Exercise 9-11 (Static) Activity Variances [LO9-2] Lavage Rapide owns and operates a large automatic car wash facility near Montreal. The following table provides e concerning the company's costs: Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses Fixed Cost per cost per Month Car Washed $0.80 $ 0.15 $ 0.20 $0.30 $ 1,200 $ 5,000 $6,000 $8,000 $4,000 $ 0.10 For example, electricity costs should be $1,200 per month plus $0.15 per car washed. The company expects to wash August and to collect an average of $4.90 per car washed. The company actually washed 8,800 cars in August. Required: Calculate the company's activity variances for August. Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no variance). Input all amounts as positive values.

Exercise 9-11 (Static) Activity Variances [LO9-2] Lavage Rapide owns and operates a large automatic car wash facility near Montreal. The following table provides e concerning the company's costs: Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses Fixed Cost per cost per Month Car Washed $0.80 $ 0.15 $ 0.20 $0.30 $ 1,200 $ 5,000 $6,000 $8,000 $4,000 $ 0.10 For example, electricity costs should be $1,200 per month plus $0.15 per car washed. The company expects to wash August and to collect an average of $4.90 per car washed. The company actually washed 8,800 cars in August. Required: Calculate the company's activity variances for August. Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no variance). Input all amounts as positive values.

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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Problem 10-15 (Algo) Comprehensive Variance Analysis [LO10-1, LO10-2, LO10-3] Miller Toy Company manufactures a plastic swimming pool at its Westwood Plant. The plant has been experiencing problems as shown by its June contribution format income statement below: Flexible Budget Actual Sales (4,000 pools) $ 239,000 $ 239,000 Variable expenses: Variable cost of goods sold* 57,680 70,390 Variable selling expenses 16,000 16,000 Total variable expenses 73,680 86,390 Contribution margin 165,320 152,610 Fixed expenses: Manufacturing overhead 72,000 72,000 Selling and administrative 82,000 82,000 Total fixed expenses 154,000 154,000 Net operating income (loss) $ 11,320 $ (1,390) *Contains direct materials, direct labor, and variable manufacturing overhead. Janet Dunn, who has just been appointed general manager of the Westwood Plant, has been given instructions to “get things under control.” Upon reviewing the plant’s income statement, Ms. Dunn…
Exercise 11-4 (Algo) Service Department Charges [LO11-4] Hannibal Steel Company has a Transport Services Department that provides trucks to haul ore from the company’s mine to its two steel mills—the Northern Plant and the Southern Plant. Budgeted costs for the Transport Services Department total $168,700 per year, consisting of $0.17 per ton variable cost and $118,700 fixed cost. The level of fixed cost is determined by peak-period requirements. During the peak period, the Northern Plant requires 57% of the Transport Services Department’s capacity and the Southern Plant requires 43%. During the year, the Transport Services Department actually hauled 116,000 tons of ore to the Northern Plant and 51,500 tons to the Southern Plant. The Transport Services Department incurred $370,000 in cost during the year, of which $53,000 was variable cost and $317,000 was fixed cost. Required: 1. How much of the Transport Services Department’s variable costs should be charged to each plant? 2.…
Problem6answered.This problem is current being displayed. Problem7 Problem8 Problem9 Problem10 Problem11 Problem12 Problem13 Problem14 Problem15 Problem16 Problem17 Return to Problem Navigation Given the following information for The Pelican Inn, what is the direct labor rate variance? Actual housekeeping staff hours worked 760 Standard staff hours for rooms cleaned 800 Standard staff pay rate per hour $12.50 Actual staff pay rate per hour $13.00 a.$400 unfavorable b.$(380) favorable c.$(20) favorable d.$380 unfavorable
Problem 8-44 (Algo) Cost Estimation; High-Low Method [LO 8-3] Horizon BP in Antelope Park, Alaska, has noticed that utility bills are substantially higher when the average monthly temperature is colder. The only thing in the shop that uses natural gas is the furnace. Because of prevailing low temperatures, the furnace is used every month of the year (though less in the summer months and very little in August). Everything else in the shop runs on electricity, and electricity use is fairly constant throughout the year. For a year, Horizon has been recording the average daily temperature and the cost of its monthly utility bills for natural gas and electricity. Required: Use the high-low method to estimate utility cost for the upcoming months of January and February. The forecast for January is a near record average temperature of 5°F; temperatures in February are expected to average 40°F.
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1 Book References Problem 9-18 (Algo) Activity and Spending Variances (LO9-1, LO9-2, LO9-3) 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: Utilities Maintenance Supplies Indirect labor Depreciation Cost Formula $16,500 $0.12 per nachine-hour $30,000+ 81.40 per machine-hour 50.70 per machine-hour $94,100 $1.70 per machine-hour $67,800 Actual Cost in March $ 21,180 $ 66,200 $ 16,600 $ 135,800 $ 69,500 During March, the company worked 22,000 machine-hours and produced…
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t ces Exercise 6-5 (Algo) Compute the Margin of Safety [LO6-5] Molander Corporation is a distributor of a sun umbrella used at resort hotels. Data concerning the next month's budget appear below: Selling price per unit Variable expense per unit Fixed expense per month Unit sales per month Required: 1. What is the company's margin of safety? $ 24 $ 16 $ 7,200 1,050 Note: Do not round intermediate calculations. 2. What is the company's margin of safety as a percentage of its sales? Note: Round your percentage answer to 2 decimal places (i.e. .1234 should be entered as 12.34). 1. Margin of safety (in dollars) 2. Margin of safety percentage %
Exercise 9-12 (Algo) Revenue and Spending Variances [LO9-3] Lavage Rapide is a Canadian company that owns and operates a large automatic car wash facility near Montreal. The following table provides estimates concerning the company's costs: Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Administrative expenses Rent Actual cars washed Revenue Expenses: Cleaning supplies Electricity Maintenance For example, electricity costs should be $1,200 per month plus $0.07 per car washed. The company expects to wash 8,200 cars in August and to collect an average of $6.80 per car washed. The actual operating results for August are as follows: Lavage Rapide Income Statement For the Month Ended August 31 Wages and salaries Depreciation Rent Fixed Cost per Month $ 1,200 $4,700 $ 8,100 $ 1,900 $ 1,700 Administrative expenses Total expense Net operating income Cost per Car Washed $ 0.50 $ 0.07 $0.20 $ 0.20 8,300 $ 57,860 4,600 1,744 $ 0.03 1,880 6,700 8,100 2,100 1,846 26,970 $…
Exercise 11-4 (Algo) Service Department Charges [LO11-4] Hannibal Steel Company's Transport Services Department provides trucks to haul ore from the company's mine to its two steel mills- the Northern Plant and the Southern Plant. Budgeted costs for the Transport Services Department total $154,500 per year, consisting of $0.2 per ton variable cost and $104,500 fixed cost. The level of fixed cost is determined by peak-period requirements. During the peak period, the Northern Plant requires 59% of the Transport Services Department's capacity and the Southern Plant requires 41%. During the year, the Transport Services Department actually hauled 129,000 tons of ore to the Northern Plant and 64,500 tons to the Southern Plant. The Transport Services Department incurred $364,000 in cost during the year, of which $53,300 was variable and $310,700 was fixed. Required: 1. How much of the Transport Services Department's variable costs should be charged to each plant? 2. How much of the Transport…