MANAGERIAL ACCOUNTING W/CONNECT
16th Edition
ISBN: 9781260586916
Author: Garrison
Publisher: MCG CUSTOM
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Chapter 9, Problem 17E
EXERCISE 9-17 Flexible Budget Performance Report LO9-1, LO9-2, LO9-3, LO9-4
AirQual Test Corporation provides on-site air quality testing services. The company has provided the following cost formulas and actual results for the month of February:
| Fixed Component per Month |
Variable Component per Job | Actual Total for February |
|
| Revenue | $360 | $18,950 | |
| Technician wages | $6,400 |
$6,450 | |
| Mobile lab operating expenses | $2,900 |
$35 | $4,530 |
| Office expenses | $2,600 |
$2 | $3,050 |
| Advertising expenses | $970 |
$995 | |
| Insurance | $1,680 |
$1,680 | |
| Miscellaneous expenses | $500 |
$3 | $465 |
The company uses the number of jobs as its measure of activity. For example, mobile lab operating expenses should be $2,900 plus $35 per job. and the actual mobile lab operating expenses for February' w’ere $4,530. The company expected to work 50 jobs in February', but actually worked 52 jobs.
Required:
Using Exhibit 9-8 as your guide, prepare a flexible budget performance report showing AirQual Test Corporation's revenue and spending variances and activitv variances for February.
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Question Content Area
Pinnacle Corp. budgeted $265,170 of overhead cost for the current year. Actual overhead costs for the year were $245,850. Pinnacle's plantwide allocation base, machine hours, was budgeted at 49,430 hours. Actual machine hours were 49,970. A total of 104,380 units was budgeted to be produced and 98,000 units were actually produced. Pinnacle's plantwide factory overhead rate for the current year is:
a.$2.36 per machine hour
b.$2.54 per machine hour
c.$4.97 per machine hour
d.$5.36 per machine hour
Exercise 11-30 (Algo) Cost Allocation: Step Method (LO 11-3)
Caro Manufacturing has two production departments, Machining and Assembly, and two service departments, Maintenance and Cafeteria. Direct costs for each department and the proportion of service costs used by the various departments for the month of August follow:
Proportion of Services Used by
Department
Direct Costs
Maintenance
Cafeteria
Machining
Assembly
Machining
$
115,000
Assembly
70,000
Maintenance
55,000
—
0.2
0.5
0.3
Cafeteria
35,000
0.6
—
0.2
0.2
Required:
Use the step method to allocate the service costs, using the following:
a. The order of allocation starts with Maintenance.
b. The allocations are made in the reverse order (starting with Cafeteria).
Exercise 17-9 (Algo) Allocating overhead using plantwide rate and departmental rates LO P1, P2
Laval produces lighting fixtures. Budgeted information for its two production departments follows. The departments use machine hours (MH) and direct labor hours (DLH).
Fabricating
Assembly
Overhead cost
$ 1,000,000
$ 384,000
Direct labor hours
125,000
DLH
48,000
DLH
Machine hours
100,000
MH
82,500
MH
Laval reports the following for one of its products, a desk lamp.
Number of Units
Fabricating Department
Assembly Department
Direct Labor Hours per Unit
Machine Hours per Unit
Direct Labor Hours per Unit
Machine Hours per Unit
Desk lamp
5,000
4
DLH per unit
2
MH per unit
1
DLH per unit
0.4
MH per unit
Required:1. Determine the plantwide overhead rate using 173,000 direct labor hours as the allocation base.2. Determine the overhead cost per unit for the desk lamp using the plantwide overhead rate.3. Compute departmental overhead rates based on machine hours in the…
Chapter 9 Solutions
MANAGERIAL ACCOUNTING W/CONNECT
Ch. 9 - Prob. 1QCh. 9 - What is a flexible budget and how does it differ...Ch. 9 - Prob. 3QCh. 9 - Why is it difficult to interpret a difference...Ch. 9 - What is an activity variance and what does it...Ch. 9 - What is a revenue variance and what does it mean?Ch. 9 - 9-7 What is a spending variance and what does it...Ch. 9 - 9-8 What does a flexible budget performance report...Ch. 9 - How does a flexible budget based on two cost...Ch. 9 - 9-10 What assumption is implicitly made about cost...
Ch. 9 - 9-11 What assumption is implicitly made about cost...Ch. 9 - The Excel worksheet form that appears below is to...Ch. 9 - The Excel worksheet form that appears below is to...Ch. 9 - Adger Corporation is a service company that...Ch. 9 - Prob. 2F15Ch. 9 - Prob. 3F15Ch. 9 - Adger Corporation is a service company that...Ch. 9 - Adger Corporation is a service company that...Ch. 9 - Adger Corporation is a service company that...Ch. 9 -
L09-1, LO9-2, LO9-3
Adger Corporation is a...Ch. 9 - Prob. 8F15Ch. 9 - Adger Corporation is a service company that...Ch. 9 - Prob. 10F15Ch. 9 - Prob. 11F15Ch. 9 - Prob. 12F15Ch. 9 - Prob. 13F15Ch. 9 - Prob. 14F15Ch. 9 - Prob. 15F15Ch. 9 - Prob. 1ECh. 9 - Prob. 2ECh. 9 -
EXERCISE 9-3 Revenue and Spending Variances...Ch. 9 - Prob. 4ECh. 9 - Prob. 5ECh. 9 - EXERCISE 9-6 Critique a Variance ReportLO9-6 The...Ch. 9 - Prob. 7ECh. 9 - EXERCISE 9-8 Flexible Budgets and Activity...Ch. 9 - Fixed Cost...Ch. 9 - ...Ch. 9 -
EXERCISE 9-11 Flexible Budget L09-1
Refer to the...Ch. 9 - EXERCISE 9-12 Activity Variances LO9-2
Refer to...Ch. 9 - ...Ch. 9 -
EXERCISE 9-14 Prepare a Flexible Budget...Ch. 9 - Prob. 15ECh. 9 -
EXERCISE 9-16 Flexible Budgets and Revenue and...Ch. 9 - EXERCISE 9-17 Flexible Budget Performance Report...Ch. 9 - Prob. 18ECh. 9 - PROBLEM 919: Flexible Budget Performance Reports;...Ch. 9 -
PROBLEM 9-20 Activity and Spending Variances...Ch. 9 - Prob. 21PCh. 9 - Prob. 22PCh. 9 - Prob. 23PCh. 9 -
PROBLEM 9-24 Critiquing a Report; Preparing a...Ch. 9 -
PROBLEM 9-25 Critiquing a Variance Report;...Ch. 9 - PROBLEM 9-26 Critiquing a Cost Report; Preparing a...Ch. 9 - Prob. 27CCh. 9 - ...Ch. 9 - Prob. 29C
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