MANAGERIAL ACCOUNTING
16th Edition
ISBN: 9781260901320
Author: Garrison
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Textbook Question
Chapter 9, Problem 8E
EXERCISE 9-8 Flexible Budgets and Activity Variances L09-1, LO9-2
Jake:s Roof Repair has provided the following data concerning its costs:
For example, wages and salaries should be $23,200 plus $16.30 per repair hour. The company expected to work 2.800 repair-hours in May, but actually worked 2.900 repair-hours. The company expects its sales to be $44.50 per repair-hour.
Required:
Compute the company’s activity variances for May. (Hint: Refer to Exhibit 9-6.)
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Myers Company uses a flexible budget for manufacturing overhead based on direct labor hours. Variable manufacturing overhead
costs per direct labor hour are as follows:
Indirect labor
Indirect materials
Utilities
$1.30
0.60
0.20
Fixed overhead costs per month are Supervision $4,000, Depreciation $1,600, and Property Taxes $700. The company believes it will
normally operate in a range of 8,100-11,700 direct labor hours per month.
Prepare a monthly manufacturing overhead flexible budget for 2020 for the expected range of activity, using increments
of 1,200 direct labor hours. (List variable costs before fixed costs.)
MYERS COMPANY
Monthly Manufacturing Overhead Flexible Budget
For the Year 2020
to väry WILH
12 months.
Problem 2
Meng Company is preparing a flexible budget for the next year and requires a
breakdown of the factory maintenance cost into the fixed and variable elements.
The maintenance costs and machine hours (the selected cost driver) for the past six
months are as follows:
Maintenance Costs
P15,500
10,720
15,100
15,840
14,800
10,600
Machine Hours
1,800
1,230
1,740
2,190
1,602
1,590
January
February
March
April
May
June
Required: Compute the following:
1. Estimated variable rate
2. Annual Fixed Costs
Problem 10: Factory Overhead Variance
The following are the standard cost data of Paul Corporation for the month of
January 2020:
a. Each unit of chair requires 0.50 hours of labor time to produce.
b. Variable FOH is applied at the rate of P10 per labor hour.
c. Fixed FOH is applied at the rate of P5 per labor hour, based on expected
annual capacity of 25,000 hours.
Actual Production data:
Number of chairs produced
Actual number of labor hours
Variable FOH cost incurred
Fixed FOH cost incurred
52,000 units
26,500 hours
P270,000
P140,000
Required: Compute the following:
1. Calculate the variances using 1 way approach
2. Calculate the variances using 2 way approaches
3. Calculate the variances using 3 way approaches
4. Calculate the variances using 4 way approaches
Chapter 9 Solutions
MANAGERIAL ACCOUNTING
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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