Paynesville Corporation manufactures and sells a preservative used in food and drug manufacturing. The company carries no inventories. The master budget calls for the company to manufacture and sell 100,000 liters at a budgeted price of $75 per liter this year. The standard direct cost sheet for one liter of the preservative follows. Direct materials Direct labor (2 pounds @ $4) (0.5 hours @ $24) $ 8 12 Variable overhead is applied based on direct labor hours. The variable overhead rate is $20 per direct-labor hour. The fixed overhead rate (at the master budget level of activity) is $10 per unit. All non-manufacturing costs are fixed and are budgeted at $1.2 million for the coming year. At the end of the year, the costs analyst reported that the sales activity variance for the year was $270,000 unfavorable. Required Prepare a flexible budget for Paynesville for the year. (Enter your answers in thousands of dollars.) PAYNESVILLE CORPORATION Flexible Budget (thousands of dollars) Variable costs: Total variable costs $ $ Fixed costs: Total fixed costs $ $

Paynesville Corporation manufactures and sells a preservative used in food and drug manufacturing. The company carries no inventories. The master budget calls for the company to manufacture and sell 100,000 liters at a budgeted price of $75 per liter this year. The standard direct cost sheet for one liter of the preservative follows. Direct materials Direct labor (2 pounds @ $4) (0.5 hours @ $24) $ 8 12 Variable overhead is applied based on direct labor hours. The variable overhead rate is $20 per direct-labor hour. The fixed overhead rate (at the master budget level of activity) is $10 per unit. All non-manufacturing costs are fixed and are budgeted at $1.2 million for the coming year. At the end of the year, the costs analyst reported that the sales activity variance for the year was $270,000 unfavorable. Required Prepare a flexible budget for Paynesville for the year. (Enter your answers in thousands of dollars.) PAYNESVILLE CORPORATION Flexible Budget (thousands of dollars) Variable costs: Total variable costs $ $ Fixed costs: Total fixed 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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0 Required information [The following information applies to the questions displayed below] Preble Company manufactures one product. Its variable manufacturing overhead is applied to production based on direct labor-hours and its standard cost card per unit is as follows: Direct materials: 5 pounds at $11 per pound Direct labor: 3 hours at $12 per hour $ 55 36 Variable overhead: 3 hours at $7 per hour 21 Total standard cost per unit $ 112 The planning budget for March was based on producing and selling 21,000 units. However, during March the company actually produced and sold 26,600 units and incurred the following costs: a. Purchased 154,000 pounds of raw materials at a cost of $9.50 per pound. All of this material was used in production. b. Direct laborers worked 63,000 hours at a rate of $13 per hour. c. Total variable manufacturing overhead for the month was $510,930. 5. If Preble had purchased 178,000 pounds of materials at $9.50 per pound and used 154,000 pounds in production,…
Gail Cleaners produces a commercial cleaning compound known as Carpex. The direct materials and direct labour standards for one unit of Carpex follow: Standard Quantity or Hours Standard Price or Rate Standard Cost Direct materials 4.10 kilograms $ 2.20 per kilogram $ 9.02 Direct labour 0.42 hour $ 8.00 per hour a 3.36 Variable overhead 0.42 hour $ 1.30 per hour 0.55 The budgeted fixed overhead cost is $14, 619 per month. The denominator activity level of the allocation base is 1,596 direct labour - hours. During the most recent month, the following activity was recorded: a. 9, 100 kilograms of material were purchased at a cost of $2.22 per kilogram. b. All of the material purchased was used to produce 3,800 units of Zoom. c. A total of 790 hours of direct labour time was recorded at a total labour cost of 9,243. d. The variable overhead cost was $1,580, and the fixed overhead cost was $31, 713.
Calgary Paper Company produces paper for photocopiers. The company has developed standard overhead rates based on a monthly capacity of 62,000 direct-labor hours as follows: Standard costs per unit (one box of paper): Variable overhead (2 direct-labor hours @ $4.5 per hour) $ 9 Fixed overhead (2 direct-labor hours @ $10 per hour) 20 Total $ 29 During April, 31,000 units were scheduled for production; however, only 26,000 units were actually produced. The following data relate to April. Actual direct-labor cost incurred was $848,000 for 53,000 actual hours of work. Actual overhead incurred totaled $843,800, of which $243,800 was variable and $600,000 was fixed. Required:Prepare two exhibits similar to Exhibit 11-6 and Exhibit 11-8 in the chapter, which show the following variances. State whether each variance is favorable or unfavorable, where appropriate.1. Variable-overhead spending variance.2. Variable-overhead efficiency variance.3.…
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Required information [The following information applies to the questions displayed below.] Preble Company manufactures one product. Its variable manufacturing overhead is applied to production based on direct labor-hours and its standard cost card per unit is as follows: Direct materials: 4 pounds at $10 per pound Direct labor: 2 hours at $16 per hour Variable overhead: 2 hours at $6 per hour $ 40 32 12 Total standard cost per unit $ 84 The planning budget for March was based on producing and selling 30,000 units. However, during March the company actually produced and sold 34,500 units and incurred the following costs: a. Purchased 150,000 pounds of raw materials at a cost of $9.20 per pound. All of this material was used in production. b. Direct laborers worked 62,000 hours at a rate of $17 per hour. c. Total variable manufacturing overhead for the month was $390,600. 11. What is the labor spending variance for March? (Indicate the effect of each variance by selecting "F" for…
Subject: Acounting
Gail Cleaners produces a commercial cleaning compound known as Carpex. The direct materials and direct labour standards for one unit of Carpex follow: Direct materials Direct labour Variable overhead Standard Quantity or Hours 4.10 kilograms 0.40 hour 0.40 hour Standard Price or Rate $ 2.20 per kilogram $10.00 per hour $ 1.30 per hour Standard Cost $9.02 4.00 0.52 The budgeted fixed overhead cost is $14,614 per month. The denominator activity level of the allocation base is 800 direct labour- hours. Materials price variance Materials quantity variance During the most recent month, the following activity was recorded: a. 9,900 kilograms of material were purchased at a cost of $2.22 per kilogram. b. A total of 850 hours of direct labour time was recorded at a total labour cost of $9,110. c. The variable overhead cost was $1,580, and the fixed overhead cost was $14,704. Assume that the company produced 1,600 units during the month, using 6,600 kilograms of material in the production…