NSF Lube is a fast-growing chain of oil-change stores. The following data are available for last year's services.• NSF Lube performed 469,200 oil changes last year. It had budgeted 434,400 oil changes, averaging 12 minutes each.• Standard variable labor and support costs per oil change were as follows.Direct oil specialist services: 12 minutes at $25 per hourVariable support staff and overhead: 10.5 minutes at $20 per hour$5.003.50Fixed overhead costs:Annual budget $1,038,400• Fixed overhead is applied at the rate of $2.40 per oll change.• Actual oil change costs:Direct ofl specialist services: 469, 200 changes averaging 19 minutes at $28 per hourVariable support staff and overhead: 0.19 labor-hours at $18 per hour x 469, 200 changesFixed overhead$4,160, 2401,604,6641,380,000Required:a. Prepare a cost variance analysis for each variable cost for last year.b. Prepare a fixed overhead cost variance analysis.

Cost Variance- Cost variance is the procedure of evaluating the fiscal performance of your task.…

NSF Lube is a fast-growing chain of oil-change stores. The following data are available for last year's services. - NSF Lube performed 469,200 oil changes last year. It had budgeted 434,400 ol changes, averaging 12 minutes each. - Standard variable labor and support costs per oil change were as follows. Direct oil specialist services: 12 minutes at $25 per hour Variable support staff and overhead: 10.5 minutes at $20 per hour $5.00 3.50 Fixed overhead costs:

NSF Lube is a fast-growing chain of oil-change stores. The following data are available for last year's services. - NSF Lube performed 469,200 oil changes last year. It had budgeted 434,400 ol changes, averaging 12 minutes each. - Standard variable labor and support costs per oil change were as follows. Direct oil specialist services: 12 minutes at $25 per hour Variable support staff and overhead: 10.5 minutes at $20 per hour $5.00 3.50 Fixed overhead costs:

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter7: Allocating Costs Of Support Departments And Joint Products

Section: Chapter Questions

Problem 1CE: The expected costs for the Maintenance Department of Stazler, Inc., for the coming year include:...

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The expected costs for the Maintenance Department of Stazler, Inc., for the coming year include: Fixed costs (salaries, tools): 64,900 per year Variable costs (supplies): 1.35 per maintenance hour Estimated usage by: Actual usage by: Required: 1. Calculate a single charging rate for the Maintenance Department. 2. Use this rate to assign the costs of the Maintenance Department to the user departments based on actual usage. Calculate the total amount charged for maintenance for the year. 3. What if the Assembly Department used 4,000 maintenance hours in the year? How much would have been charged out to the three departments?
Wetherbee Tech Services (WTS) is a chain of computer maintenance technicians for households and small businesses. The following data are available for last year's services: • WTS recorded 121,100 tech calls last year. It had budgeted 127,200 calls, averaging 90 minutes each. • Standard variable labor and support costs per tech call were as follows: Direct IT specialist services: 90 minutes at $54 per hour Variable support staff, supplies, and overhead: 30 minutes at $24 per hour • Fixed overhead costs: Annual budget $4,142,200 Fixed overhead is applied at the rate of $36.00 per call. • Actual tech service call costs: Direct IT specialist services: 121,100 calls averaging 84 minutes at $56.00 per hour Variable support staff, supplies, and overhead: averaging 40 minutes per call at $22.50 per hour x 121,100 calls Fixed overhead Required: a. Prepare a cost variance analysis for each variable cost for last year. b. Prepare a fixed overhead cost variance analysis. Complete this question by…
Wetherbee Tech Services (WTS) is a chain of computer maintenance technicians for households and small businesses. The following data are available for last year's services: • WTS recorded 120,600 tech calls last year. It had budgeted 126,200 calls, averaging 90 minutes each. • Standard variable labor and support costs per tech call were as follows: . Direct IT specialist services: 90 minutes at $54 per hour Variable support staff, supplies, and overhead: 30 minutes at $24 per hour Fixed overhead costs: Annual budget $4,141,200 Fixed overhead is applied at the rate of $36.00 per call. Actual tech service call costs: Direct IT specialist services: 120,600 calls averaging 84 minutes at $56.00 per hour Variable support staff, supplies, and overhead: averaging 40 minutes per call at $22.50 per hour x 120,600 calls Fixed overhead Required: a. Prepare a cost variance analysis for each variable cost for last year. b. Prepare a fixed overhead cost variance analysis. Complete this question by…
Wetherbee Tech Services (WTS) is a chain of computer maintenance technicians for households and small businesses. The following data are available for last year's services: WTS recorded 122,000 tech calls last year. It had budgeted 129,000 calls, averaging 90 minutes each. • Standard variable labor and support costs per tech call were as follows: Direct IT specialist services: 90 minutes at $54 per hour Variable support staff, supplies, and overhead: 30 minutes at $24 per hour • Fixed overhead costs: Annual budget $4,144,000 • Fixed overhead is applied at the rate of $36.00 per call. Actual tech service call costs: Direct IT specialist services: 122,000 calls averaging 84 minutes at $56.00 per hour Variable support staff, supplies, and overhead: averaging 40 minutes per call at $22.50 per hour x 122,000 calls Fixed overhead Required: a. Prepare a cost variance analysis for each variable cost for last year. b. Prepare a fixed overhead cost variance analysis. Complete this question by…
• WTS recorded 120,700 tech calls last year. It had budgeted 126,400 calls, averaging 90 minutes each. Standard variable labor and support costs per tech call were as follows: • Direct IT specialist services: 90 minutes at $54 per hour Variable support staff, supplies, and overhead: 30 minutes at $24 per hour • Fixed overhead costs: Annual budget $4,141,400 • Fixed overhead is applied at the rate of $36.00 per call. • Actual tech service call costs: Direct IT specialist services: 120,700 calls averaging 84 minutes at $56.00 per hour Variable support staff, supplies, and overhead: averaging 40 minutes per call at $22.50 per hour × 120,700 calls Fixed overhead Required: a. Prepare a cost variance analysis for each variable cost for last year. b. Prepare a fixed overhead cost variance analysis. Complete this question by entering your answers in the tabs below. Required A Required B $81 12 $ 9,462,880 1,810,500 4,413,000 Prepare a cost variance analysis for each variable cost for last…
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 $86,000 $0.20 Power $0.45 Indirect Labor $140,000 $2.10 Rent $35,000 Next year, Palladium expects production to require 88,000 direct labor hours. Prepare an overhead budget for the expected level of direct labor hours for the coming year.
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 DirectLabor Hour Maintenance $ 86,000 $0.20 Power 0.45 Indirect labor 140,000 2.10 Rent 35,000 Next year, Palladium expects production to require 90,000 direct labor hours. Required: 1. Prepare an overhead budget for the expected level of direct labor hours for the coming year. Palladium Inc. Overhead Budget For the Coming Year Variable costs: Rate per Hour Activity Level 90,000 Hours Maintenance $ $ Power Indirect labor Total variable cost $ Fixed costs: Maintenance $ Indirect labor Rent Total fixed costs $ Total overhead costs $ 2. Prepare an overhead budget that reflects…
Catalytic Chemical Corporation has a significant level of manufacturing overhead. After preparing their budget for the next year, management expects the following overhead costs (the cost driver for each overhead cost pool is also shown): Activity Total Cost Cost Driver Maintenance $20,000 Machine hours Materials receiving 80,000 Shipments received Machine setups 50,000 # of setups Inspection 30,000 # of inspections The expected activity for the year for various cost drivers is: Direct Labor Hours 40,000 Machine Hours 20,000 Shipments Received 4,000 Setups 200 Quality Inspections 8,000 The company is considering accepting a significant production contract. Estimates for the contract are as follows: Direct materials $100,000 Direct labor (7,500 hours) $150,000 Number of material shipments received 290 Number of inspections 50 Number of setups 35 Number of machine houre 3,000…
Blue Devil Inc. has a significant level of manufacturing overhead. After preparing their budget for the next year, management expects the following overhead costs (the cost driver for each overhead cost pool is also shown): Activity Total Cost Cost Driver Maintenance $20,000 Machine hours Materials receiving 80,000 Shipments received Machine setups 50,000 Number of setups Inspection 40,000 Number of inspections The expected activity for the year for various cost drivers is: Direct Labor Hours 40,000 Machine Hours 20,000 Shipments Received 4,000 Setups 200 Quality Inspections 8,000 The company is considering accepting a significant production contract. Estimates for the contract are as follows: Direct materials $100,000 Direct labor (7,500 hours) $150,000 Number of material shipments received 290 Number of inspections 50 Number of setups 35 Number of machine hour 3,000…
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 DirectLabor Hour Maintenance $ 86,000 $0.20 Power 0.45 Indirect labor 140,000 2.10 Rent 35,000 Next year, Palladium expects production to require 90,000 direct labor hours. Required: Question Content Area 1. Prepare an overhead budget for the expected level of direct labor hours for the coming year. Palladium Inc.Overhead BudgetFor the Coming Year Variable costs: Rate per Hour Activity Level 90,000 Hours blank Maintenance $fill in the blank ddf6cc027003019_1 $fill in the blank ddf6cc027003019_2 blank Power fill in the blank ddf6cc027003019_3 fill in the blank ddf6cc027003019_4 blank Indirect labor fill in the blank ddf6cc027003019_5 fill in the blank…
Balcom Enterprises is planning to introduce a new product that will sell for $110 a unit. Manufacturing cost estimates for 27,000 units for the first year of production are: • Direct materials $1,269,000. • Direct labor $528,000 (based on $16 per hour x 33,000 hours). Although overhead has not be estimated for the new product, monthly data for Balcom's total production for the last two years has been analyzed using simple linear regression. The analysis results are as follows: Dependent variable Independent variable Intercept Coefficient on independent variable Coefficient of correlation R² Multiple Choice Based on this information, what is the total overhead cost for an estimated activity level of 43,000 direct labor-hours? $392,000 $144,000 $804,000 Factory overhead costs Direct labor hours. $134,000 $ $258.000 6.00 0.953 0.842
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.