Flounder Company estimates that it will produce 6,000 units of product IOA during the current month. Budgeted variablemanufacturing costs per unit are direct materials $8, direct labor $13, and overhead $19. Monthly budgeted fixed manufacturingoverhead costs are $7,700 for depreciation and $3,700 for supervision.In the current month, Flounder actually produced 6,500 units and incurred the following costs: direct materials $44,976, direct labor$76,400, variable overhead $122,094, depreciation $7,700, and supervision $3,959.Prepare a static budget report. Hint: The Budget column is based on estimated production while the Actual column is the actual costincurred during the period. (List variable costs before fixed costs.)FLOUNDER COMPANYStatic Budget Report÷BudgetActual$+ADifferenceFavorableUnfavorabl

Particulars BudgetActual Difference Favorable/Unfavorable Units produced 60006500 Variable…

Answered: Flounder Company estimates that it will…

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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Patel and Sons Incorporated uses a standard cost system to apply factory overhead costs to units produced. Practical capacity for the plant is defined as 50,000 machine hours per year, which represents 25,000 units of output. Annual budgeted fixed factory overhead costs are $250,000 and the budgeted variable factory overhead cost rate is $4 per unit. Factory overhead costs are applied on the basis of standard machine hours allowed for units produced. Budgeted and actual output for the year was 20,000 units, which took 41,000 machine hours. Actual fixed factory overhead costs for the year amounted to $245,000, while the actual variable overhead cost per unit was $3.90. Assume that at the end of the year, management of Patel and Sons decides that the overhead cost variances should be allocated to WIP Inventory, Finished Goods Inventory, and Cost of Goods Sold (CGS) using the following percentages: 10%, 20%, and 70%, respectively. Provide the proper journal entry to close out the…
Patel and Sons Inc. uses a standard cost system to apply factory overhead costs to units produced. Practical capacity for the plant is defined as 51,600 machine hours per year, which represents 25,800 units of output. Annual budgeted fixed factory overhead costs are $258,000 and the budgeted variable factory overhead cost rate is $2.50 per unit. Factory overhead costs are applied on the basis of standard machine hours allowed for units produced. Budgeted and actual output for the year was 19,500 units, which took 40,600 machine hours. Actual fixed factory overhead costs for the year amounted to $251,600 while the actual variable overhead cost per unit was $2.40. Assume that at the end of the year, management of Patel and Sons decides that the overhead cost variances should be allocated to WIP Inventory, Finished Goods Inventory, and Cost of Goods Sold (CGS) using the following percentages: 10%, 20%, and 70%, respectively. Provide the proper journal entry to close out the…
Tiger Equipment Inc., a manufacturer of construction equipment, prepared the following factory overhead cost budget for the Welding Department for May of the current year. The company expected to operate the department at 100% of normal capacity of 6,200 hours. Variable costs: Indirect factory wages $20,460 Power and light 13,826 Indirect materials 11,346 Total variable cost $45,632 Fixed costs: Supervisory salaries $10,410 Depreciation of plant and equipment 26,700 Insurance and property taxes 8,150 Total fixed cost 45,260 Total factory overhead cost $90,892 During May, the department operated at 6,600 standard hours. The factory overhead costs incurred were indirect factory wages, $22,000; power and light, $14,450; indirect materials, $12,300; supervisory salaries, $10,410; depreciation of plant and equipment, $26,700; and insurance and property taxes, $8,150. Required: Prepare a factory overhead cost…
XYZ Company expects to produce and sell 15,000 units during the next year with no beginning or ending inventories. Budgeted direct material cost is $8 per unit, budgeted direct labor cost is $5 per direct labor hour, and budgeted variable manufacturing overhead is $7 per direct labor hour. Budgeted fixed manufacturing overhead cost for the year is $60,000 in total. Budgeted direct labor hours needed for the year is 30,000 hours in total. The budgeted cost of goods sold for the next year is: Select one: O a. $540,000 O b. None of the given answers O c. $360,000 O d. $600,000 O e. $570,000
A company's budgeted varlable manufacturing overhead cost Is $1.05 per machine-hour and Its budgeted fixed manufacturing overhead Is $27,094 per month. The following information is avallable for a recent month: a. The denominator activity of 8,740 machine-hours is used to compute the predetermined overhead rate. b. At a denominator activity of 8.740 machine-hours, the company should produce 3,800 unlts of product. C. The company's actual operating results were: Number of units produced Actual machine-hours Actual variable manufacturing overhead cost Actual fixed manufacturing overhead cost 4,220 10,050 $12,060.00 $26,400.00 Required: 1. Compute the predetermined overhead rate and break It down Into varlable and fixed cost elements. (Round your answers to 2 declmal places.) 2. Compute the standard hours allowed for the actual production. 3. Compute the varlable overhead rate and efficlency varlances and the fixed overhead budget and volume varlances. (Indicate the effect of each…
ABC Pillow produces and sells animal pillow for $80.00 per unit. In the first month of operation, 3,000 units were produced and 2,250 units were sold. Actual fixed costs are the same as the amount budgeted for the month. Other information for the month includes: Variable manufacturing costs Variable marketing costs Fixed manufacturing costs Administrative expenses, all fixed $12,000 per month Ending inventories: Direct materials $38 per unit $ 2 per unit $60,000 per month -0- WIP -0- Finished goods 750 units 11) What is gross margin when using absorption costing? A) $95,000 B) $109,500 C) $154,500 D) $49,500
Ceder Company has compiled the following data for the upcoming year: Sales are expected to be 16,000 units at $52 each. Each unit requires 4 pounds of direct materials at $2.40 per pound. Each unit requires 2.1 hours of direct labor at $13 per hour. Manufacturing overhead is $4.90 per unit. Beginning direct materials inventory is $5,400. Ending direct materials inventory is $6,950. Selling and administrative costs totaled $138,720. Determine Ceder's budgeted cost of goods sold. Complete Ceder's budgeted income statement.
KYZ Company expects to produce and sell 15,000 units during the next year with no beginning or ending inventories. Budgeted direct material cost is $8 per unit, budgeted direct labor cost is $5 per direct labo nour, and budgeted variable manufacturing overhead is $5 per direct labor hour. Budgeted fixed manufacturing overhead cost for the year is $60,000 in total. Budgeted direct labor hours needed for the year is 30,000 hours in total. The budgeted cost of goods sold for the next year is: Select one: O a. $510,000 O b. $330,000 O C $540,000 O d. $480,000
Morris Company allocates manufacturing overhead based on machine hours. Each chair produced should require 4 machine hours. According to the static budget, the following is expected to incur: 2,200 machine hours per month (550 chairs x 4 hours per chair) $11,440 in variable manufacturing overhead costs $9,000 in fixed manufacturing overhead costs During January, Morris Company actually used 2,100 machine hours to make 510 chairs. The company spent $6,800 in variable manufacturing overhead costs and $9,100 in fixed manufacturing overhead costs. What is the fixed overhead cost variance?
Krump Corporation's cost formula for its manufacturing overhead is $30,600 per month plus $64 per machine-hour. For the month of March, the company planned for activity of 7,900 machine-hours, but the actual level of activity was 7,880 machine- hours. The actual manufacturing overhead for the month was $558,610. The activity variance for manufacturing overhead in March would be closest to: O $22,410 U $22,410 F O $1,280 F O $1,280 U
Mcniff Corporation makes a range of products. The company's predetermined overhead rate is $17 per direct labor-hour, which was calculated using the following budgeted data: Variable manufacturing overhead $ 80,000 Fixed manufacturing overhead $ 260,000 Direct labor-hours 20,000 Management is considering a special order for 710 units of product O96S at $65 each. The normal selling price of product O96S is $76 and the unit product cost is determined as follows: Direct materials $ 38.00 Direct labor 17.00 Manufacturing overhead applied 17.00 Unit product cost $ 72.00 If the special order were accepted, normal sales of this and other products would not be affected. The company has ample excess capacity to produce the additional units. Assume that direct labor is a variable cost, variable manufacturing overhead is really driven by direct labor-hours, and total fixed manufacturing overhead would not be affected by the special…
Hermansen Corporation produces large commercial doors for warehouses and other facilities. In the most recent month, the company budgeted production of 5,100 doors. Actual production was 5,400 doors. According to standards, each door requires 3.8 machine-hours. The actual machine- hours for the month were 20,880 machine-hours. The standard supplies cost is $7.90 per machine-hour. The actual supplies cost for the month was $152,063. Supplies cost is an element of variable manufacturing overhead. The variable overhead efficiency variance for supplies cost is: a. b. C. d. $10,045 Favorable $10,045 Unfavorable $2,844 Favorable $2,844 Unfavorable

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