Samano Industries has adopted the following production budget for the four quarters of 2020: Quarter 1 Quarter 2 Quarter 3 Units 6,300 8,100 9,100 Quarter 4 10,100 Each unit requires 3 kg of raw materials costing $6 per kilogram. On December 31, 2019, the ending raw materials inventory was 1,900 kg. Management wants to have a raw materials inventory at the beginning of each quarter equal to 30% of the current quarter's production requirements. The production budget for the first quarter of 2021 will be 12,100 units.Prepare a direct materials purchases budget by quarters for 2020.2.Ayala Corporation accumulates the following data relative to jobs started and finished during the month of June 2017. Costs and Production Data Raw materials unit cost Raw materials units used Direct labor payroll Actual Standard $2.25 $2.10 10,600 10,000 $ 1,20,960 $ 1,20,000 Direct labor hours Manufacturing overhead 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 14,400 15,000 $ 1,89,500 $1,93,500 42,500 $ 55,250 $ 3.00 $ 1.30 Overhead is applied on the basis of standard machine hours.3.00 hours of machine time are required for each direct labor hour. The jobs were sold for $400,000. Selling and administrative expenses were $40,000. Assume that the amount of raw materials purchased equaled the amount used.Compute the overhead controllable variance and the overhead volume variance.
Samano Industries has adopted the following production budget for the four quarters of 2020: Quarter 1 Quarter 2 Quarter 3 Units 6,300 8,100 9,100 Quarter 4 10,100 Each unit requires 3 kg of raw materials costing $6 per kilogram. On December 31, 2019, the ending raw materials inventory was 1,900 kg. Management wants to have a raw materials inventory at the beginning of each quarter equal to 30% of the current quarter's production requirements. The production budget for the first quarter of 2021 will be 12,100 units.Prepare a direct materials purchases budget by quarters for 2020.2.Ayala Corporation accumulates the following data relative to jobs started and finished during the month of June 2017. Costs and Production Data Raw materials unit cost Raw materials units used Direct labor payroll Actual Standard $2.25 $2.10 10,600 10,000 $ 1,20,960 $ 1,20,000 Direct labor hours Manufacturing overhead 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 14,400 15,000 $ 1,89,500 $1,93,500 42,500 $ 55,250 $ 3.00 $ 1.30 Overhead is applied on the basis of standard machine hours.3.00 hours of machine time are required for each direct labor hour. The jobs were sold for $400,000. Selling and administrative expenses were $40,000. Assume that the amount of raw materials purchased equaled the amount used.Compute the overhead controllable variance and the overhead volume variance.
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter8: Budgeting For Planning And Control
Section: Chapter Questions
Problem 15E: Palmgren Company produces consumer products. The sales budget for four months of the year is...
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Transcribed Image Text:Samano Industries has adopted the following production budget for the
four quarters of 2020:
Quarter 1 Quarter 2 Quarter 3
Units
6,300
8,100
9,100
Quarter 4
10,100
Each unit requires 3 kg of raw materials costing $6 per kilogram. On
December 31, 2019, the ending raw materials inventory was 1,900 kg.
Management wants to have a raw materials inventory at the beginning
of each quarter equal to 30% of the current quarter's production
requirements. The production budget for the first quarter of 2021 will be
12,100 units.Prepare a direct materials purchases budget by quarters
for 2020.2.Ayala Corporation accumulates the following data relative to
jobs started and finished during the month of June 2017.
Costs and Production Data
Raw materials unit cost
Raw materials units used
Direct labor payroll
Actual
Standard
$2.25
$2.10
10,600
10,000
$ 1,20,960 $ 1,20,000
Direct labor hours
Manufacturing overhead
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
14,400
15,000
$ 1,89,500
$1,93,500
42,500
$ 55,250
$ 3.00
$ 1.30
Overhead is applied on the basis of standard machine hours.3.00 hours
of machine time are required for each direct labor hour. The jobs were
sold for $400,000. Selling and administrative expenses were $40,000.
Assume that the amount of raw materials purchased equaled the
amount used.Compute the overhead controllable variance and the
overhead volume variance.
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