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Swifty Corp. supplies its customers with high-quality canvas tents. These canvas tents sell for $170 each, with the following DM and DL usage and price expectations. Direct materials Direct labor Variable-MOH Fixed-MOH (a) 10 square yards per unit 1.1 DL hours per unit 1.1 DL hours per unit 1.1 DL hours per unit Throughout the year, Swifty used 3,780 DL hours in the process of making 3,500 tents. The company had originally planned to produce and sell 3,200 tents with budgeted fixed-MOH cost of $17,600. Its actual fixed-MOH costs amounted to $17,086 for the year. Your answer is correct. Determine Swifty's fixed-MOH price and volume variances. Also identify whether the company's fixed-MOH costs were under-or overapplied, and by how much. Fixed-MOH price variance (b) Fixed-MOH volume variance $ Fixed-MOH $6/square yard $16/DL hour $2.80/DL hour $5/DL hour No. Account Titles and Explanation (1) 514 1650 2164 Favorable Favorable Over-applied Record the journal entries to accompany the following transactions for variable-MOH: (1) actual variable-MOH cost incurred (consider that half was for utilities not yet paid, and half was for accrued indirect labor), (2) allocation of variable-MOH cost to production, and (3) recognition of specific variable-MOH variances (while closing out the Variable-MOH Control account). (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter O for the amounts. List all debit entries before credit entries.) Debit Credit

Swifty Corp. supplies its customers with high-quality canvas tents. These canvas tents sell for $170 each, with the following DM and DL usage and price expectations. Direct materials Direct labor Variable-MOH Fixed-MOH (a) 10 square yards per unit 1.1 DL hours per unit 1.1 DL hours per unit 1.1 DL hours per unit Throughout the year, Swifty used 3,780 DL hours in the process of making 3,500 tents. The company had originally planned to produce and sell 3,200 tents with budgeted fixed-MOH cost of $17,600. Its actual fixed-MOH costs amounted to $17,086 for the year. Your answer is correct. Determine Swifty's fixed-MOH price and volume variances. Also identify whether the company's fixed-MOH costs were under-or overapplied, and by how much. Fixed-MOH price variance (b) Fixed-MOH volume variance $ Fixed-MOH $6/square yard $16/DL hour $2.80/DL hour $5/DL hour No. Account Titles and Explanation (1) 514 1650 2164 Favorable Favorable Over-applied Record the journal entries to accompany the following transactions for variable-MOH: (1) actual variable-MOH cost incurred (consider that half was for utilities not yet paid, and half was for accrued indirect labor), (2) allocation of variable-MOH cost to production, and (3) recognition of specific variable-MOH variances (while closing out the Variable-MOH Control account). (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter O for the amounts. List all debit entries before credit entries.) Debit Credit

FINANCIAL ACCOUNTING
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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**Swifty Corp. Canvas Tent Costing Details** Swifty Corp. provides high-quality canvas tents priced at $170 each. The cost breakdown for each tent includes: - **Direct Materials**: 10 square yards per unit @ $6/square yard - **Direct Labor**: 1.1 DL hours per unit @ $16/DL hour - **Variable-MOH (Manufacturing Overhead)**: 1.1 DL hours per unit @ $2.80/DL hour - **Fixed-MOH**: 1.1 DL hours per unit @ $5/DL hour **Annual Production Overview** Throughout the year, Swifty used 3,780 DL hours to produce 3,500 tents. The initial plan was to produce and sell 3,200 tents with a budgeted fixed-MOH cost of $17,600. However, the actual fixed-MOH costs amounted to $17,086 for the year. **Part (a): Fixed-MOH Variance Analysis** The analysis involves determining Swifty's fixed-MOH price and volume variances: - **Fixed-MOH Price Variance**: $514, classified as Favorable - **Fixed-MOH Volume Variance**: $1650, classified as Favorable - **Total Fixed-MOH**: $2164, classified as Over-applied **Part (b): Journal Entries for Variable-MOH Transactions** To account for variable-MOH, the following entries need recording: 1. **Actual Variable-MOH Costs Incurred**: - Note: Half for utilities not paid and half for accrued indirect labor. 2. **Allocation of Variable-MOH to Production**. 3. **Recognition of Specific Variable-MOH Variances**: - Close out the Variable-MOH Control account. Each entry requires inputs specifying account titles, debits, and credits. If no entry is needed, "No Entry" is selected, and zero is entered for amounts. All debit entries must precede credit entries. **Journal Entry Table Layout** - **Columns**: - No. - Account Titles and Explanation - Debit - Credit Entries will be automatically indented when a value is input. Non-required fields will show "No Entry." List debit entries before listing any credit entries.
Transcribed Image Text:**Swifty Corp. Canvas Tent Costing Details** Swifty Corp. provides high-quality canvas tents priced at $170 each. The cost breakdown for each tent includes: - **Direct Materials**: 10 square yards per unit @ $6/square yard - **Direct Labor**: 1.1 DL hours per unit @ $16/DL hour - **Variable-MOH (Manufacturing Overhead)**: 1.1 DL hours per unit @ $2.80/DL hour - **Fixed-MOH**: 1.1 DL hours per unit @ $5/DL hour **Annual Production Overview** Throughout the year, Swifty used 3,780 DL hours to produce 3,500 tents. The initial plan was to produce and sell 3,200 tents with a budgeted fixed-MOH cost of $17,600. However, the actual fixed-MOH costs amounted to $17,086 for the year. **Part (a): Fixed-MOH Variance Analysis** The analysis involves determining Swifty's fixed-MOH price and volume variances: - **Fixed-MOH Price Variance**: $514, classified as Favorable - **Fixed-MOH Volume Variance**: $1650, classified as Favorable - **Total Fixed-MOH**: $2164, classified as Over-applied **Part (b): Journal Entries for Variable-MOH Transactions** To account for variable-MOH, the following entries need recording: 1. **Actual Variable-MOH Costs Incurred**: - Note: Half for utilities not paid and half for accrued indirect labor. 2. **Allocation of Variable-MOH to Production**. 3. **Recognition of Specific Variable-MOH Variances**: - Close out the Variable-MOH Control account. Each entry requires inputs specifying account titles, debits, and credits. If no entry is needed, "No Entry" is selected, and zero is entered for amounts. All debit entries must precede credit entries. **Journal Entry Table Layout** - **Columns**: - No. - Account Titles and Explanation - Debit - Credit Entries will be automatically indented when a value is input. Non-required fields will show "No Entry." List debit entries before listing any credit entries.
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