16-4]Final PDF to printerChapter 16 Operational Performance Measurement: Further Analysis of Productivity and Sales 701blo17029_ch16_671-712.indd 701 02/20/18 09:50 AMRequired1. Prepare a flexible-budget contribution income statement for Qtr. 2, showing the Qtr. 2…arrow_forwardSurrey Bikes, Inc. manufactures double bench bikes for resorts and other vacation properties. Management now wants the accountants to complete an analysis to compare the budgeted costs to standard costs for 2021. During the year 2021, the company completed 680 bikes. Let's discuss changes from budget and standard that occurred during 2021. Overall, the company was able to increase several efficiencies. However, the company also experienced some increased costs. Use this information to complete the CH24 Budet Variances tab; the green section. Electrical Parts Direct Materials The purchase price, net of discounts increase by $2.50 per set. There was also an increase in freight of by $0.25 per set. Wheel Sets Direct Materials: The company was able to secure…arrow_forward
- Titanium Blades refines titanium for use in all brands of razor blades. It prepared a static budget for the sales of 5,500 units. The following variances were observed: Units Sales Variable Expenses Fixed Expenses Net Income (loss) Units Sales Determine the static budget and use the information to prepare a flexible budget and analysis for the 6,500 units actually sold. If no effect, select "No Effect" and leave the amount boxes blank. For those boxes in which you must nter negative numbers use a minus sign. (Example: -300). > Static budget Flexible budget Variable Expenses Fixed Expenses Actual Results Net Income (Loss) $175,500 $27,000 Favorable 77,800 11,800 Unfavorable 93,800 300 Unfavorable $3,900 $14,900 Unfavorable LA 5,500 ✔ $ 148,500✔ 66,000 X Variances 93,500 X -11,000 ✓ 6,500 $ 175,500 ✓ $ 11,800 X 93,500 X 4,000 Actual Results $ 175,500✔ LA 93,800 X 93,800 X 3,900 ✔ $ tA LA 0 Variances ✓ No Effect 200✔ Favorable 300 X Unfavora 100 X Unfavoraarrow_forwardPLEASE ANSWER THE FOLLOWING QUESTIONS: Requirements 1. Compute the total sales-volume variance, the total sales-mix variance, and the total sales-quantity variance. (Calculate all variances in terms of contribution margin.) Show results for each product in your computations. 2. What inferences can you draw from the variances computed in requirement 1? Data table Budget for 2020 Selling Variable Cost Cartons Product Price per Carton Sold Kostor $11.00 $ Limba $ 23.00 $ 6.40 16.15 Actual for 2020 Selling Variable Cost Cartons Price per Carton Sold 7.40 138,600 16.35 59,400 132,000 $11.60 S 88,000 $ 24.40 $arrow_forwardAccounting Capstone - Budget Performance Variane Report Mastery Problem: Evaluating Variances from Standard Costs Question Content Area Sole Purpose Shoe Company Sole Purpose Shoe Company is owned and operated by Sarah Charles. The company manufactures casual shoes, with manufacturing facilities in your state. Sarah began the business this year, and while she has a great deal of experience in manufacturing popular and comfortable shoes, she needs some help in evaluating her results for the year, and asks for your help. Starting Questions Sarah’s first questions for you have to do with the general ideas and terminology used to evaluate variances. Provide answers to the following questions (1)-(3). 1. Why might Sarah want to use standard costs to compare with her actual costs? a. Standard costs give management a cost structure for products that is applicable for the entire life of the business. b. Standard costs allow management to motivate employees by comparing their…arrow_forward
- lexible budgeting and variance analysis I'm really Cold Coat Company makes women's and men's coals. Both products require filler and lining material. The following planning information has been made available: Standard Amount per Unit Women's Coats Men's Coats Standard Price per unit Filler 4.0lb 5.2lb $2.00 per lb Linear 7.0yds 9.4yds 8.00 per yd. Standard labor time 0.40hr. 0.50hr Women s coats Men's coats Planned Production 5.000 units 6,200 units Standard labor rate S14.00 per hr, $13.00 per hr. I am Really Cold Coal Company does not expect there to be any beginning or ending inventories of filler and lining material. At the end of the budget year. I'm Really Cold Coal Company experienced the following actual results: Women's coat Men's Coats Actual Production 4.400 5,800 Actual Price per unit Actual Quantatity Purchased and Used Filler $1.90 per lb 48.000 Liner 8.20 per yd. 85,100 Actual Labor Rate…arrow_forwardSunshine Goods Ltd is a revenue maximizing firm that engages in the analysis of variances to provide useful information to management. The company manufactures and sells three (3) products, RG, KC and MG. During July 2019 the following budgeted and actual results were presented to you the management accountant for analysis: Budgeted Results Product Total Sales $ Volume/units Price $ Contribution margin per unit $ Total contribution margin $ RG 585,000 900 650 820 738,000 KC 500,000 500 1,000 850 425,000 MG 300,000 600 500 720 432,000 Total 2,000 1,595,000 Actual Results Product Total Sales $ Volume/units Price $ Contribution margin per unit $ Total contribution margin $ RG 500,000 500 1,000 800 400,000 KC 270,000 300 900 `900 270,000 MG 105,000 350 300 700 245,000 Total 1,150 915,000 Required: Sales margin quantity…arrow_forwardSunshine Goods Ltd is a revenue maximizing firm that engages in the analysis of variances to provide useful information to management. The company manufactures and sells three (3) products, RG, KC and MG. During July 2019 the following budgeted and actual results were presented to you the management accountant for analysis: Budgeted Results Product Total Sales $ Volume/units Price $ Contribution margin per unit $ Total contribution margin $ RG 585,000 900 650 820 738,000 KC 500,000 500 1,000 850 425,000 MG 300,000 600 500 720 432,000 Total 2,000 1,595,000 Actual Results Product Total Sales $ Volume/units Price $ Contribution margin per unit $ Total contribution margin $ RG 500,000 500 1,000 800 400,000 KC 270,000 300 900 `900 270,000 MG 105,000 350 300 700 245,000 Total 1,150 915,000 Required: Sales margin price…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Financial And Managerial AccountingAccountingISBN:9781337902663Author:WARREN, Carl S.Publisher:Cengage Learning,Managerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College PubCornerstones of Cost Management (Cornerstones Ser...AccountingISBN:9781305970663Author:Don R. Hansen, Maryanne M. MowenPublisher:Cengage Learning
Financial And Managerial Accounting
Accounting
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:Cengage Learning,
Managerial Accounting
Accounting
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:South-Western College Pub
Cornerstones of Cost Management (Cornerstones Ser...
Accounting
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Cengage Learning
What is Risk Management? | Risk Management process; Author: Educationleaves;https://www.youtube.com/watch?v=IP-E75FGFkU;License: Standard youtube license