### Cost Analysis and Budgeting for March#### Variable Costs per Unit- **Direct Material:** 4 pounds at $10.00 per pound = $40.00- **Direct Labor:** 2 hours at $16 per hour = $32.00- **Variable Overhead:** 2 hours at $6 per hour = $12.00**Total Standard Variable Cost per Unit:** $84.00---#### Selling Expenses Cost Formulas| Expense Type | Fixed Cost per Month | Variable Cost per Unit Sold ||-----------------------------|----------------------|-----------------------------|| Advertising | $270,000 | - || Sales Salaries and Commissions | $240,000 | $19.00 || Shipping Expenses | - | $10.00 |---### Production and Financial Overview for March- **Planned Production and Sales:** 30,000 units- **Actual Production and Sales:** 34,500 units#### Actual Costs Incurreda. **Raw Materials Purchased:** 150,000 pounds at $9.20 per pound (all used in production).b. **Direct Labor Costs:** 62,000 hours at a rate of $17.00 per hour.c. **Total Variable Manufacturing Overhead:** $390,600.d. **Total Advertising, Sales Salaries and Commissions, and Shipping Expenses:** - Advertising: $280,000 - Sales Salaries and Commissions: $490,000 - Shipping Expenses: $185,000#### Required Calculation**What raw materials cost would be included in the company's flexible budget for March?**---### Educational ApplicationThis exercise provides an opportunity to understand cost behavior in budgeting, particularly distinguishing between fixed and variable costs and their application in flexible budgets to adapt to actual production levels. Students will learn how to adjust financial plans to reflect operational realities effectively.

Raw Material Cost = Number of Units x Cost per Unit

Answered: The planning budget for March was based…

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

The total factory overhead for Big Light Company is budgeted for the year at $1,204,000. Big Light manufactures two different products: night lights and desk lamps. Night lights are budgeted for 11,800 units. Each night light requires 2 hours of direct labor. Desk lamps are budgeted for 12,200 units. Each desk lamp requires 3 hours of direct labor. a. Determine the total number of budgeted direct labor hours for the year. direct labor hours b. Determine the single plantwide factory overhead rate using direct labor hours as the allocation base. Round your answer to two decimal places. $ per direct labor hour c. Determine the factory overhead allocated per unit for each product using the single plantwide factory overhead rate determined in (b). Round your answers to two decimal places. Night lights $ Desk lamps $ per unit per unit
The November monthly factory overhead cost budget for Brass Ltd. at normal capacity of 10,000 units or 5,000 direct labor hours follows: Variable: Power $ 6,000 Supplies 12,000 Maintenance 15,000 Total variable factory overhead 33,000 Fixed: Supervisory salaries 24,000 Depreciation of buildings and equipment 8,000 Lights and heat 6,000 Property tax and insurance 22,000 Total fixed factory overhead 60,000 Total factory overhead $93,000 (1) Prepare a flexible budget for 80%, 100% and 120% of normal capacity.(2) Determine the rate for application of factory overhead to work in process at each level of volume in relation to both units and direct labor hours.
Lemon Company manufactures a single product. The company manufactured 5,000 units in March, using 6,150 pounds of material and 2,420 labor hours. During the same month, they purchased 6,200 pounds of material for $151,590. The actual labor cost for March was $39,930. There were no beginning or ending work-in-process inventories. The company has the following unit standard costs for direct materials and labor. Budgeted quantity Per unit Direct materials 1.20 pounds Budgeted price $25 per pound $15 per hour Direct labor 0.50 hours
The total factory overhead for Big Light Company is budgeted for the year at $1,703,240. Big Light manufactures two different products: night lights and desk lamps. Night lights are budgeted for 17,300 units. Each night light requires 3 hours of direct labor. Desk lamps are budgeted for 17,500 units. Each desk lamp requires 2 hours of direct labor. a Determine the total number of budgeted direct labor hours for the year. direct labor hours b Determine the single plantwide factory overhead rate using direct labor hours as the allocation base. Round your answer to two decimal places. per direct labor hour c Determine the factory overhead allocated per unit for each product using the single plantwide factory overhead rate determined in (b). Round your answers to two decimal places. per unit per unit Night Lights Desk Lamps
The following data pertains to the month of October for Elm. Co. when production was budgeted to be 5,000 units of P90. P90 has standard costs per unit of: 3 lbs of Direct Materials at a cost of $7.00 per lb; .20 hours of Direct Labor at $18.00 per hour, and variable overhead assigned on the basis of 0.05 machine hours at a rate of $50 per machine hour. Actual production of P90 for October was 4,600 units, using 15,100 lbs of material costing a total of $107,778. A. Determine the direct materials quantity variance. (negative numbers indicate a favorable variance)
Picozzi Snow Removal's cost formula for its vehicle operating cost is $2,060 per month plus $306 per snow-day. For the month of January, the company planned for activity of 16 snow-days, but the actual level of activity was 18 snow-days. The actual vehicle operating cost for the month was $7,720. The vehicle operating cost in the planning budget for January would be closest to:
Pinnacle Corp. budgeted $260,140 of overhead cost for the current year. Actual overhead costs for the year were $217,980. Pinnacle's plantwide allocation base, machine hours, was budgeted at 51,430 hours. Actual machine hours were 47,690. A total of 99,320 units was budgeted to be produced and 98,000 units were actually produced. Pinnacle's plantwide factory overhead rate for the current year is:
Rasmussen Corporation expects to incur indirect overhead costs of $80,000 per month and direct manufacturing costs of $12 per unit. The expected production activity for the first four months of the year are as follows. January February March April Estimated production in units 6,000 7,000 3,000 4,000 Required Calculate a predetermined overhead rate based on the number of units of product expected to be made during the first four months of the year. Allocate overhead costs to each month using the overhead rate computed in Requirement a. Calculate the total cost per unit for each month using the overhead allocated in Requirement b.
Miguez Corporation makes a product with the following standard costs: Standard Quantity or Hours Standard Price or Rate Standard Cost Per Unit Direct materials 2.3 liters $ 7.00 per liter $ 16.10 Direct labor 0.7 hours $ 22.00 per hour $ 15.40 Variable overhead 0.7 hours $ 2.00 per hour $ 1.40 The company budgeted for production of 2,600 units in September, but actual production was 2,500 units. The company used 5,440 liters of direct material and 1,680 direct labor-hours to produce this output. The company purchased 5,800 liters of the direct material at $7.20 per liter. The actual direct labor rate was $24.10 per hour and the actual variable overhead rate was $1.90 per hour. The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased. The labor rate variance for September is: Multiple Choice $3,675 F $3,528 U $3,528 F $3,675 U
Pinnacle Corp. budgeted $245,500 of overhead cost for the current year. Actual overhead costs for the year were $240,720. Pinnacle's plantwide allocation base, machine hours, was budgeted at 48,450 hours. Actual machine hours were 55,160. A total of 101,090 units was budgeted to be produced and 98,000 units were actually produced. Pinnacle's plantwide factory overhead rate for the current year is: a. $5.07 per machine hour b. $4.97 per machine hour c. $2.43 per machine hour d. $2.38 per machine hour
Blumen Textiles Corporation began April with a budget for 90,000 hours of production in the Weaving Department. The department has a full capacity of 100,000 hours under normal business conditions. The budgeted overhead at the planned volumes at the beginning of April was as follows: Variable overhead $540,000 Fixed overhead 240,000 Total $780,000 The actual factory overhead was $782,000 for April. The actual fixed factory overhead was as budgeted. During April, the Weaving Department had standard hours at actual production volume of 92,500 hours. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Round your interim computations to the nearest cent, if required. a. Determine the variable factory overhead controllable variance.$fill in the blank 1 FavorableUnfavorable b. Determine the fixed factory overhead volume variance.$fill in the blank 3 FavorableUnfavorable
Pinnacle Corp. budgeted $218,050 of overhead cost for the current year. Actual overhead costs for the year were $207,500. Pinnacle's plantwide allocation base, machine hours, was budgeted at 53,300 hours. Actual machine hours were 46,460. A total of 91,830 units was budgeted to be produced and 98,000 units were actually produced. Pinnacle's plantwide factory overhead rate for the current year is: a.$2.26 per machine hour b.$4.09 per machine hour c.$3.89 per machine hour d.$2.37 per machine hour

SEE MORE QUESTIONS

Recommended textbooks for you

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

Horngren's Cost Accounting: A Managerial Emphasis…

Accounting

ISBN:

9780134475585

Author:

Srikant M. Datar, Madhav V. Rajan

Publisher:

PEARSON

Intermediate Accounting

Accounting

ISBN:

9781259722660

Author:

J. David Spiceland, Mark W. Nelson, Wayne M Thomas

Publisher:

McGraw-Hill Education

Financial and Managerial Accounting

Accounting

ISBN:

9781259726705

Author:

John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS