Consider the following information for Richardson Company for the prior year: The company produced 2,550 units and sold 2,400 units, both as budgeted. - There were no beginning or ending work-in-process inventories and no beginning finished goods inventory. -Budgeted and actual fixed costs were equal, all variable manufacturing costs were affected by production volume only, and all variable selling costs were affected by sales volume only. -Budgeted per unit revenues and costs were as follows: Sales price Direct materials Direct labor Other variable manufacturing costs Fixed selling costs Variable selling costs Fixed manufacturing costs Fixed administrative costs The contribution margin earned by Richardson for the prior year was Per unit $75 9 24 11 6 16 6 1

Consider the following information for Richardson Company for the prior year: The company produced 2,550 units and sold 2,400 units, both as budgeted. - There were no beginning or ending work-in-process inventories and no beginning finished goods inventory. -Budgeted and actual fixed costs were equal, all variable manufacturing costs were affected by production volume only, and all variable selling costs were affected by sales volume only. -Budgeted per unit revenues and costs were as follows: Sales price Direct materials Direct labor Other variable manufacturing costs Fixed selling costs Variable selling costs Fixed manufacturing costs Fixed administrative costs The contribution margin earned by Richardson for the prior year was Per unit $75 9 24 11 6 16 6 1

Managerial Accounting

15th Edition

ISBN:9781337912020

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

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

Chapter6: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 1CMA: Taylor Corporation is analyzing the cost behavior of three cost items, A, B, and C, to budget for...

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Consider the following information for Richardson Company for the prior year: - The company produced 2,550 units and sold 2,400 units, both as budgeted. - There were no beginning or ending work-in-process inventories and no beginning finished goods inventory. - Budgeted and actual fixed costs were equal, all variable manufacturing costs were affected by production volume only, and all variable selling costs were affected by sales volume only. - Budgeted per unit revenues and costs were as follows: Sales price Direct materials Direct labor Other variable manufacturing costs Fixed selling costs Variable selling costs Fixed manufacturing costs Fixed administrative costs The contribution margin earned by Richardson for the prior year was Answer: Per unit $75 9 24 11 6 16 661
MANAGEMENT ACCOUNTING (ABSORPTION COSTING AND VARIABLE COSTING) Bispress Co.'s budgeted production and sales were 600 units. In a period, the actual production was 630 units whilst the sales were only 590 units. The reported profit under variable costing was RM52,800. The budgeted and actual fixed production overheads for the period were RM18,000. Required: If Bispress Co. had used absorption costing to report profits, what would be the under/over absorbed overheads in the period?
[The following information applles to the questions displayed below.] ABC Corporation Is a service company that measures Its output based on the number of customers served. The company provided the following fixed and varlable cost estimates that It uses for budgeting purposes and the actual results for May as shown below: Actual Total for May $ 223,500 $ 126,000 20,400 S.44,300 Fixed Element Variable Element per Month per Customer Served $6,100 $ 1,500 Revenue Employee salaries and wages Travel expenses other expenses $ 68,000 $ 47,000 When preparing Its plannlng budget the company estimated that It would serve 35 customers per month; however, during May the company actually served 40 customers. 14. What activity varlance would Adger report In May with respect to Its revenue? (Indicate the effect of each varlance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (I.e., zero varlance). Input all amounts as positive values.) Activity variance
(1) Compute the total variable cost per unit.(2) Compute the total fixed costs.(3) Compute the income from operations for sales volume of 10,000 units.(4) Compute the income from operations for sales volume of 14,000 units.
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[The following information applies to the questions displayed below.] Adger Corporation is a service company that measures its output based on the number of customers served. The company provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results for May as shown below: Revenue Employee salaries and wages Travel expenses Other expenses Fixed Element per Month $ 59,000 Revenue variance $ 38,000 Variable Element per Customer Served $ 5,500 $2,000 $ 510 Actual Total for May $ 204,000 $ 137,900 $ 17,500 $36,200 When preparing its planning budget the company estimated that it would serve 35 customers per month; however, during May the company actually served 40 customers. 6. What is Adger's revenue variance for May? Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.
Rammazzotti, Inc., is looking for feedback on company performance. The company compares the budget for the year with the actual costs.Rammazzotti, Inc., had the following budgeted data: Unit sales for the year 26,000 Unit production for the year 26,000 Budgeted fixed overhead for the year: Supervision $ 800 Depreciation 2,000 Rent 100 Budgeted variable costs per unit: Direct materials $0.15 Direct labor 0.20 Supplies 0.02 Indirect labor 0.05 Power 0.02 The following actually occurred: Actual unit sales for the year 24,000 Actual unit production for the year 28,000 Actual fixed overhead for the year: Supervision $ 850 Depreciation 2,000 Rent 100 Actual variable costs: Direct materials $3,500 Direct labor 4,900 Supplies 530 Indirect labor 1,250 Power 470 The total budgeted costs for the year were a.$14,340. b.$11,440. c.$13,510. d.$13,460.
Renton company is reviewing the results of its production during the most recent fiscal year. Due to seasonality of the bussiness, the volume of production flactuates during the year. Renton would like to analyze the fixed and variable costs for purposes of estimating the budget for upcoming fiscal year. The cost accountant provided the following data: Units produce total costs January 1,100 12,530 February 1,200 13,260 March 1,400 14,720 April 1,500 15,450 May 1,800 17,640 June 2,100 19,830 July 2,000 19,100 August 1,900 18,370 September 1,400 14,720 October 1,500 15,450 November 1,300 13,990 December 1,700 16,910 Total 18,900 191,170 Required: Calculate the variable cost per unit and the total fixed cost using the following: a. High and low point method b. Average method (compare the two lowest quarters) c. Graphical method d. Method of least squares
The following information was taken from the annual manufacturing overhead cost budget of Tamarisk Company: Variable manufacturing overhead costs Fixed manufacturing overhead costs Normal production level in labour hours Normal production level in units Standard labour hours per unit (U) During the year, 4,000 units were produced, 16,300 hours were worked, and the actual manufacturing overhead was $55,600. Actual fixed manufacturing overhead costs equalled the budgeted fixed manufacturing overhead costs. Overhead is applied based on direct labour hours. Your answer is partially correct. Total overhead variance Calculate the total, budget, and volume overhead variances. Budget overhead variance $35,260 $18,860 16,400 JA Volume overhead variance $ e Texthook and Media 4,100 2340 115 2455 Unfavourable Unfavourable Unfavourable
Adger Corporation is a service company that measures its output based on the number of customers served. The company provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results for May as shown below: Fixed Elementper Month Variable Element per Customer Served Actual Totalfor May Revenue $ 5,200 $ 170,000 Employee salaries and wages $ 51,000 $ 1,200 $ 92,700 Travel expenses $ 650 $ 20,600 Other expenses $ 30,000 $ 29,000 When preparing its planning budget the company estimated that it would serve 30 customers per month; however, during May the company actually served 35 customers. Questions: A. What activity variance would Adger report in May with respect to its revenue? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.) B. What activity variances would Adger…
Consider the following situation for Junkee Corporation for the prior year. The company produced 1,000 units and sold 900 units, both as budgeted. There were no beginning or ending work-in-process inventories and no beginning finished goods inventory. Budgeted per unit revenues and costs were as follows. Per Unit Sales price P 100 Direct Materials 30 Direct Labor 20 Variable Manufacturing Overhead 10 Fixed Manufacturing Overhead 5 Variable Selling Costs 12 Fixed Selling Costs (Total P3,600) 4 Fixed Administrative Costs (Total P 1,800) 2 Required: 1. Using absorption costing, compute the product cost, Ending inventory, Cost of Sale, & Net Income. 2. Using variable costing, compute the product cost, Ending inventory, Cost of Sale, & Net Income. 3. Reconcile the two computed net income under the two difference product costing techniques.
Armati, Inc., is looking for feedback on company performance. The company compares the budget for the year with the actual costs. Data have been collected below: Armati, Inc., had the following budgeted data: Unit sales for 2011 26,000 Unit production for 2011 26,000 Budgeted fixed costs for 2011: $2,900 Budgeted variable costs per unit: Direct materials $0.15 Direct labor $0.29 The following actually occurred: Actual unit sales for 2011 24,000 Actual unit production for 2011 28,000 Actual fixed costs for 2011: $2,950 Actual variable costs: $10,650 The flexible budget variance for total cost for 2011 is A. $1,280 U. B. $1,620 F. C. $1,670 F. D. $50 U.