Calculate the direct materials price variance of this general accounting question Nautilus Craftworks manufactures custom fixtures for high-end cruise ships,requiring specialized labor and premium metal alloys. The company usesstandard costs for its flexible budget. For the second quarter of 2023, the directmaterial and direct labor standards for one of its luxury products were asfollows:••Materials: 1.8 pounds per unit; $5.50 per poundLabor: 2.5 hours per unit; $20.00 per hourDuring the second quarter, Nautilus Craftworks produced 6,000 units of thisproduct. At the end of the quarter, an examination of the materials recordsshowed that the company used 9,500 pounds of materials and actual totalmaterial costs were $53,200.Calculate the Direct Materials Price Variance.

Step 1: Define Direct Materials Price VarianceDirect Materials Price Variance measures the…

Answered: Nautilus Craftworks manufactures custom…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter7: Budgeting

Section: Chapter Questions

Problem 5EB: Cloud Shoes manufactures recovery sandals and is planning on producing 12.000 units in March and...

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Santana Rey expects sales of Business Solutions’ line of computer workstation furniture to equal 300 workstations (at a sales price of $3,700 each) for 2021. The workstations’ manufacturing costs include the following. Direct materials $ 760 per unit Direct labor $ 300 per unit Variable overhead $ 60 per unit Fixed overhead $ 14,400 per year Selling and administrative expenses for these workstations follow. Variable $ 35 per unit Fixed $ 3,500 per year Santana is considering how many workstations to produce in 2021. She is confident that she will be able to sell any workstations in her 2021 ending inventory during 2022. However, Santana does not want to overproduce as she does not have sufficient storage space for many more workstations. Required: 1. Complete the following income statements using absorption costing. 2. Complete the following income statements using variable costing. 3. Which costing method, absorption or variable, yields the higher income when 320 workstations are…
Alpena Corporation manufactures smartphone and tablet cases. The following is the cost of each unit. Materials Labor Variable overhead Fixed overhead ($1,695,000 per year; 150,000 units per year) Total Decatur Devices has approached Alpena with an offer to buy 3,000 cases at a price of $18.20 each for its new specialty tablet designed for health care workers. The regular price of an Alpena case is $28.50. Alpena has the total capacity to produce 180,000 units without increasing its fixed overhead. Decatur Devices requires that each case use its branding, which requires a more expensive embossing step. This will result in an additional $3.05 per case labor cost. The material cost of of the Decatur case will be the same as for the current models. The Decatur order will also require a one-time rental of embossing equipment for $5,709. Required: a. Prepare a schedule to show the impact of filling the Decatur Devices order on Alpena's profits for the year. b. Would you recommend that Alpena…
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InteliSystems needs 79,000 optical switches next year . By outsourcing them, InteliSystems can use its idle facilities to manufacture another product that will contribute $140,000 to operating income, but none of the fixed costs will be avoidable. Should InteliSystems make or buy the switches? Show your analysis based on the information in the table below for making 70,000 switches.
Your bike helmet company is expecting demand for an additional 4,000 helmets in the upcoming year. While you have the capacity to handle the additional demand, a potential supplier has offered to make the 4,000 helmets for $9 per helmet. Other information from the financial accounting system is listed below. Should you make or buy the helmets? Commuter bike helmet Direct material Direct labor Manufacturing overhead: variable Non-manufacturing overhead: variable Total variable cost Manufacturing overhead: fixed Non-manufacturing overhead: fixed Total fixed cost Total cost Commuter helmet price Machine hour $6.54 $1.89 $1.07 $0.86 $10.36 $1.78 $0.98 $2.76 $13.12 $16.00 0.57
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Alpena Corporation manufactures smartphone and tablet cases. The following is the cost of each unit. $ 7.80 3.40 1.40 10.80 $23.40 Materials Labor Variable overhead Fixed overhead ($1,620,000 per year; 150,000 units per year) Total Decatur Devices has approached Alpena with an offer to buy 3,000 cases at a price of $18.70 each for its new specialty tablet designed for health care workers. The regular price of an Alpena case is $31.00. Alpena has the total capacity to produce 180,000 units without increasing its fixed overhead. Decatur Devices requires that each case use its branding, which requires a more expensive embossing step. This will result in an additional $3.30 per case labor cost. The material cost of of the Decatur case will be the same as for the current models. The Decatur order will also require a one-time rental of embossing equipment for $4,704. Required: a. Prepare a schedule to show the impact of filling the Decatur Devices order on Alpena's profits for the year. b.…
The Bremer Co. manufactures cordless telephones Bremer is planning to implement a JIT production system, which requires annual tooling costs of $150,000. Bremer estimates that the following annual benefits would arise from JIT production. a. Average inventory will decline by $700,000 from $900,000 to $200,00 b. Insurance, space, materials handling, and setup costs, which currently total $200,00 would decline by 30% c. The emphasis on quality inherent in JIT system would reduce rework costs by 20% Bremer currently incurs $350,000 on rework. d. Better quality would eneble Bremer to raise the prices of its products by $3 per unit. Bremer sells $30,000 unit each year. Bremer required rate of return on inventory investment is 12% per year Required: Calculate the net benefit or cost to the Bremer Corporation From implementing a JIT production system.
Yelk Garage uses time and materials pricing. It is setting prices for next year using the following information: Labor rate, including fringe benefits $ 68 per hour Annual labor hours 3,100 hours Annual materials purchases $ 834,000 Materials purchasing, handling, and storage $ 50,040 Overhead for depreciation, taxes, insurance, etc. $ 68, 200 Target profit margin for both labor and materials 20 % What should Yelk set as the materials markup per dollar of materials used? Multiple Choice 26%. 6%. 20 %. 38%.32%.
Fairchild produces jet bridges for many domestic and international airports. Cost information for 's jet bridges is as follows: Data table Variable costs per jet bridge: Materials 5,300 Labor 3,300 Manufacturing Overhead 6,600 Selling 900 General and administrative 1,100 Fixed costs for the first 3 quarters of 2020: $ 999,000 allocated based on budgeted production $ 440,000 $ 785,000 Manufacturing Overhead Selling General and administrative Additional information for the first three quarters of 2020 for Fairchild are shown below: Data table 1st Quarter 2nd Quarter 3rd Quarter Budgeted production 71 77 74 Actual production 71 77 74 Sales 66 71 64 Sales price: $37,000 per jet bridge Fixed selling costs by quarter 150,000 150,000 140,000 Fixed G&A costs by quarter 345,000 220,000 220,000 Requirement 1. Prepare an absorption costing income statement. Requirement 2. Prepare a variable costing income statement Requirement 3. Prepare a throughput costing income statement.
Cloud Shoes manufactures recovery sandals and is planning on producing 12.000 units in March and 11,500 in April. Each sandal requires 1.2 yards if material, which costs $3.00 per yard. The companys policy is to have enough material on hand to equal 15% of next months production needs and to maintain a finished goods inventory equal to 20% of the next months production needs. What is the budgeted cost of purchases for March?
Suppose that a company is spending 60,000 per year for inspecting, 30,000 for purchasing, and 40,000 for reworking products. A good estimate of nonvalue-added costs would be a. 70,000. b. 130,000. c. 40,000. d. 90,000. e. 100,000.

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