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 $1.20 Variable Costs Indirect labor Indirect materials Utilities 0.80 Fixed overhead costs per month are Supervision $3,500, Depreciation $1,300, and Property Taxes $700. The company believes it will normally operate in a range of 5,500-8,500 direct labor hours per month Assume that in July 2020, Myers Company incurs the following manufacturing overhead costs. 0.40 Fixed Costs $8,720 Supervision 5,830 Depreciation Property taxes 2.590 $3,500 Budget 1,300 700 (a) Prepare a flexible budget performance report, assuming that the company worked 7,500 direct labor hours during the month. (List variable costs before fixed costs.) MYERS COMPANY Manufacturing Overhead Flexible Budget Report For the Month Ended July 31, 2020 Actual Costs Difference Favorable Unfavorable Neither Favorable nor Unfavorable

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 $1.20 Variable Costs Indirect labor Indirect materials Utilities 0.80 Fixed overhead costs per month are Supervision $3,500, Depreciation $1,300, and Property Taxes $700. The company believes it will normally operate in a range of 5,500-8,500 direct labor hours per month Assume that in July 2020, Myers Company incurs the following manufacturing overhead costs. 0.40 Fixed Costs $8,720 Supervision 5,830 Depreciation Property taxes 2.590 $3,500 Budget 1,300 700 (a) Prepare a flexible budget performance report, assuming that the company worked 7,500 direct labor hours during the month. (List variable costs before fixed costs.) MYERS COMPANY Manufacturing Overhead Flexible Budget Report For the Month Ended July 31, 2020 Actual Costs Difference Favorable Unfavorable Neither Favorable nor Unfavorable

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.)
The measure of activity in the standard costing system used at Esta GmbH is machining hours. The company's flexible manufacturing overhead budget and then data regarding the most recent period's operations are given below: Flexible Budget: Budgeted Level of Activity: 6,600 machining hours Overhead costs at the Budgeted activity level: Variable Overhead Cost: $17,226 Fixed Overhead Cost: $13,992 Most Recent period's operations: Actual level of activity: 7,200 machining hours Standard level of activity for output: 7,140 machining hours Actual total variable overhead cost: $17,856 Actual total fixed overhead cost: $14,256 PART A What is the variable overhead rate variance? (936 favorable, 481 unfavorable, 630 unfavorable, 779 favorable, OR 2,267 favorable) PART B What is the variable overhead efficiency variance? (157 unfavorable, 1409 unfavorable, 1566 unfavorable, 1488 unfavorable, OR 149 unfavorable) PART C What is the fixed overhead budget variance? (264 unfavorable, 1272…
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.)
Ocean Company makes calendars. Information on cost per unit is as follows: Direct materials $1.50 Direct labor 1.20 Variable overhead 0.90 Variable marketing expense 0.40 Fixed marketing expenses totaled $12,000 and fixed administrative expenses totaled $32,000. The price per calendar is $15. What is the break-even point in units?
Nevada Corporation makes a product with the following standard costs: Standard Price or Rate Standard Quantity or Hours 6.4 ounces $ 0.4 hours S 0.4 hours $ 3.00 per ounce 13.00 per hour 5.00 per hour The company reported the following results concerning this product in March. Direct materials Direct labor Variable overhead. Originally budgeted output Actual output Raw materials used in production Actual direct labor-hours Purchases of raw materials Actual price of raw materials Actual direct labor rate Actual variable overhead rate $ S $ O $3,277 F O $3,390 U O $3,390 F O $3,277 U Standard Cost Per Unit S S S 4,800 units 4,900 units 30,230 ounces 1,910 hours 32,600 ounces 2.90 per ounce 12.40 per hour 4.90 per hour 19.20 5.20 2.00 The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased. The materials quantity variance for March is:
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…
A company allocates $7.50 of overhead per direct labor hour to products. The company uses a plantwide overhead rate with direct labor hours as the allocation base. Given the amounts below, how many direct labor hours does the company expect in department 2? Budgeted: Department 1 Department 2 Manufacturing overhead costs $ 74,358 $ 49,572 Direct labor hours 6,610 DLH ? DLH Machine hours 700 MH 800 MH
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Palladium Inc. produces a variety of household cleaning products. Palladium's controller has developed standard costs for the following four overhead items: Overhead Item Total Fixed Cost Variable Rate per Direct Labor Hour Maintenance Power Indirect labor Rent $86,000 140,000 $0.20 0.45 2.10 35,000 Next year, Palladium expects production to require 88,000 direct labor hours Exercise 9-63 Flexible Budget for Various Levels of Activity Refer to the information for Palladium Inc. above. Required: 1. Prepare an overhead budget for the expected level of direct labor hours for the coming year. 2. Prepare an overhead budget that reflects production that is 15% higher than expected and for production that is 15% lower than expected.
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.…