SDC Accounting 303 - Assignment 2
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® Study.com Accounting 303 - Assignment 2 If you have a Study.com College Saver membership and are seeking college credit for this course, you must submit all required assignments and pass the proctored final exam. You must submit your assignments before registering for the final. Below you will find prompts and instructions for submitting your assignment. About This Assignment Affordable Handbags Company (AHC) has been in business for three years and is growing steadily through an increase in product production. The company creates three handbag-style products: shoulder bags, wallets, and strapless buckle bags. AHC began as a single-person entrepreneurship venture in which the CEO designed each bag design. It uses two assembly lines to build products, as the wallets are assembled separately from the additional handbag styles. Business has increased by direct costs, and the products are marketed and sold online through two different vendors. You have been tasked as a cost accountant to assist AHC in conducting an Overhead and Variance Analysis that identifies product direct costs. Write an essay that includes your findings in 800-1,000 words. Explain your findings as well as the general concepts related to overhead variance analysis. While outside sources are NOT required for this assignment, formatting and citations for all parts of this assignment should be done in APA format. For more information on APA format, please see the following lesson: * What is APA Formatting: Style & Definition e APA Citation: Formats & Examples Prompt Evaluate the standard and actual cost sheets provided to calculate direct product costs for AHC. Allocate the overhead cost and provide a detailed variance analysis including both rate and volume variances for labor, raw materials, and factory overhead. First, calculate the standard dellar costs for the units of output. Then provide a detailed anglysigasima I8 SixwViak RIAHESS- X Required: Read more _r | e Compute the standard dollar costs for the uniis oi output * Compute AHC factory overhead volume variance. e Compute a detailed analysis of AHC Labor using both rate and volume variance.
e Compute a detailed analysis of AHC Raw materials using both rate and volume variance. * Compute a detailed analysis of AHC Factory Overhead using both rate and volume variance. Production & Cost Description Production & Cost Amounts Annual Production 1500 shoulder bags 2000 wallets 1000 buckle bags Raw materials in inches per unit (Width x Height x Depth = Volume) 1 shoulder bag =12"Wx 15" H x 8" D 1 wallet=6"Wx10"Hx5"D 1 buckle bag=13"Wx16"Hx10"D Raw materials price per unit volume $1 per foot Assembly labor time (hours per unit) 1 shoulder bag = 4 hours 1 wallet =2 hours 1 buckle bag = 4 hours Labor pay rate $20 per hour Assembly department overhead per direct labor hour $10 Color dying process machine hours (MH) 1 shoulder bag = 0.5 MH 1 wallet =0.5 MH 1 buckle bag = 0.5 MH Painting department overhead per MH $20 1 shoulder bag = $210 Sales price 1 wallet = $140 1 buckle bag = $210 Fixed Cost $10,000 Variable SG&A $3 per unit for all three types (bags, wallets, buckles) Fixed SG&A $25,000 Actual amount of material purchased and used 9,990,000 inches The actual cost of material purchased and used The actual amount of direct labor hours The actual cost of direct labor Actual production in units $832,500 20,000 $450,08hat can | help you with today? X Shouldesdaagsre 3.775 Wallets = 3,829 Buckle Bags = 2,380 Actual overhead spending $378,773
Raw materials price per unit $0.95 per foot Related Lessons * Variance Formulas for Cost Accounting e Standard Costs: Definition & Advantages * How Companies Set Standard Costs * How to Prepare & Format Variance Reports e Standard Cost vs. Job Order Cost Overhead & Volume Variance Grading Rubric Not Acceptable Needs Total Category (0) P Improvement Good (3-4) Excellent (5) Possible (1-2) Points Standard Costs | Does not Standard costs are Standard costs are . . : Standard costs are |dentification identify standard accurate but not accurate and 5 not accurate (x1) costs complete complete : Overhead volume Overhead Does not include | Overhead volume | Overhead volume , ] . . . : . variance is Volume the overhead variance is variance is partially 5 . : : computed correctly Variance (x1) volume variance | partially complete | correct and thoroughly , Labor is based on Labor is based on Variance . : : o Labor is partially | rate and volume rate and volume Analysis- Labor | Labor is missing . : . : 10 x2) complete variance but is variance and is incorrect accurate . Raw materials are Raw materials are Variance . : Analvsis- Raw Raw materials Raw materials are | based on rate and based on rate and 10 y , are missing partially complete | volume variance but |volume variance materials (x2) o amount is incorrect |and are accurate Variance Factory overhead is | Factory overhead is , Factory overhead Analysis- Factor overhead i< partiall based on rate and based on rate and 10 Factory is missing P y volume variance but | volume variance complete . . Overhead (x2) amount is incorrect | and is accurate Explanations are | Explanations are I i | Explanations are Results (x2) =XP ) EXp - Wt eglfit] PAAYBU With RF8YiEh and 10 X inconclusive inaccurate partially correct accurate Read more Total Points 50
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