The following information is used for the question below.HakardPewlitt is producing a new model of laser printer, the Id10t. A year after theId10t had been released, you have been given data on how well your workforce isproducing. After looking at the numbers, you decide that you should figure out thevariances in relation to your production team. The standard labour cost is $13.75after pay, taxes, and benefits. You were surprised to see that the actual rate turnedout to be $14.50. The actual number of hours your employees worked was 7800, butyou know that the standard for the level of production (650 casings) is 7500 hours.Labour Efficiency Variance is:$4 125 Unfavourable$4 125 Favourable$4 125$4 125

To calculate the Labour Efficiency Variance (LEV), you can use the following formula:Labour…

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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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You have just been hired by FAB Corporation, the manufacturer of a revolutionary new garage door opening device. The president has asked that you review the company's costing system and "do what you can to help us get better control of our manufacturing overhead costs." You find that the company has never used a flexible budget, and you suggest that preparing such a budget would be an excellent first step in overhead planning and control. After much effort and analysis, you determined the following cost formulas and gathered the following actual cost data for March: Actual Cost in March $ 22,180 $ 75,300 $ 16,600 $ 131,000 $ 69,200 Utilities Maintenance Supplies Indirect labor Depreciation During March, the company worked 22,000 machine-hours and produced 16,000 units. The company had originally planned to work 24,000 machine-hours during March. Cost Formula $16,300 + $0.17 per machine-hour $38,300+ $1.80 per machine-hour $0.70 per machine-hour Required: 1. Prepare a flexible budget…
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After reviewing the new activity-based costing system that Nancy Chen has implemented at IVC's CenterPoint manufacturing facility, Tom Spencer, the production supervisor, believes that he can reduce production costs by reducing the time spent on machine setups. He has spent the last month working with employees in the plant to change over the machines more quickly with the same reliability. He plans to produce 119,000 units of the Sport model and 49,500 units of the Pro model in the first quarter. He believes that with his more efficient setup routine, he can reduce the number of setup hours for both the Sport and the Pro products by one-third. Cost Drivers and Cost Driver Volumes—CenterPoint Manufacturing Facility Activity Cost Driver Cost Driver Volume Sport Pro Total Assembly building Assembling Machine-hours 7,900 31,900 39,800 Setting up machines Setup hours 59 590 649 Handling material Production runs 27 59 86 Packaging building Inspecting and…
You have just been hired by FAB Corporation, the manufacturer of a revolutionary new garage door opening device. The president asked you to review the company's costing system and "do what you can to help us get better control of our manufacturing overhead costs." You find the company has never used a flexible budget, and you suggest preparing such a budget would be an excellent first step in overhead planning and control. After much effort and analysis, you estimated the following cost formulas and gathered the following actual cost data for March: Utilities Maintenance Supplies Indirect labor Depreciation Cost Formula $16,900 + $0.15 per machine-hour $38,600 + $1.80 per machine-hour $0.30 per machine-hour $94,300 + $1.30 per machine-hour $67,500 Actual Cost in March $ 21,400 $ 64,800 $ 5,200 $ 118,600 $ 69,200 During March, the company worked 16,000 machine-hours and produced 10,000 units. The company originally planned to work 18,000 machine-hours during March. Required: 1.…
Vaibhav
Vitamin-Sea is a company that specializes in making tents for beach tourism. Vitamin-Sea wants all of its customers to feel comfortable when traveling to the beach. The company aims to sell 3,000 units of tents at a selling price of $ 50 in July. They certainly have employees and also direct labor who help the production, with the formula for calculating salaries and wages is $ 2,000 for fixed costs and $ 20 for variable costs. For tent-making materials, parachutes are used for $ 3 and maintenance equipment is $ 5 per unit. In addition to Utilities for $ 1,500 for July, Factory and Office Rent for $ 10,000, Equipment Depreciation for $ 20,000 and insurance for $ 1,500. All variable cost are counted based on unit produce and sold. At the end of July, here are the actual results obtained by Vitamin-Sea: | Actual Result Quantity produced and sold 3,500 200,000 Revenue Expenses |Wages and Salaries Direct Material Equipment maintenance Utilities Factory and Office Rent Equipment…
a) Build a spreadsheet model that calculates profit or loss, using the principles of good spreadsheet design. If Harris makes 15,000 units, what is the resulting profit? b) Construct a one-way data table with production volume as the column input and profit as the output. Vary production volume from 0 to 100,000 in increments of 10,000. In which interval of production volume does breakeven occur? c) Construct a two-way data table with production volume as the column input and revenue per unit as the row input. Vary production volume from 0 to 100,000 in increments of 10,000. Input the revenue per units as $.75, $.85, $.95, $1.05. d) Use Goal Seek to find the exact breakeven point. Hint: To value: = 0.
Perfect Pet Collar Company makes custom leather pet collars. The company expects each collar to require 2.50 feet of leather and predicts leather will cost $4.50 per foot. Suppose Perfect Pet made 100 collars during February. For these 100 collars, the company actually averaged 2.65 feet of leather per collar and paid $4.10 per foot. Required: 1. Calculate the standard direct materials cost per unit. 2. Without performing any calculations, determine whether the direct materials price variance will be favorable or unfavorable. 3. Without performing any calculations, determine whether the direct materials quantity variance will be favorable or unfavorable. 6. Calculate the direct materials price and quantity variances. Complete this question by entering your answers in the tabs below. Req 1 Req 2 and 3 Req 6 2. Without performing any calculations, determine whether the direct materials price variance will be favorable or unfavorable. 3. Without performing any calculations, determine…
Danna Lumus, the marketing manager for a division that produces a variety of paper products, is considering the divisional manager’s request for a sales forecast for a new line of paper napkins. The divisional manager has been gathering data so that he can choose between two different production processes. The first process would have a variable cost of $10 per case produced and total fixed cost of $100,000. The second process would have a variable cost of $6 per case and total fixed cost of $200,000. The selling price would be $30 per case. Danna had just completed a marketing analysis that projects annual sales of 30,000 cases. Danna is reluctant to report the 30,000 forecast to the divisional manager. She knows that the first process would be labor intensive, whereas the second would be largely automated with little labor and no requirement for an additional production supervisor. If the first process is chosen, Jerry Johnson, a good friend, will be appointed as the line supervisor.…
Curry Rubber manufactures rubber bands for retail companies. The accounting manager has performed a regression analysis of past data. You notice that the formula has an R-squared of 0.68, a t-value of 2.2, and a standard error of the estimate of $218,200. The estimate for next quarter costs is $2,597,623. Calculate Standard Error as a % of predicted total cost which represents a measure of precision of his regression analysis? (Round your answer to one decimal place, i.e., 0.052 = 5.2%.)
Horton Manufacturing Incorporated produces blinds and other window treatments for residential homes and offices. The owner is concerned about the maintenance costs for the production machinery because maintenance costs for the previous fiscal year were higher than he expected. The owner has asked you to assist in estimating future maintenance costs to better predict the firm's profitability. Together, you have determined that the best cost driver for maintenance costs is machine hours. The data from the previous fiscal year for maintenance costs and machine hours follow: Month Maintenance Costs Machine Hours $ 2,695 2,740 2,790 2,890 2,925 3,025 2,935 1 2 3 4 56789012 10 11 2,975 2,850 2,640 2,660 2,960 Maintenance cost 1,620 1,730 1,745 1,795 1,790 1,890 1,810 1,845 1,835 1,480 1,690 1,495 Required: 1. Use the high-low method to estimate the fixed and variable portions for maintenance costs. (In your calculations, round "slope (uni variable cost)" to 4 decimal places. Enter the "slope…
A process control manager is considering two robots to improve materials-handling capacity in the production of rigid shaft couplings that make dissimilar drive components. Robot X has a first cost of $92,000, an annual M&O cost of $31,000, and $40,000 salvage value, and it will improve revenues by $96,000 per year. Robot Y has a first cost of $146,000, an annual M&O cost of $28,000, and $47,000 salvage value, and it will increase revenues by $124,000 per year. The company's MARR is 37% per year, and it uses a 3-year study period for economic evaluations. Calculate the incremental ROR, and identify the robot the manager should select. The incremental ROR is %. The manager should select robot: (Click to select) (Click to select) Y

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