Question 2The Teala Company uses standard costing in its manufacturing plant for auto parts. Standardmachine time is 6.5 machine hours per unit. The standard cost of a particular auto part, based ona denominator level of 4,500 output units per year, included variable manufacturing overhead at$8 per hour. Budgeted fixed overhead was $351,000. Actual output produced was 4,400 units.Variable manufacturing overhead incurred was $217,000. Fixed manufacturing overheadincurred was $373,000. Actual machine-hours were 28,400.Required:1.Calculate the following variances in the table. Detailed computations are required.Production-Volume4-VarianceAnalysisVariableOverheadFixedOverheadSpendingVarianceEfficiencyVarianceVarianceFFNever a varianceVNever a variance2.Prepare journal entries for variable and fixed manufacturing overhead costs and variances;write off these variances to cost of goods sold.

The objective of the question is to calculate the production volume variance, variable overhead…

Answered: Question 2 The Teala Company uses…

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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Please only answer the total amount of fixed manufacturing overhead.
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Required information [The following information applies to the questions displayed below.] Performance Products Corporation makes two products, titanium Rims and Posts. Data regarding the two products follow: Rims Posts Direct Labor- Hours per unit 0.70 0.60 Annual Production 20,000 units 84,000 units Additional information about the company follows: a. Rims require $16 in direct materials per unit, and Posts require $12. b. The direct labor wage rate is $15 per hour. c. Rims are more complex to manufacture than Posts and they require special equipment. d. The ABC system has the following activity cost pools: Estimated Activity Activity Cost Pool Machine setups Special processing General factory Activity Measure Number of setups Machine-hours Estimated Overhead Cost Rims $ 28,560 80 $ 159,600 6,000 Posts 130 0 Total 210 6,000 Direct labor-hours $ 680,000 14,000 50,400 64,400 2. Determine the unit product cost of each product according to the ABC system. (Do not round intermediate…
Make-or-Buy, Traditional Analysis Wehner Company is currently manufacturing Part ABS-43, producing 59,300 units annually. The part is used in the production of several products made by Wehner. The cost per unit for ABS-43 is as follows: Direct materials $47.15 Direct labor 9.65 Variable overhead 2.30 Fixed overhead 4.65 Total $63.75 Of the total fixed overhead assigned to ABS-43, $14,766 is direct fixed overhead (the annual lease cost of machinery used to manufacture Part ABS-43), and the remainder is common fixed overhead. An outside supplier has offered to sell the part to Wehner for $58.92. There is no alternative use for the facilities currently used to produce the part. No significant non-unit-based overhead costs are incurred. Required: 1. Should Wehner Company make or buy Part ABS-43?Wehner should buy the part. This will produce total cost savings of $fill in the blank 2. 2. What is the maximum amount per unit that Wehner would be willing to pay to an outside…
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Question 2 The Teala Company uses standard costing in its manufacturing plant for auto parts. Standard machine time is 6.5 machine hours per unit. The standard cost of a particular auto part, based on a denominator level of 4,500 output units per year, included variable manufacturing overhead at $8 per hour. Budgeted fixed overhead was $351,000. Actual output produced was 4,400 units. Variable manufacturing overhead incurred was $217,000. Fixed manufacturing overhead incurred was $373,000. Actual machine-hours were 28,400. Required: 1.Calculate the following variances in the table. Detailed computations are required. Production- Volume 4-Variance Analysis Variable Overhead Fixed Overhead Spending Variance Efficiency Variance Variance F F Never a variance ل し Never a variance 2.Prepare journal entries for variable and fixed manufacturing overhead costs and variances; write off these variances to cost of goods sold.
TB MC Qu. 13-54 (Static) Sardi Incorporated is considering whether to continue... Sardi Incorporated is considering whether to continue to make a component or to buy it from an outside supplier. The company uses 17,000 of the components each year. The unit product cost of the component according to the company's cost accounting system is given as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Unit product cost Assume that direct labor is a variable cost. Of the fixed manufacturing overhead, 70% is avoidable if the component were bought from the outside supplier. In addition, making the component uses 2 minutes on the machine that is the company's current constraint. If the component were bought, time would be freed up for use on another product that requires 4 minutes on this machine and that has a contribution margin of $7.00 per unit. When deciding whether to make or buy the component, what cost of making the component should be…
Required information [The following information applies to the questions displayed below] Sedona Company set the following standard costs for one unit of its product for this year. Direct material (20 pounds @ $3.30 per pound) Direct labor (15 hours @ $6.00 per DLH) Variable overhead (15 hours @ $2.80 per DLH) Fixed overhead (15 hours @ $1.20 per DLH) Standard cost per unit The $4.00 ($2.80+ $1.20) total overhead rate per direct labor hour (DLH) is based on a predicted activity level of 43,500 units, which is 75% of the factory's capacity of 58,000 units per month. The following monthly flexible budget information is available. Flexible Budget Budgeted production (units) Budgeted direct labor (standard hours) Budgeted overhead. Variable overhead Fixed overhead Total overhead Actual variable overhead: Actual fixed overhead Actual total overhead $ 66.00 90.00 42.00 18.00 $ 216.00 $1,624,000 866,000 $ 2,490,000 Operating Levels (% of capacity) 75% 70% 40,600 609,000 $ 1,705, 200 783,000…
Sunland Irrigation, Inc. is known throughout the world for its H2O-X high-capacity water pump, used in irrigation systems. The pump’s standard cost is as follows. The company’s predetermined fixed overhead rate is based on an expected capacity of 100,000 direct labor hours per month. StandardPrice StandardQuantity StandardCost Direct materials $7 per pound 14 pounds $98 Direct labor $10 per DLH 4 DLH 40 Variable overhead $9 per DLH 4 DLH 36 Fixed overhead $4 per DLH 4 DLH 16 $190 During the month of September, the company produced 21,860 of the 25,000 pumps that had been scheduled for production in the budget. The company used 356,350 pounds of material during September. The direct labor payroll for the month was $773,200 for 92,900 direct labor hours. Variable overhead costs were $825,800; fixed overhead costs were $363,200. The company’s purchasing agent signed a new supply contract that resulted…

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