5) Rainbow Painting Services Inc, paints interiors of residents and commercial structures. The firm management has established cost standards based on the amount of area to be painted: Direct material ($18 per gallon of paint): $1.50 per 100 square feet Direct labor: $2 per 100 square feet; 400 square feet per hour per worker Variable overhead: 0.60 per 100 square feet Fixed overhead (based on 600,000 square feet er month) $1.25 per 100 square feet The company painted 600,000 square feet of wall and ceiling space. The following costs were incurred: $8,550/ 450 =act Direct Material (450 gallons purchased and used) Direct Labor (1,475 hours) Variable overhead Fixed overhead 12,390 3,422 7,740 Compute the following variances indicating whether each is favorable or unfavorable. (10 Points) Std price $18, act19 1. Direct material price variance 2. Direct material usage variance 3. Direct labor rate variance

5) Rainbow Painting Services Inc, paints interiors of residents and commercial structures. The firm management has established cost standards based on the amount of area to be painted: Direct material ($18 per gallon of paint): $1.50 per 100 square feet Direct labor: $2 per 100 square feet; 400 square feet per hour per worker Variable overhead: 0.60 per 100 square feet Fixed overhead (based on 600,000 square feet er month) $1.25 per 100 square feet The company painted 600,000 square feet of wall and ceiling space. The following costs were incurred: $8,550/ 450 =act Direct Material (450 gallons purchased and used) Direct Labor (1,475 hours) Variable overhead Fixed overhead 12,390 3,422 7,740 Compute the following variances indicating whether each is favorable or unfavorable. (10 Points) Std price $18, act19 1. Direct material price variance 2. Direct material usage variance 3. Direct labor rate variance

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Description: 5) Rainbow Painting Services Inc. paints interiors of residents and commercial structures. The firmmanagement has established cost standards based on the amount of area to be painted:Direct material ($18 per gallon of paint); $1.50 per 100 square fe

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Marvin’s Kitchen Supply delivers restaurant supplies throughout the city. The firm adds 10 percent to the cost of the supplies to cover the delivery cost. The delivery fee is meant to cover the cost of delivery. A consultant has analyzed the delivery service using activity-based costing methods and identified four activities. Data on these activities follow. Cost Driver Volume Activity Cost Driver Cost Driver Volume Processing order Number of orders $ 42,000 3,000 orders Loading truck Number of items 243,000 135,000 items Delivering merchandise Number of orders 51,000 3,000 orders Processing invoice Number of invoices 34,000 2,000 invoices Total overhead $ 370,000 Two of Marvin's customers are City Diner and Le Chien Chaud. Data for orders and deliveries to these two customers follow. City Diner Le Chien Chaud Order value $ 76,000 $ 86,000 Number of orders 56 180 Number of items 400 2,200…
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Benton Corporation manufactures computer microphones, which come in two models: Standard and Premium. Data for a representative quarter for the two models follow: Standard Premium Units produced Production runs per quarter 11,600 50 2,900 25 Direct materials cost per unit $ 30 50 $ 64 75 Direct labor cost per unit Manufacturing overhead in the plant has three main functions: supervision, setup labor, and incoming material inspection. Data on manufacturing overhead for a representative quarter follow: Supervision Setup labor Incoming inspection Total overhead $ 239,250 278,400 200,100 $ 717,750 Required: a. Benton currently applies overhead on the basis of direct labor cost. What is the predetermined overhead rate for the quarter? b. The CFO and the plant controller at Benton are thinking of adopting an ABC system. They have tentatively chosen the following cost drivers: direct labor cost for supervision, production runs for setup labor, and direct material dollars for incoming…
Marvel Parts, Incorporated, manufactures auto accessories including a set of seat covers that can be adjusted to fit most cars. According to its standards, the factory should work 1,075 hours each month to produce 2,150 sets of seat covers. The standard costs associated with this level of production are: Total Direct materials $ 54,825 Direct labor $ 10,750 Per Set of Covers $ 25.50 5.00 Variable manufacturing overhead (based on direct labor-hours) $ 5,375 2.50 $ 33.00 During August, the factory worked 800 direct labor-hours and produced 2,500 sets of covers. The following actual costs were recorded during the month: Total Direct materials (12,500 yards) Direct labor $ 58,750 $ 13,000 Variable manufacturing overhead $ 7,000 Per Set of Covers $ 23.50 5.20 2.80 $ 31.50 At standard, each set of covers should require 3.0 yards of material. All of the materials purchased during the month were used in production. Required: 1. Compute the materials price and quantity variances for August. 2.…
Scorpio makes premium bikes using two departments, assembly and painting. Assembly estimates using 868,000 machine hours and painting uses 41,000 machine hours. Fixed manufacturing overhead costs are estimated to be $10,000,000 for assembly and $751,000 for painting. Variable manufacturing overhead per machine hour is $11.5 in both departments. Machine hours are used as the allocation base for a plantwide predetermined manufacturing overhead application rate. A bike dealership shop places an order for 20 bikes. The order requires 1,030 machine hours in assembly and 105 machine hours in painting. The job also requires $54,000 of direct materials and $108,000 of direct labor. What is the unit product cost (per bike) for the job when Scorpio uses a plantwide approach to calculating its predetermined manufacturing overhead application rate? Round your answer to 2 d.p. Do not round intermediary calculations.
Skyline Florists uses an activity-based costing system to compute the cost of making floral bouquets and delivering the bouquets to its commercial customers. Company personnel who earn $220,000 typically perform both tasks; other firm-wide overhead is expected to total $80,000. These costs are allocated as follows: Bouquet Production Delivery Other Wages and salaries 70 % 20 % 10 % Other overhead 50 % 30 % 20 % Skyline anticipates making 20,000 bouquets and 5,000 deliveries in the upcoming year.What is the cost of wages and salaries and other overhead that would be charged to each bouquet made?
Parker Plastic, Incorporated, manufactures plastic mats to use with rolling office chairs. Its standard cost information for last year follows: Direct materials (plastic) Direct labor Variable manufacturing overhead (based on direct labor hours) Fixed manufacturing overhead ($461,000 +922,000 units) Parker Plastic had the following actual results for the past year: Number of units produced and sold Number of square feet of plastic used Cost of plastic purchased and used Number of labor hours worked Direct labor cost S Variable overhead cost Fixed overhead cost 1,160,000 12,000,000 $ 16,800,000 320,000 $ 3,744,000 $ 1,100,000 $377,000 Standard Quantity 12 square foot 0.3 hour Standard Price (Rate) $ 1.45 per square foot $ 11.90 per hour Standard Unit Cost $ 17.40 3.57 0.3 hour $ 2.30 per hour 0.69 0.50 Required: Calculate Parker Plastic's direct materials price and quantity variances. Note: Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for…
Your Company uses a total of 13,000 units of a part that are produced and used every year. The company's Accounting Department reports the following costs of producing the part at this level of activity: Per Unit Direct materials. $2.90 Direct labor... $7.50 Variable manufacturing overhead... $8.00 Supervisor's salary. $3.40 Depreciation of special equipment.. $1.80 Other fixed costs... $7.00 An outside supplier has offered to make the part and sell it to the company for $29.80 each. If this offer is accepted, the supervisor's salary and all of the variable costs can be avoided. If the part were purchased instead of produced, $2 of the other overhead could be avoided. In addition, the space used to make the part could be used to make more of one of the company's other products, generating an additional segment margin of $25,000 per year for that product. What would be the impact on the company's overall net operating income of buying the part? O A. Decrease by $79,000 per year. O B.…
Jean and Tom Perritz own and manage Happy Home Helpers, Inc. (HHH), a house-cleaning service. Each cleaning (cleaning one house one time) takes a team of three house cleaners about 2.1 hours. On average, HHH completes about 21,000 cleanings per year. The following total costs are associated with the total cleanings: Direct materials $39,900 Direct labor 655,200 Variable overhead 21,000 Fixed overhead 25,200 Required: If required, round your answers to the nearest cent. 1. Calculate the prime cost per cleaning.$fill in the blank 1per cleaning 2. Calculate the conversion cost per cleaning.$fill in the blank 2per cleaning 3. Calculate the total variable cost per cleaning.$fill in the blank 3per cleaning 4. Calculate the total service cost per cleaning.$fill in the blank 4per cleaning 5. What if rent on the office that Jean and Tom use to run HHH increased by $2,100? Which of the following statements best describes the effect of this on HHH's costs?
Parker Plastic, Incorporated, manufactures plastic mats to use with rolling office chairs. Its standard cost information for last year follows: Direct materials (plastic) Direct labor Variable manufacturing overhead (based on direct labor hours) Fixed manufacturing overhead ($639,200 + 940,000 units) Parker Plastic had the following actual results for the past year. Number of units produced and sold Number of square feet of plastic used Cost of plastic purchased and used Number of labor hours worked Direct labor cost Variable overhead cost Fixed overhead cost 1,020,000 12,900,000 $ Direct Labor Rate Variance Direct Labor Efficiency Variance 16,770,000 338,000 $ 4,258,800 $ 1,760,000 $ 395,000 Required: Calculate Parker Plastic's direct labor rate and efficiency variances. Note: Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Answer is complete but not…