Paynesville Corporation manufactures and sells apreservative used in food and drug manufacturing. Thecompany carries no inventories. The master budgetcalls for the company to manufacture and sell 134,000liters at a budgeted price of $330 per liter this year.The standard direct cost sheet for one liter of thepreservative follows.Direct materialsDirect labor(2 pounds @ $21)(0.5 hours @ $58)$4229Variable overhead is applied based on direct laborhours. The variable overhead rate is $190 per direct-labor hour. The fixed overhead rate (at the masterbudget level of activity) is $95 per unit. All non-manufacturing costs are fixed and are budgeted at$2.9 million for the coming year.At the end of the year, the costs analyst reported thatthe sales activity variance for the year was $984,000unfavorable.The following is the actual income statement (inthousands of dollars) for the year.Sales revenueLess variable costs.Direct materials.Direct laborVariable overheadTotal variable costsContribution marginLess fixed costs.Fixed manufacturing overheadNon-manufacturing costs< Prev3 of 5*******O|||Next >$42,5984,4681,1801,100$ 6,748$35,8501,2201,400 SavedSales revenue$42,598Less variable costsDirect materialsDirect labor4,4681,180Variable overhead1,100Total variable costs.$6,748Contribution margin$35,850Less fixed costs1,220Fixed manufacturing overheadNon-manufacturing costs1,400Total fixed costs$ 2,620Operating profit$33,230Required:Prepare a profit variance analysis. (Enter your answersin thousands of dollars. Indicate the effect of eachvariance by selecting "F" for favorable, or "U" forunfavorable. If there is no effect, do not select eitheroption.)ActualSales revenueMaterialsDirect laborVariable overheadTotal variable costsContribution marginFixed costs:apter 16 As...ManufacturingNon-manufacturinglelpSave & Exit SubmitCheck my work42,5984,4681,1801,1006,748$ 35,8501,220$

Profit Variance analysis- Gross profit analysis is determining the reasons for the change in gross…

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 134,000 liters at a budgeted price of $330 per liter this year. The standard direct cost sheet for one liter of the preservative follows. Direct materials (2 pounds @ $21) $42

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 134,000 liters at a budgeted price of $330 per liter this year. The standard direct cost sheet for one liter of the preservative follows. Direct materials (2 pounds @ $21) $42

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter9: Evaluating Variances From Standard Costs

Section: Chapter Questions

Problem 3E: Salisbury Bottle Company manufactures plastic two-liter bottles for the beverage industry. The cost...

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Salisbury Bottle Company manufactures plastic two-liter bottles for the beverage industry. The cost standards per 100 two-liter bottles are as follows: At the beginning of March, Salisburys management planned to produce 500,000 bottles. The actual number of bottles produced for March was 525,000 bottles. The actual costs for March of the current year were as follows: a. Prepare the March manufacturing standard cost budget (direct labor, direct materials, and factory overhead) for Salisbury, assuming planned production. b. Prepare a budget performance report for manufacturing costs, showing the total cost variances for direct materials, direct labor, and factory overhead for March. c. Interpret the budget performance report.
Adam Corporation manufactures computer tables and has the following budgeted indirect manufacturing cost information for the next year: If Adam uses the step-down (sequential) method, beginning with the Maintenance Department, to allocate support department costs to production departments, the total overhead (rounded to the nearest dollar) for the Machining Department to allocate to its products would be: a. 407,500. b. 422,750. c. 442,053. d. 445,000.
Gent Designs requires three units of part A for every unit of Al that it produces. Currently, part A is made by Gent, with these per-unit costs in a month when 4.000 units were produced: Variable manufacturing overhead is applied at $1.00 per unit. The other $0.30 of overhead consists of allocated fixed costs. Gent will need 6,000 units of part A for the next years production. Cory Corporation has offered to supply 6,000 units of part A at a price of $7.00 per unit. It Gent accepts the offer, all of the variable costs and $1,200 of the fixed costs will be avoided. Should Gent Designs accept the offer from Cory Corporation?
Nashler Company has the following budgeted variable costs per unit produced: Budgeted fixed overhead costs per month include supervision of 98,000, depreciation of 76,000, and other overhead of 245,000. Required: 1. Prepare a flexible budget for all costs of production for the following levels of production: 160,000 units, 170,000 units, and 175,000 units. 2. What is the per-unit total product cost for each of the production levels from Requirement 1? (Round each unit cost to the nearest cent.) 3. What if Nashler Companys cost of maintenance rose to 0.22 per unit? How would that affect the unit product costs calculated in Requirement 2?
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 118,000 liters at a budgeted price of $210 per liter this year. The standard direct cost sheet for one liter of the preservative follows. (2 pounds @ $13) (0.5 hours @ $42) Direct materials $26 Direct labor 21 Variable overhead is applied based on direct labor hours. The variable overhead rate is $110 per direct-labor hour. The fixed overhead rate (at the master budget level of activity) is $55 per unit. All non-manufacturing costs are fixed and are budgeted at $2.1 million for the coming year. At the end of the year, the costs analyst reported that the sales activity variance for the year was $648,000 unfavorable. The following is the actual income statement (in thousands of dollars) for the year. Sales revenue $23,798 Less variable costs Direct materials 2,578 2,360 5,830 Direct labor…
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 118,000 liters at a budgeted price of $210 per liter this year. The standard direct cost sheet for one liter of the preservative follows. (2 pounds @ $13) (0.5 hours @ $42) Direct materials $26 Direct labor 21 Variable overhead is applied based on direct labor hours. The variable overhead rate is $110 per direct-labor hour. The fixed overhead rate (at the master budget level of activity) is $55 per unit. All non-manufacturing costs are fixed and are budgeted at $2.1 million for the coming year. At the end of the year, the costs analyst reported that the sales activity variance for the year was $648,000 unfavorable. The following is the actual income statement (in thousands of dollars) for the year. Sales revenue $23,798 Less variable costs Direct materials 2,578 2,360 Direct labor 5,830…
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 122,000 liters at a budgeted price of $240 per liter this year. The standard direct cost sheet for one liter of the preservative follows. (2 pounds @ $15) (0.5 hours @ $46) Direct materials $30 Direct labor 23 Variable overhead is applied based on direct labor hours. The variable overhead rate is $130 per direct-labor hour. The fixed overhead rate (at the master budget level of activity) is $65 per unit. All non-manufacturing costs are fixed and are budgeted at $2.3 million for the coming year. es At the end of the year, the costs analyst reported that the sales activity variance for the year was $732,000 unfavorable. Required Prepare a flexible budget for Paynesville for the year. (Enter your answers in thousands of dollars.)
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)…
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 126,000 liters at a budgeted price of $270 per liter this year. The standard direct cost sheet for one liter of the preservative follows. Direct materials (2 pounds @ $17) $ 34 Direct labor (0.5 hours @ $50) 25 Variable overhead is applied based on direct labor hours. The variable overhead rate is $150 per direct-labor hour. The fixed overhead rate (at the master budget level of activity) is $75 per unit. All non-manufacturing costs are fixed and are budgeted at $2.5 million for the coming year. At the end of the year, the costs analyst reported that the sales activity variance for the year was $816,000 unfavorable. The following is the actual income statement (in thousands of dollars) for the year. Sales revenue $ 32,718 Less variable…
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 126,000 liters at a budgeted price of $270 per liter this year. The standard direct cost sheet for one liter of the preservative follows. Direct materials (2 pounds @ $17) $ 34 Direct labor (0.5 hours @ $50) 25 Variable overhead is applied based on direct labor hours. The variable overhead rate is $150 per direct labor hour. The fixed overhead rate (at the master budget level of activity) is $75 per unit. All non-manufacturing costs are fixed and are budgeted at $2.5 million for the coming year. At the end of the year, the costs analyst reported that the sales activity variance for the year was $816,000 unfavorable. RequiredPrepare a flexible budget for Paynesville for the year. (Enter your answers in thousands of dollars.)
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 (2 pounds @ $4) $ 8 Direct labor (0.5 hours @ $24) 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. The following is the actual income statement (in thousands of dollars) for the year. Sales revenue $ 7,238 Less variable 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 140,000 liters at a budgeted price of $375 per liter this year. The standard direct cost sheet for one liter of the preservative follows. Direct materials (2 pounds @ $24) $ 48 Direct labor (0.5 hours @ $64) 32 Variable overhead is applied based on direct labor hours. The variable overhead rate is $220 per direct-labor hour. The fixed overhead rate (at the master budget level of activity) is $110 per unit. All non-manufacturing costs are fixed and are budgeted at $3.2 million for the coming year. At the end of the year, the costs analyst reported that the sales activity variance for the year was $1,110,000 unfavorable. The following is the actual income statement (in thousands of dollars) for the year. Sales revenue $ 50,638 Less variable…