You have just been hired by FAB Corporation, the manufacturer of a revolutionary new garage door opening device. The president hasasked that you review the company's costing system and "do what you can to help us get better control of our manufacturingoverhead costs You find that the company has never used a flexible budget, and you suggest that preparing such a budget would bean excellent first step in overhead planning and control.After much effart and analysis, you determined the following cost formulas and gathered the following actual cost data for March:ActualCost inMarch$ 22, 100$ 56, 800$ 13, 800$119, 100$ 69, 700Cost FormulaUtilitiesMaintenanceSuppliesIndirect labor $94, 20e + $1.20 per machine-hourDepreciation$16, 100 + $e. 21 per machine-hour$39, 000 + $1.20 per machine-hour$e.70 per machine-hour$68, 000During March, the company worked 18.000 machine-hours and produced 12,000 units. The company had originally planned to work20,000 machine-hours during March.Required:1 Calcutate the activity veriences for March.z Calculate the spending vanances for March.Complete this question by entering your answers in the tabs below.RaquiredRequired 2Calculate the activity variances for March. (Indicate the effect of each varlance by selectingE tor tavorable U forUNavorable, end "None for no etfect (1.e zero variance). Input all anmounts es positive valuesFAB CorporatioonActivity VariancesFor the Month Ended Match 31Prev During March, the company worked 18,000 machine-hours and produced 12,000 units. The company had originally planned to work20,000 machine-hours during March.Requlred:1. Calculate the activity variances for March.2. Calculate the spending variances for Merch.Complete this question by entering your answers in the tabs below.Required 1Required 2Calculate the activity variances for March. (Indicate the effect of each variance by selecting "F" for favorable, "U" forunfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)FAB CorporationActivity VariancesFor the Month Ended March 31UtesMaintenanceSupplesIndirect laborDepreciation(TotalRequired 2

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Description: You have just been hired by FAB Corporation, the manufacturer of a revolutionary new garage door opening device. The president hasasked that you review the company's costing system and "do what you can to help us get better control of our manufactur

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bu have just been hired by FAB Corporation, the manufacturer of a revolutionary new garage door opening device. The president sked that you review the company's costing system and "do what you can to help us get better control of our manufacturing verhead costs You find that the company has never used a flexible budget, and you suggest that preparing such a budget would nexcellent first step in overhead planning and control. fter much effort and analysis, you determined the following cost formulas and gathered the following actual cost data for March: Actual Cost in March $ 22, 100 $ 56, 800 $ 13, 800 $119, 100 $ 69, 700 Cost Formula Utilities Maintenancce $16, 100 + $e. 21 per machine-hour $39, 000 + $1.20 per machine-hour $e.78 per machine-hour Supplies Indirect labor $94, 200 + $1.20 per machine-hour Depreciation $68, 000 During March, the company worked 18.000 machine-hours and produced 12,000 units. The company had originally planned to wor 20,000 machine-hours during March.

bu have just been hired by FAB Corporation, the manufacturer of a revolutionary new garage door opening device. The president sked that you review the company's costing system and "do what you can to help us get better control of our manufacturing verhead costs You find that the company has never used a flexible budget, and you suggest that preparing such a budget would nexcellent first step in overhead planning and control. fter much effort and analysis, you determined the following cost formulas and gathered the following actual cost data for March: Actual Cost in March $ 22, 100 $ 56, 800 $ 13, 800 $119, 100 $ 69, 700 Cost Formula Utilities Maintenancce $16, 100 + $e. 21 per machine-hour $39, 000 + $1.20 per machine-hour $e.78 per machine-hour Supplies Indirect labor $94, 200 + $1.20 per machine-hour Depreciation $68, 000 During March, the company worked 18.000 machine-hours and produced 12,000 units. The company had originally planned to wor 20,000 machine-hours during March.

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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Sunland, Inc. decided to implement the activity-based costing approach and was quite successful in its use. However, the controller is wondering if instead of only two activity cost pools, they should expand to three activity cost pools based on the following: Direct labor costs Machine hours Setup hours Packaging hours Family Model Deluxe Model $77,400 $154,800 Question 1 of 20 Machining Machine set up Packaging The estimated overhead of $464,400 is allocated as follows: machining activity cost pool $247,680, machine set up $175,440 and packaging $41,280. (1) Determine the overhead rates using the activity-based costing approach with three cost pools. (Round answers to 2 decimal places, eg. 15.25.) Family model 2,000 Difference $ $ $ The additional cost pool $ Deluxe model $ 200 $ 50 2,000 800 75 (2) Calculate the overhead allocation for the family model and the deluxe model using three activity cost pools. Overhead Rate Overhead Allocation per hour per hour per hour What is the…
You have just been hired by FAB Corporation, the manufacturer of a revolutionary new garage door opening device. The president asked you to review the company's costing system and "do what you can to help us get better control of our manufacturing overhead costs." You find the company has never used a flexible budget, and you suggest preparing such a budget would be an excellent first step in overhead planning and control. After much effort and analysis, you estimated the following cost formulas and gathered the following actual cost data for March: Utilities Maintenance Supplies Indirect labor Depreciation Cost Formula $16,900 + $0.15 per machine-hour $38,600 + $1.80 per machine-hour $0.30 per machine-hour $94,300 + $1.30 per machine-hour $67,500 Actual Cost in March $ 21,400 $ 64,800 $ 5,200 $ 118,600 $ 69,200 During March, the company worked 16,000 machine-hours and produced 10,000 units. The company originally planned to work 18,000 machine-hours during March. Required: 1.…
Safeway Electronics make small electronic parts. The management accountant, Belle Ramo, decides to implement an activity- based costing (ABC) system. She lists the following points to support her decision: . The recent cost report shows that the ratio of prime costs to manufacturing overhead cost is approximately 1:3. . Safeway Electronics is a small company. . Safeway Electronics has three product lines: basic parts (parts that are common to many products and many suppliers), customised parts (electronic parts that are highly customised to very specialised electric motors), prototypes (where Safeway Electronics need to design as well as manufacture these specialised electronic parts). . Safeway Electronics has recently implemented a flexible manufacturing system; this practically eliminates any setup costs; with this system, product customisation takes very little additional time. Required: Which of the above points support the use of ABC in Safeway…
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As you learned in the previous chapters, Current Designs has two main product lines-composite kayaks, which are handmade and very labor-intensive, and rotomolded kayaks, which require less labor but employ more expensive equipment. Current Designs' controller, Diane Buswell, is now evaluating several different methods of assigning overhead to these products. It is important to ensure that costs are appropriately assigned to the company's products. At the same time, the system that is used must not be so complex that its costs are greater than its benefits. Diane has decided to use the following activities and costs to evaluate the methods of assigning overhead. Activities Designing new models Creating and testing prototypes Creating molds for kayaks Cost $124,000 144,000 182,000 Operating oven for the rotomolded kayaks 41,000 Operating the vacuum line for the composite kayaks 28,000 Supervising production employees 168,000 Curing time (the time that is needed for the chemical processes…
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Danna Lumus, the marketing manager for a division that produces a variety of paper products, is considering the divisional manager’s request for a sales forecast for a new line of paper napkins. The divisional manager has been gathering data so that he can choose between two different production processes. The first process would have a variable cost of $10 per case produced and total fixed cost of $100,000. The second process would have a variable cost of $6 per case and total fixed cost of $200,000. The selling price would be $30 per case. Danna had just completed a marketing analysis that projects annual sales of 30,000 cases. Danna is reluctant to report the 30,000 forecast to the divisional manager. She knows that the first process would be labor intensive, whereas the second would be largely automated with little labor and no requirement for an additional production supervisor. If the first process is chosen, Jerry Johnson, a good friend, will be appointed as the line supervisor.…
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You have just been hired by FAB Corporation, the manufacturer of a revolutionary new garage door opening device. The president has asked that you review the company's costing system and "do what you can to help us get better control of our manufacturing overhead costs." You find that the company has never used a flexible budget, and you suggest that preparing such a budget would be an excellent first step in overhead planning and control. After much effort and analysis, you determined the following cost formulas and gathered the following actual cost data for March: Actual Cost in March $ 21,520 Utilities Maintenance Supplies Indirect labor Depreciation Cost Formula $16,300 + $0.18 per machine-hour $38,300 + $1.80 per machine-hour $0.80 per machine-hour $94,700 + $1.70 per machine-hour $68,000 $ 66,300 $ 15,000 $ 127,900 $ 69,700 During March, the company worked 17,000 machine-hours and produced 11,000 units. The company had originally planned to work 19,000 machine-hours during March.…