Scales and Weights Ltd manufactures three ranges of scales for use in weighing - Paper, Food and Parcels. Its accountant has prepared a draft budget for Year 8: Revenue Material Labour Variable overhead Fixed overhead Total costs Profit/(loss) Paper £000 46 13 20 16 7 56 (10) Food £000 52 13 7 7 8 35 17 Parcels £000 58 20 26 7 12 65 (7) Total £000 156 46 53 30 27 156 0 Fixed overheads are incurred for the company as a whole regardless of product line They are apportioned to each product line on the basis of direct labour hours. The directors are concerned because the company will make no profit overall. They are not able to increase the sales of any of the products because of high competitio They are considering various options. If the directors close down only the manufacture of Paper scales, what the effect on total profit? A) Total profit increases by 10,000 B) Total profit decreases by 10,000 C) Total profit decreases by 3,000 D) Total profit increases by 3,000

Scales and Weights Ltd manufactures three ranges of scales for use in weighing - Paper, Food and Parcels. Its accountant has prepared a draft budget for Year 8: Revenue Material Labour Variable overhead Fixed overhead Total costs Profit/(loss) Paper £000 46 13 20 16 7 56 (10) Food £000 52 13 7 7 8 35 17 Parcels £000 58 20 26 7 12 65 (7) Total £000 156 46 53 30 27 156 0 Fixed overheads are incurred for the company as a whole regardless of product line They are apportioned to each product line on the basis of direct labour hours. The directors are concerned because the company will make no profit overall. They are not able to increase the sales of any of the products because of high competitio They are considering various options. If the directors close down only the manufacture of Paper scales, what the effect on total profit? A) Total profit increases by 10,000 B) Total profit decreases by 10,000 C) Total profit decreases by 3,000 D) Total profit increases by 3,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Required information Use the following information for the Quick Studies below. (Algo) Rafner Manufacturing has the following budgeted data for its two production departments. Budgeted Data Overhead cost Direct labor hours Machine hours. Assembly 12,600 direct labor hours 5,400 machine hours Department Assembly Finishing Total $ 1,461,600 QS 17-8 (Algo) Allocating overhead with departmental rates LO P2 Allocate overhead to a job that uses 76 direct labor hours in the Assembly department and uses 62 machine hours in the Finishing department. Departmental Overhead Rate Hours Used $939,400 Finishing 19,400 direct labor hours 15,400 machine hours $ $ Overhead Allocated 0 0 0
#3 Required information [The following information applies to the questions displayed below.] A manufactured product has the following information for June. Direct materials Direct labor Overhead Units manufactured Standard Quantity and Cost 6 pounds @ $9 per pound 2 DLH @ $17 per DLH 2 DLH @ $12 per DLH Total budgeted (standard) cost Actual Results (1) Prepare the standard cost card showing standard cost per unit. (2) Compute total budgeted cost for June production. (3) Compute total actual cost for June production. (4) Compute total cost variance for June.
Zeke's Bikes uses a standard cost system and provides the following information: Standards: Static budget variable overhead $5,110.00. Static budget fixed overhead $20,400.00. Static budget direct labor hours 360 hours. Static budget number of units 25,100 units. Static budget direct labor hours 0.035 hours per unit. Actual: Number of units produced 23,000. Actual variable overhead $5,080.00 Actual fixed overhead $23,600.00. Actual direct labor hours 520. (Round your answers to two decimal places when needed and use rounded answers for all future calculations).
Crash Bang, Co. uses a standard cost system and provides the following information: Standards: Static budget variable overhead $5,590.00. Static budget fixed overhead $22,250.00. Static budget direct labor hours 566 hours. Static budget number of units 21,000 units. Static budget direct labor hours 0.023 hours per unit. Crash Bang, Co. allocates manufacturing overhead to production based on standard direct labor hours. Crash Bang, Co. reported the following actual results for 2020: Actual: Number of units produced 19,800. Actual variable overhead $5,230.00 Actual fixed overhead $24,570.00. Actual direct labor hours 485. (Round your answers to two decimal places when needed and use rounded answers for all future calculations).1. Compute the fixed overhead allocation rates.
Costing information for Emily Elephant Limited is as follows:Direct material cost per unitDirect labour cost per unitVariable manufacturing overhead cost per unitVariable selling and administrative overhead cost per unitFixed manufacturing overhead for the year£41 £43£6£4£44,000Budgeted production for the year was 4,000 units. What is the budgeted unit product cost according to an absorption costing system? a. £90 b. £101 c. £105d. £94
Perez Manufacturing Company established the following standard price and cost data. Sales price Variable manufacturing cost $ 8.98 per unit $ 3.40 per unit Fixed manufacturing cost Fixed selling and administrative cost $ 2,000 total $ 600 total Perez planned to produce and sell 2,300 units. Actual production and sales amounted to 2,600 units. Required a. Prepare the pro forma income statement in contribution format that would appear in a master budget. b. Prepare the proforma Income statement in contribution format that would appear in a flexible budget. Complete this question by entering your answers in the tabs below. Required A Required B Prepare the pro forma income statement in contribution format that would appear in a master budget. PEREZ MANUFACTURING COMPANY Pro Forma Income Statement Master Budget 2,300 Units
Q1. Prepare a Flexible budget for overheads on the basis of the following data. Ascertain the overhead rates at 70% and 80% capacity. Variable Overheads (60% capacity) Indirect Material = Rs. 6,000 Labour Rs. 18,000 Semi-variable overheads: Electricity (40% fixed) = Rs. 40,000 Repairs (80% fixed) = Rs. 2,400 Fixed Overheads: Depreciation Rs. 16,500 = Insurance = Rs. 4,500 Salaries= Rs. 20,000 Estimated Labour Hours 15,000 hrs = E
Question 2. A company manufactures two products, X and Y, for which the following information is available Particulars Budgeted production (units) Product X 4,000 Product Y 6,000 Labour hours per unit 5 8 Number of production runs required 4 6 Number of inspections during production 3 2 Production set-up costs OMR 350,000 Inspection costs OMR 150,000 Total overhead costs OMR 500,000 Using Activity Based Costing, calculate the budgeted overhead cost per unit for Product X and Product Y.