The cheque-clearing office of Pay Loans Company is responsible for processing all cheques that come to the company for payment.Managers at the company believe that variable overhead costs are essentially proportional to the number of labour-hours worked inthe office, so labour-hours are used as the activity base when preparing variable overhead budgets and performance reports. Data forOctober, the most recent month, appear below:Budgeted labour-hours1,500Actual labour-hours.1,460Standard labour-hours allowed for the actual number of cheques processed1,520Variable overhead costs:Office suppliesStaff coffee loungeIndirect labourTotal variable overhead costCostFormulaActual(perCostslabourIncurred inhour)October$ 0.908.503.90$1,2777104,325$ 5.30$ 6,312Fixed overhead at Pay Loans Company consists entirely of supervisory salaries and is applied at a rate of $6 per direct labour-hour.Actual fixed overhead costs totalled $6,400 in October, while the flexible budget was $6,000 for the month.Required:Prepare an overhead performance report for October for the cheque-clearing office that Includes both spending and efficiencyvariances for variable overhead and the budget varlance for fixed overhead. (Indicate the effect of each varlance by selecting "F" forfavourable, "U" for unfavourable, and "None" for no effect (l.e., zero variance).)Overhead costsCost Actual CostsFormula Incurred for(per labour- 1,460 Labour-hour)HoursVariable overhead costs:Office supplies$0.90 S1.277Staff coffee lounge0.50710Indirect labour3.904,325Total variable overhead cost.$5.30 S6,312Fixed overhead costs:Supervisory salariesTotal overhead cost6.400$12,712PAY LOANS COMPANYOverhead Performance ReportFor the Month Ended October 31FlexibleBudget Basedon 1,460Labour-HoursFlexibleBudget Basedon 1,520Labour-HoursTotal VarianceFNoneUBreakdown of the Total VarianceSpending (Budget)VarianceEfficiency Variance

Name: The cheque-clearing office of Pay Loans Company is responsible for pr
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Description: The cheque-clearing office of Pay Loans Company is responsible for processing all cheques that come to the company for payment.Managers at the company believe that variable overhead costs are essentially proportional to the number of labour-hours wo

The flexible budget is a budget that records the actual costs, flexible budget, and planning budget…

Business

Accounting

Prepare an overhead performance report for October for the cheque-clearing office that Includes both spending and efficiency variances for variable overhead and the budget variance for fixed overhead. (Indicate the effect of each varlance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (l.e., zero variance).) PAY LOANS COMPANY Overhead Performance Report For the Month Ended October 31 Overhead costs Cost Actual Costs Formula Incurred for (per labour- 1,460 Labour- hour) Hours Flexible Budget Based on 1,460 Labour-Hours Variable overhead costs: Office supplies $ 0.90 $ 1.277 Staff coffee lounge 0.50 710 Indirect labour 3.90 4.325 Total variable overhead cost $ 5.30 $ 6.312 Fixed overhead costs: Supervisory salaries Total overhead cost 6,400 $ 12,712 Flexible Budget Based on 1,520 Labour-Hours Breakdown of the Total Variance Spending (Budget) Total Variance Variance Efficiency Variance F None U

Prepare an overhead performance report for October for the cheque-clearing office that Includes both spending and efficiency variances for variable overhead and the budget variance for fixed overhead. (Indicate the effect of each varlance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (l.e., zero variance).) PAY LOANS COMPANY Overhead Performance Report For the Month Ended October 31 Overhead costs Cost Actual Costs Formula Incurred for (per labour- 1,460 Labour- hour) Hours Flexible Budget Based on 1,460 Labour-Hours Variable overhead costs: Office supplies $ 0.90 $ 1.277 Staff coffee lounge 0.50 710 Indirect labour 3.90 4.325 Total variable overhead cost $ 5.30 $ 6.312 Fixed overhead costs: Supervisory salaries Total overhead cost 6,400 $ 12,712 Flexible Budget Based on 1,520 Labour-Hours Breakdown of the Total Variance Spending (Budget) Total Variance Variance Efficiency Variance F None U

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Coronado Corporation accumulates the following data relative to jobs started and finished during the month of June 2022. Costs and Production Data Raw materials unit cost Raw materials units Direct labor payroll Direct labor hours Manufacturing overhead incurred Manufacturing overhead applied Machine hours expected to be used at normal capacity Budgeted fixed overhead for June Variable overhead rate per machine hour Fixed overhead rate per machine hour Overhead controllable variance $ Overhead volume variance Actual $ $4.40 11,000 $177,600 14,800 $242,800 Standard $4.30 10,100 $174,420 15,300 Overhead is applied on the basis of standard machine hours. 3.20 hours of machine time are required for each direct labor hour. The jobs were sold for $475,000. Selling and administrative expenses were $40,100. Assume that the amount of raw materials purchased equaled the amount used. Compute the overhead controllable variance and the overhead volume variance. $244,800 49,960 $89,928 $3.20 $1.80…
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Budget Performance Report Salisbury Bottle Company manufactures plastic two-liter bottles for the beverage industry. The cost standards per 100 two-liter bottles are as follows: Standard Cost per 100 Two-Liter Cost Category Direct labor Direct materials Factory overhead Total At the beginning of March, Salisbury's 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: Actual Cost for the Month Ended March 31 Cost Category Direct labor Direct materials Factory overhead Total Bottles $1.20 6.50 1.80 $9.50 Manufacturing costs: Direct labor Direct materials Factory overhead Total a. Prepare the March manufacturing standard cost budget (direct labor, direct materials, and factory overhead) for Salisbury, assuming planned production. Salisbury Bottle Company Manufacturing Cost Budget For the Month Ended March 31 $6,550 33,800 9,100 $49,450 $ Standard Cost at Planned…
In October, Pine Company reports 19,400 actual direct labor hours, and it incurs $122,380 of manufacturing overhead costs Standard hours allowed for the work done is 21,100 hours. The predetermined overhead rate is $5.75 per direct labor hour. Compute the total overhead variance Total Overhead Variance
Jake's Roof Repair has provided the following data concerning its costs Cost per Repair Hour $15.00 $ 7.70 $0.50 $ 3.50 $ 0.60 Wages and salaries Parts and supplies Equipeent depreciation Truck operating expenses Rent Administrative expenses Fixed Cost per Month $ 21,000 $2,730 $ 5,709 $ 4,020 $3,050 For example, wages and salaries should be $21,000 plus $15.00 per repair-hour. The company expected to work 2.900 repair-hours in May, but actually worked 2.800 repair-hours. The company expects its sales to be $52.00 per repair-hour Required: Compute the company's activity variances for May (Indicate the effect of each variance by selecting "F" for favorable. "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)
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