Variable factory overhead costs:Indirect factory laborPower and lightIndirect materialsnemProductive capacity for the month 21,000 hrs.Actual productive capacity used for the month 16,000 hrs.Total variable factory overhead costFixed factory overhead costs:Supervisory salariesDepreciation of plant and equipmentInsurance and property taxesTotal fixed factory overhead costTotal factory overhead costTotal controllable variancesTannin Products Inc.Factory Overhead Cost Variance Report-Trim DepartmentFor the Month Ended July 31Idle hours at the standard rate for fixed factory overhead:ActualBudget (at actual production) Unfavorable Variances Favorable Variances00 00OS undate Overhead Cost variance ReportTannin Products Inc. prepared the following factory overhead cost budget for the Trim Department for July of the current year, during which it expected to use 17,000 hours for production:Variable overhead cost:Indirect factory laborPower and lightIndirect materialsTotal variable overhead costFixed overhead cost:Supervisory salariesDepreciation of plant and equipmentInsurance and property taxesTotal fixed overhead costTotal variable cost$44,20012,41020,400$40,56011,47020,200$72,230$73,02019,22035,860$77,010Total factory overhead cost.Tannin has available 21,000 hours of monthly productive capacity in the Trim Department under normal business conditions. During July, the Trim Department actually used 16,000 hours for production. Theactual fixed costs were as budgeted. The actual variable overhead for July was as follows:Actual variable factory overhead cost:Indirect factory laborPower and lightIndirect materials128,100$205,110Construct a factory overhead cost variance report for the Trim Department for July. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. If an

Variance arises when the actual costs differ from the standard costs. The results are favorable…

annin Products Inc. prepared the following factory overhead cost budget for the Trim Department for July of the current year, during which it expected to use 17,000 hours for production: Wariable overhead cost: Indirect factory labor Power and light Indirect materials Total variable overhead cost Fixed overhead cost: Supervisory salaries Depreciation of plant and equipment Insurance and property taxes Total fixed overhead cost Indirect factory labor Power and light Indirect materials Total variable cost $44,200 12,410 20,400 $40,560 11,470 20,200 $72,230 $73,020 19,220 35,860 Total factory overhead cost Tannin has available 21,000 hours of monthly productive capacity in the Trim Department under normal business conditions. During July, the Trim Department actually used 16,000 hours for production. The actual fixed costs were as budgeted. The actual variable overhead for July was as follows: Actual variable factory overhead cost: $77,010 128,100 $205,110 Construct a factory overhead cost variance report for the Trim Department for July. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. If an

annin Products Inc. prepared the following factory overhead cost budget for the Trim Department for July of the current year, during which it expected to use 17,000 hours for production: Wariable overhead cost: Indirect factory labor Power and light Indirect materials Total variable overhead cost Fixed overhead cost: Supervisory salaries Depreciation of plant and equipment Insurance and property taxes Total fixed overhead cost Indirect factory labor Power and light Indirect materials Total variable cost $44,200 12,410 20,400 $40,560 11,470 20,200 $72,230 $73,020 19,220 35,860 Total factory overhead cost Tannin has available 21,000 hours of monthly productive capacity in the Trim Department under normal business conditions. During July, the Trim Department actually used 16,000 hours for production. The actual fixed costs were as budgeted. The actual variable overhead for July was as follows: Actual variable factory overhead cost: $77,010 128,100 $205,110 Construct a factory overhead cost variance report for the Trim Department for July. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. If an

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 18E: Factory overhead cost variance report Tannin Products Inc. prepared the following factory overhead...

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Factory overhead cost variance report Tannin Products Inc. prepared the following factory overhead cost budget for the Trim Department for July of the current year, during which it expected to use 20,000 hours for production: Tannin has available 25,000 hours of monthly productive capacity in the Trim Department under normal business conditions. During July, the Trim Department actually used 22,000 hours for production. The actual fixed costs were as budgeted. The actual variable overhead for July was as follows: Construct a factory overhead cost variance report for the Trim Department for July.
Factory overhead cost variance report Feeling Better Medical Inc., a manufacturer of disposable medical supplies, prepared the following factory overhead cost budget for the Assembly Department for October of the current year. The company expected to operate the department at 100% of normal capacity of 30,000 hours. During October, the department operated at 28,500 hours, and the factory overhead costs incurred were indirect factory wages, 234,000; power and light, 178,500; indirect materials, 50,600; supervisory salaries, 126,000; depreciation of plant and equipment, 70,000; and insurance and property taxes, 44,000. Instructions Prepare a factory overhead cost variance report for October. To be useful for cost control, the budgeted amounts should be based on 28,500 hours.
Flexible budget for factory overhead Presented below are the monthly factory overhead cost budget (at normal capacity of 5,000 units or 20,000 direct labor hours) and the production and cost data for a month. The predetermined overhead rate is based on normal capacity. Required: 1. Assuming that variable costs will vary in direct proportion to the change in volume, prepare a flexible budget for production levels of 80%, 90%, and 110% of normal capacity. Also determine the predetermined factory overhead rate at each level of volume in both units and direct labor hours. 2. Prepare a flexible budget for production levels of 80%, 90%, and 110%, assuming that variable costs will vary in direct proportion to the change in volume, but with the following exceptions. (Hint: Set up a third category for semi-variable expenses.) a. At 110% of capacity, another supervisor will be needed at a salary of 24,000 annually. b. At 80% of capacity, the repairs expense will drop to one-half of the amount at 100% capacity. c. At 80% of capacity, one part-time maintenance worker, earning 10,000 a year, will be laid off. d. At 110% of capacity, a machine not normally in use and on which no depreciation is normally recorded will be used in production. Its cost was 12,000, it has a 10-year life, and straight-line depreciation will be taken.
Georgia Gasket Co. budgets 8,000 direct labor hours for the year. The total overhead budget is expected to amount to 20,000. The standard cost for a unit of the companys product estimates the variable overhead as follows: The actual data for the period follow: Using the four-variance method, calculate the overhead variances. (Hint: First compute the budgeted fixed overhead rate.)
Flexible overhead budget Leno Manufacturing Company prepared the following factory overhead cost budget for the Press Department for October of the current year, during which it expected to require 20,000 hours of productive capacity in the department: Assuming that the estimated costs for November are the same as for October, prepare a flexible factory overhead cost budget for the Press Department for November for 18,000, 20,000, and 22.000 hours of production.
A company estimates its manufacturing overhead will be $750,000 for the next year. What is the predetermined overhead rate given the following independent allocation bases? Budgeted direct labor hours: 60,000 Budgeted direct labor expense: $1,500,000 Estimated machine hours: 100,000
A company estimates its manufacturing overhead will be $840,000 for the next year. What is the predetermined overhead rate given each of the following Independent allocation bases? Budgeted direct labor hours: 90,615 Budgeted direct labor expense: $750000 Estimated machine hours: 150,000
Calculating factory overhead The standard capacity of a factory is 8,000 units per month. Cost and production data follow: Calculate the amount of factory overhead allowed for the actual volume of production each month and the variance between budgeted and actual overhead for each month.
Calculating amount of factory overhead applied to work in process The overhead application rate for a company is 2.50 per unit, made up of 1.00 for fixed overhead and 1.50 for variable overhead. Normal capacity is 10,000 units. In one month, there was an unfavorable flexible budget variance of 200. Actual overhead for the month was 27,000. What was the amount of the budgeted overhead for the actual level of production?
Preparing a performance report Use the flexible budget prepared in P7-6 for the 31,000-unit level and the actual operating results listed below for the 31,000-unit level. Required: 1. Prepare a performance report. 2. List the major reasons why the actual operating income at 31,000 units differs from the master budget operating income at 30,000 units in Figure 7-12. 3. Given the level at which the company operated, how was its cost control? Item Direct materials: Direct labor:
Determining Budgeted Overhead The overhead application rate for a company is 10 per unit, made up of 6 per unit of fixed overhead and 4 per unit of variable overhead. Normal capacity is 10,000 units. In one month there was a favorable flexible budget variance of 2,500. Actual overhead for the month was 110,000 and actual units produced were 13,125. Based on this information, determine the amount of the budgeted overhead for the actual level of production.
The fixed overhead budgeted for Ranier Industries at an expected capacity of 500,000 units is 1,500,000. Variable costing is used internally, and the net income is adjusted to an absorption costing net income at year-end. Data collected over the last three years show the following: Determine the adjustment each year to convert the variable costing income to absorption costing net income. Compute the absorption costing net income for each year.