What is the correct option ? Subject = general accounting Alpine Woodworks manufactures custom chairs for restaurants. They only accept bulk orders, andeach chair sells for $250 after negotiations. In February, they manufactured 2,800 chairs and sold2,100 chairs. Actual fixed costs matched the budgeted fixed costs for the month.The following information is provided for February:Cost CategoryVariable manufacturing costsFixed manufacturing costsAmount$130 per unit$84,000 per monthFixed Administrative expenses $42,000 per monthAt the end of February, Alpine Woodworks has an ending inventory of 450 finished chairs. Thecompany also pays a sales commission of $8 per unit sold. What is the cost of goods sold per unitwhen using absorption costing?A. $130.00B. $160.00C. $168.00D. $150.00

Step 1: Define Absorption CostingAbsorption Costing includes all variable and fixed manufacturing…

Answered: Alpine Woodworks manufactures custom…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter9: Evaluating Variances From Standard Costs

Section: Chapter Questions

Problem 1COMP

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Salisbury Bottle Company manufactures plastic two-liter bottles for the beverage industry. The cost standards per 100 two-liter bottles are as follows: At the beginning of March, Salisburys management planned to produce 500,000 bottles. The actual number of bottles produced for March was 525,000 bottles. The actual costs for March of the current year were as follows: a. Prepare the March manufacturing standard cost budget (direct labor, direct materials, and factory overhead) for Salisbury, assuming planned production. b. Prepare a budget performance report for manufacturing costs, showing the total cost variances for direct materials, direct labor, and factory overhead for March. c. Interpret the budget performance report.
Lens & Shades sells sunglasses for $37 each and is estimating sales of 21,000 units in January and 19,000 in February. Each lens consist of 2.00 mm of plastic costing $2.50 per mm, 1.7 oz of dye costing $2.80 per ounce. and 0.50 hours direct labor at a labor rate of $18 per unit. Desired inventory levels are: Prepare a sales budget, production budget, direct materials budget for silicon and solution, and a direct labor budget.
Lens Junction sells lenses for $45 each and is estimating sales of 15,000 units in January and 18,000 in February. Each lens consists of 2 pounds of silicon costing $2.50 per pound, 3 oz of solution costing $3 per ounce, and 30 minutes of direct labor at a labor rate of $18 per hour. Desired inventory levels are: Â Prepare a sales budget, production budget. direct materials budget for silicon and solution, and a direct labor budget.
Shinto Corp. uses a standard cost system and manufactures one product. The variable costs per product follow: Budgeted fixed overhead costs for the month are $4,000, and Shinto expected to manufacture 2,000 units. Actual production, however, was only 1,800 units. Materials prices were 10% over standard, and labor rates were 5% over standard. Of the factory overhead expense, only 80% was used, and fixed overhead was $100 over budget. The actual variable overhead cost was $4,800. In materials usage, 8% more parts were used than were allowed for actual production by the standard, and 6% more labor hours were used than were allowed. Required: Calculate the materials and labor variances. Calculate the variances for overhead by the four-variance method. (Hint: First compute the fixed and variable overhead rates per hour.)
Krouse Company produces two products, forged putter heads and laminated putter heads, which are sold through specialty golf shops. The company is in the process of developing itsoperating budget for the coming year. Selected data regarding the companys two products areas follows: Manufacturing overhead is applied to units using direct labor hours. Variable manufacturing overhead Ls projected to be 25,000, and fixed manufacturing overhead is expected to be15,000. The estimated cost to produce one unit of the laminated putter head is: a. 42. b. 46. c. 52. d. 62.
Cloud Shoes manufactures recovery sandals and is planning on producing 12.000 units in March and 11,500 in April. Each sandal requires 1.2 yards if material, which costs $3.00 per yard. The companys policy is to have enough material on hand to equal 15% of next months production needs and to maintain a finished goods inventory equal to 20% of the next months production needs. What is the budgeted cost of purchases for March?
Fresno Industries Inc. manufactures and sells high-quality camping tents. The company began operations on January 1 and operated at 100% of capacity (150,000 units) during the first month, creating an ending inventory of 20,000 units. During February, the company produced 130,000 units during the month but sold 150,000 units at 500 per unit. The February manufacturing costs and selling and administrative expenses were as follows: a. Prepare an income statement according to the absorption costing concept for the month ending February 28. b. Prepare an income statement according to the variable costing concept for for the month ending February 28. c. What is the reason for the difference in the amount of operating income reported in (a) and (b)?
JoyT Company manufactures Maxi Dolls for sale in toy stores. In planning for this year, JoyT estimated variable factory overhead of 600,000 and fixed factory overhead of 400,000. JoyT uses a standard costing system, and factory overhead is allocated to units produced using standard direct labor hours. The level of activity budgeted for this year was 10,000 direct labor hours, and JoyT used 10,300 actual direct labor hours. Based on the output accomplished during this year, 9,900 standard direct labor hours should have been used. Actual variable factory overhead was 596,000, and actual fixed factory overhead was 410,000 for the year. Based on this information, the variable factory overhead controllable variance for JoyT for this year was: a. 24,000 unfavorable. b. 2,000 unfavorable. c. 4,000 favorable. d. 22,000 favorable.
Nashler Company has the following budgeted variable costs per unit produced: Budgeted fixed overhead costs per month include supervision of 98,000, depreciation of 76,000, and other overhead of 245,000. Required: 1. Prepare a flexible budget for all costs of production for the following levels of production: 160,000 units, 170,000 units, and 175,000 units. 2. What is the per-unit total product cost for each of the production levels from Requirement 1? (Round each unit cost to the nearest cent.) 3. What if Nashler Companys cost of maintenance rose to 0.22 per unit? How would that affect the unit product costs calculated in Requirement 2?
Pattison Products, Inc., began operations in October and manufactured 40,000 units during the month with the following unit costs: Fixed overhead per unit = 280,000/40,000 units produced = 7. Total fixed factory overhead is 280,000 per month. During October, 38,400 units were sold at a price of 24, and fixed marketing and administrative expenses were 130,500. Required: 1. Calculate the cost of each unit using absorption costing. 2. How many units remain in ending inventory? What is the cost of ending inventory using absorption costing? 3. Prepare an absorption-costing income statement for Pattison Products, Inc., for the month of October. 4. What if November production was 40,000 units, costs were stable, and sales were 41,000 units? What is the cost of ending inventory? What is operating income for November?
Cardiff Inc. manufactures men’s sport shirts for large stores. It produces a single quality shirt in lots of a dozen according to each customer’s order and attaches the store’s label. The standard costs for a dozen shirts include the following: During October, Cardiff worked on three orders for shirts. Job cost records for the month disclose the following: The following information is also available: Cardiff purchased 95,000 yards of materials during October at a cost of $53,200. The materials price variance is recorded when goods are purchased, and all inventories are carried at standard cost. Direct labor incurred amounted to $112,750 during October. According to payroll records, production employees were paid $10.25 per hour. Overhead is applied on the basis of direct labor hours. Factory overhead totaling $22,800 was incurred during October. A total of $288,000 was budgeted for overhead for the year, based on estimated production at the plant’s normal capacity of 48,000 dozen shirts per year. Overhead is 60% fixed and 40% variable at this level of production. There was no work in process at October 1. During October, Lots 30 and 31 were completed, and all materials were issued for Lot 32, which was 80% completed as to labor and overhead. Required: Prepare a schedule computing the October total standard cost of Lots 30, 31, and 32. Prepare a schedule computing the materials price variance for October and indicate whether it is favorable or unfavorable. For each lot produced during October, prepare schedules computing the following (indicate whether favorable or unfavorable): Materials quantity variance in yards. Labor efficiency variance in hours. (Hint: Don’t forget the percentage of completion.) Labor rate variance in dollars. Prepare a schedule computing the total flexible-budget and production-volume overhead variances for October and indicate whether they are favorable or unfavorable. Give some reasons as to why the production-volume variance may be unfavorable and why it is important to correct the situation.
Marymount Company makes one product. In the month of April, it made 3,500 units. Workers were paid $32 per hour for labor, for a total of $718,848. The standard hours per unit are 6.4, and the standard labor wage rate is $38.40 per hour. A. What are the actual hours worked? B. What are the standard hours for the units made? C. What is the direct labor rate variance for April? D. What Is the direct labor time variance for April? E. What is the total direct labor variance for April?

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