A manufacturing company has a standard costing system based on standard direct labor-hours (DLHS) as the measure of activity. Data from the company's flexible budget for manufacturingoverhead are given below:Denominator level of activityOverhead costs at the budgeted activity level:Variable overhead costFixed overhead costThe following data pertain to operations for the most recent period:Actual hoursStandard hours allowed for the actual outputActual total variable manufacturing overhead costActual total fixed manufacturing overhead costThe fixed manufacturing overhead budget variance for the period is closest to:$900 F$930 U6,400 DLHS$ 35,200$ 70,4006,600 DLHS6,272 DLHS$38,400$ 69,500$900 U$1,150 F

Step 1: Calculation of the fixed manufacturing overhead budget variance.Fixed Overhead Budget…

Answered: A manufacturing company has a standard…

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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A company has two products: A and B. It uses activity-based costing and has prepared the following analysis showing budgeted cost and activity for each of its three activity cost pools: Activity Cost Pool Activity 1 3,000 2,800 Activity 2 4,500 5,500 Activity 3 2,500 5,250 Annual production and sales level of Product A is 34,300 units, and the annual production and sales level of Product B is 69,550 units. What is the approximate overhead cost per unit of Product B under activity-based costing? O $10.28 O $3.00 $2.33 $2.00 O $15.00 Budgeted Activity Budgeted Cost $87,000 $62,000 $93,000 Product A Product B
Activity Rates and Determining the cost of a product, which consist of direct materials, direct labor, and factory overhead.Product Costs using Activity-Based Costing Lonsdale Inc. manufactures entry and dining room lighting fixtures. Five activities are used in manufacturing the fixtures. These activities and their associated budgeted activity costs and A measure of activity that is related to changes in cost. Used in analyzing and classifying cost behavior.activity bases are as follows: Activity BudgetedActivity Cost Activity Base Casting $329,350 Machine hours Assembly 214,600 Direct labor hours Inspecting 41,650 Number of inspections Changing the characteristics of a machine to produce a different product.Setup 38,250 Number of setups Materials handling 37,800 Number of loads Corporate records were obtained to estimate the amount of activity to be used by the two products. The estimated activity-base usage quantities and units produced follow: Activity…
The following standard costs were used for one of its products: Standard Cost per Unit Fixed overhead Total 9 hours @ $13 per hour $ 117 Overhead is applied to products on the basis of standard direct labor hours for actual production. The following information is available regarding the company's operations for the period: Actual units produced Total actual direct labor hours Actual fixed manufacturing overhead incurred Budgeted fixed manufacturing overhead for the period Budgeted units for the period Required: Calculate the fixed overhead variances. Use your answer to answer the following questions. 1,200 units 8,500 hours $110,000 $122,850 1,050 units
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Required: a) Using Activity Based Costing, calculate the rate for each cost driver. b) Using activity based budgeting, prepare a budgeted yearly operating statement for Aero3D Ltd. Show the following separately, within the statement. i. The budgeted output for each product per year; ii. The contribution to profits for each product and in total before charging activity based costs; iii. The profit for each product and in total after charging activity based costs but before charging core costs (non-activity based costs); iv. The total profit after charging core based costs.
Privack Corporation has a standard cost system in which it applies overhead to products based on the standard direct labor-hours allowed for the actual output of the period. Data concerning the most recent year appear below: Budgeted variable overhead cost per direct labor-hour $ 4.00 Total budgeted fixed overhead cost per year $ 528,180 Budgeted direct labor-hours (denominator level of activity) 75,455 Actual direct labor-hours 84,000 Standard direct labor-hours allowed for the actual output 81,000 Required: 1. Compute the predetermined overhead rate for the year. Be sure to include the total budgeted fixed overhead and the total budgeted variable overhead in the numerator of your rate. (Round your intermediate calculations and final answer to the nearest whole dollar amount.) 2. Compute the amount of overhead that would be applied to the output of the period. (Round your intermediate calculations and final answer to the nearest whole dollar amount.)
Consider the following data for two products of Vigano Manufacturing. Budgeted Cost Activity Machine setup Parts handling Quality inspections Total budgeted overhead Unit Information Units produced Direct materials cost Direct labor cost Direct labor hours Actual Activity Usage Setups Parts Inspections 1. Using a plantwide overhead rate based on 6,500 direct labor hours, compute the total product cost per unit for each product. 2. Consider the following additional information about these two products. If activity- based costing is used to allocate overhead cost, (a) compute overhead activity rates, (b) allocate overhead cost to Product A and Product B and compute overhead cost per unit for each, and (c) compute product cost per unit for each. Required 1 Required 2 Per Unit Product A Product B Activity Driver $ 26,000 (20 machine setups) 20,800 (16,000 parts) 31,200 (100 inspections) $ 78,000 Product A 2,600 units $36 per unit $ 56 per unit 2 per unit $ Direct Materials Complete this…
CanCo Company manufactures a single product. The company keeps careful records of manufacturing activities, from which the following Information has been extracted: Number of units produced Cost of goods manufactured Work-in-process inventory, beginning Work-in-process inventory, ending Direct materials cost per unit Direct labour cost per unit Manufacturing overhead cost, total Manufacturing overhead cost Y= Level of Activity March The company's manufacturing overhead cost consists of both variable and fixed cost elements. To have data available for planning, management wants to determine how much of the overhead cost is variable with units produced and how much of it is fixed per month. $ 5,200 $260,800 31,000 53,000 Required: 1. For both March and June, determine the amount of manufacturing overhead cost added to production. (Hint: A useful way to proceed might be to construct a schedule of cost of goods manufactured.) Cost of goods manufactured Answer is complete but not entirely…
The controller at Wesson Company's manufacturing plant has provided you with the following information for the first quarter's operations: Direct materials Fixed manufacturing overhead costs Sales price Variable manufacturing overhead Direct labor Fixed marketing and administrative costs Units produced and sold during the quarter Variable marketing and administrative costs Required: a. Determine the variable cost per unit. b. Determine the variable manufacturing cost per unit. c. Determine the full absorption cost per unit. d. Determine the full cost per unit. e. Determine the profit margin per unit. f. Determine the gross margin per unit. g. Determine the contribution margin per unit. Note: Round your answer to 2 decimal places. a. Variable cost per unit b. Variable manufacturing cost per unit c. Full absorption cost per unit d. Full cost per unit e. Profit margin per unit f. Gross margin per unit g. Contribution margin per unit $ 116 per unit $ 2,540,000 $ 525 per unit $57 per unit…
2
A company uses activity-based costing to determine the costs of its three products: A, B, and C. The budgeted cost and activity for each of the company's three activity cost pools are shown in the following table: Budgeted Activity Activity Cost PoolBudgeted Cost Product AProduct BProduct Activity 1 7,500 10,500 21,500 Activity 2 8,500 16,500 9,500 Activity 3 4,000 2,500 3,125 How much overhead will be assigned to Product B using activity-based costing? 85,000 60,000 112,000
Happy Valley Pet Products uses a standard costing system that applies overhead to products based on standard direct labour-hours allowed for actual output of the period. During the recent year, the following data were collected: Total budgeted fixed overhead cost for the year Budgeted standard direct labour-hours Actual fixed overhead cost for the year Actual direct labour-hours Standard direct labour-hours allowed for the actual output $63,450 $60,950 14,100 15,300 12,600 Required. 1. Compute the fixed portion of the predetermined overhead rate for the year. (Round your answer to 2 decimal places.) Predetermined overhead rate per DLH 2. Compute the fixed overhead budget and volume variances. (Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).) Fixed overhead budget variance Fixed overhead volume variance

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