Myers Company uses a flexible budget for manufacturing overhead based on direct labor hours. Variable manufacturing overhead costs per direct labor hour are as follows: Indirect labor Indirect materials Utilities $1.30 0.80 0.30 Fixed overhead costs per month are Supervision $4,100, Depreciation $1.100, and Property Taxes $800. The company believes it will normally operate in a range of 7,100-11.300 direct labor hours per month. Prepare a monthly manufacturing overhead flexible budget for 2020 for the expected range of activity, using increments of 1,400 direct labor hours. (List variable costs before foxed costs)

Myers Company uses a flexible budget for manufacturing overhead based on direct labor hours. Variable manufacturing overhead costs per direct labor hour are as follows: Indirect labor Indirect materials Utilities $1.30 0.80 0.30 Fixed overhead costs per month are Supervision $4,100, Depreciation $1.100, and Property Taxes $800. The company believes it will normally operate in a range of 7,100-11.300 direct labor hours per month. Prepare a monthly manufacturing overhead flexible budget for 2020 for the expected range of activity, using increments of 1,400 direct labor hours. (List variable costs before foxed costs)

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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Manuel Company predicts it will operate at 80% of its productive capacity. Its overhead allocation base is DLH and its standard amount per allocation base is 0.5 DLH per unit. The company reports the following for this period. Flexible Budget at 80% Capacity Actual Results Production (in units) 54,750 51,600 Overhead Variable overhead $ 301,125 Fixed overhead 54,750 Total overhead $ 355,875 $ 367,700 1. Compute the standard overhead rate. Hint: Standard allocation base at 80% capacity is 27,375 DLH, computed as 54,750 units × 0.5 DLH per unit.2. Compute the standard overhead applied.3. Compute the total overhead variance. (Indicate the effect of the variance by selecting favorable, unfavorable, or no variance.)
Your answer is partially correct. Indigo Company uses a flexible budget for manufacturing overhead based on direct labor hours. Budgeted variable manufacturing overhead costs per direct labor hour are as follows. Indirect labor Indirect materials Utilities $1.10 0.80 0.50 Budgeted fixed overhead costs per month are Supervision $4,800, Depreciation $1,440, and Property Taxes $960. The company believes it will normally operate in a range of 8,400-12,000 direct labor hours per month. Prepare a monthly manufacturing overhead flexible budget for 2022 for the expected range of activity, using increments of 1,200 direct labor hours. (List variable costs before fixed costs.)
Domestic
Accounting - Budgeted Manufacturing Costs
Myers Company uses a flexible budget for manufacturing overhead based on direct labor hours. Variable manufacturing overhead costs per direct labor hour are as follows: Indirect labor Indirect materials Utilities $1.00 0.70 0.40 Fixed overhead costs per month are Supervision $4,000, Depreciation $1,200, and Property Taxes $800. The company believes it will normally operate in a range of 7,000-10.000 direct labor hours per month. Prepare a monthly manufacturing overhead flexible budget for 2020 for the expected range of activity, using increments of 1.000 direct labor hours. (List variable costs before fixed costs)
Matolo ltd manufactures two types of products BELL and CELL.The following budgeted information is available PRODUCT BELL CELL Budgeted Production and Sales in Units 550 550 Labour hours per unit 100 100 Variable cost per unit K15,000 K16,000 Total budgeted labour hours 110,000 240,000 The company has general fixed overheads amounting to K13,010,000 which is absorbed using labour hour rate. The analysis of the K13,010,000 general fixed overheads revealed the following: Overhead item K’000 Setup costs 6,000 Inspection 3,510 Labour costs…
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Grinzaid Home Nursing specializes in home nursing services. It bases its overhead on the flexible budget cost function of $33,000 + ($2.40 x labor hours). Normal volume is based on 12,000 labor hours. Standards call for 2 labor hours per patient visited.For the current period, the operating results were as follows: actual labor hours worked 11,400, patient visits 5,800, actual variable overhead costs $28,460, actual fixed overhead costs $31,950. How much of the budget variance is due to variable costs?
Management at Marvin Limited has provided the following budgeted and actual annual figures for one of its products based on variable costing: Output (production and sales) Sales revenue Direct materials Direct labour Variable overheads Fixed overheads Required: a) b) c) Budget 18,000 units £ Calculate the following: 576,000 (27,000 metres) 132,300 (28,800 hours) 273,600 (28,800 hours) 115,200 8,000 Construct a flexed budget for the actual units made and sold. i. ii. iii. iv. Use your answer to a) above to calculate the sales volume contribution margin variance and interpret this result. Actual 20,200 units £ 828,200 (27,270 metres) 136,350 (40,400 hours) 391,880 (40,400 hours) 193,920 12,150 Sales price variance; Direct materials price and usage variances; Direct labour wage rate and efficiency variances; and Fixed overhead expenditure variance. d) Briefly explain how standard costing and variance analysis support budgetary control within an organisation.
Use the following information for the Exercises below. (Algo) [The following information applies to the questions displayed below.] Manuel Company predicts it will operate at 80% of its productive capacity. Its overhead allocation base is DLH and its standard amount per allocation base is 0.5 DLH per unit. The company reports the following for this period. Production (in units) Overhead Variable overhead Fixed overhead Total overhead Flexible Budget at 80% Capacity 50,250 Required 1 Required 2 $ 276,375 50, 250 $ 326,625 Exercise 21-18 (Algo) Volume and controllable variances LO P4 Actual Results 44,400 (1) Compute the overhead volume variance. Indicate variance as favorable or unfavorable. (2) Compute the overhead controllable variance. Indicate variance as favorable or unfavorable. Budgeted (flexible) overhead Standard overhead applied Volume variance $ 308,300 Complete this question by entering your answers in the tabs below. Volume Variance Compute the overhead volume variance.…
Presented below is a flexible manufacturing overhead budget for Ayayai Manufacturing, which manufactures fine timepieces: ✓ Activity Index: Standard direct labor hours 2,820 3,220 3,620 4,020 Variable costs Indirect materials $ 5,640 $ 6,440 $ 7,240 $ 8,040 Indirect labor 3,243 3,703 4,163 4,623 Utilities 7,332 8,372 9,412 10,452 Total variable 16,215 18,515 20,815 23,115 Fixed costs Supervisory salaries 1,210 1,210 1,210 1,210 Rent 2,815 2,815 2,815 2,815 Total fixed 4,025 4,025 4,025 4,025 Total costs $ 20,240 $ 22,540 $ 24,840 $ 27,140 The company applies the overhead on the basis of direct labor hours at $7.00 per direct labor hour and the standard hours per timepiece is 1/2 hour each. The company's actual production was 5,440 timepieces with 2,720 actual hours of direct labor. Normal capacity is 3,220 hours. Actual overhead was $20,400. (a) Compute the controllable and volume overhead variances. Identify whether each variance is favorable or unfavorable. (Round rate values to 2…
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