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Calculating materials and labor variances Learning Objective 3
DLEff. Var. $2,400 F
Matthews Fender, which uses a
Compute the cost and efficiency variances for direct materials and direct labor. Does the pattern of variances suggest Matthews Fender's managers have been making trade-offs? Explain.
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Horngren's Accounting, Student Value Edition (12th Edition)
- Refer to Cornerstone Exercise 8.2 for the production budgets for practice balls and match balls. Every practice ball requires 0.7 square yard of polyvinyl chloride panels, one bladder with valve (to fill with air), and 3 ounces of glue. FlashKicks policy is that 20 percent of the following months production needs for raw materials be in ending inventory. Beginning inventory in January for all raw materials met this requirement. Required: 1. Construct a direct materials purchases budget for each type of raw materials for the practice ball line for January and February of the coming year. 2. What if FlashKick decreased the ending inventory percentage to 15 percent of the next months production needs? What impact would that have on the direct materials purchases budgets prepared in Requirement 1? Refer to Cornerstone Exercise 8.1, through Requirement 1. FlashKick requires ending inventory of product to equal 20 percent of the next months unit sales. Beginning inventory in January was 3,100 practice soccer balls and 400 match soccer balls. Required: 1. Construct a production budget for each of the two product lines for FlashKick Company for the first three months of the coming year. 2. What if FlashKick wanted a production budget for the two product lines for the month of April? What additional information would you need to prepare this budget?arrow_forwardQuestion Content Area I AM NEEDING THE PICTURES ANWSERED THE PASSAGE IS JUST FOR ASSISTANCE TO ANSWER THE QUESTIONS Question Content Area LearnCo LearnCo manufactures and sells one product, an abacus for classroom use, with two models, the Basic model and the Deluxe model. The company began operations on January 1, 20Y1, and is planning for 20Y2, its second year of operations, by preparing budgets from its master budget. The company is trying to decide how many units to manufacture, how much it might spend on direct materials and direct labor, and what their factory overhead expenses might be. In addition, the company is interested in budgeting for selling and administrative costs, and in creating a budgeted income statement showing a prediction of net income for 20Y2. You have been asked to assist the controller of LearnCo in preparing the 20Y2 budgets. Sales Budget The sales budget often uses the prior year’s sales as a starting point, and then sales quantities are revised…arrow_forwardBudgeting; direct material usage, manufacturing cost, and gross margin. Xander ManufacturingCompany manufactures blue rugs, using wool and dye as direct materials. One rug is budgeted to use 36skeins of wool at a cost of $2 per skein and 0.8 gallons of dye at a cost of $6 per gallon. All other materials are indirect. At the beginning of the year Xander has an inventory of 458,000 skeins of wool at a costof $961,800 and 4,000 gallons of dye at a cost of $23,680. Target ending inventory of wool and dye is zero.Xander uses the FIFO inventory cost-flow method.Xander blue rugs are very popular and demand is high, but because of capacity constraints the firmwill produce only 200,000 blue rugs per year. The budgeted selling price is $2,000 each. There are no rugs inbeginning inventory. Target ending inventory of rugs is also zero.Xander makes rugs by hand, but uses a machine to dye the wool. Thus, overhead costs are accumulated in two cost pools—one for weaving and the other for dyeing.…arrow_forward
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