The Vizzini Shop (TVS) specializes in making fraternity and sorority tote bags for the college market. TVS produces bags in batch sizes of 94. For rush orders, TVS will produce smaller batches for an additional charge of $172 per setup. Budgeted and actual costs for the production process for 2020 are as follows: Requirements 1. What is the static budget number of setups for 2020? 2. What is the flexible-budget number of setups for 2020? 3. What is the actual number of setups in 2020? 4. Assuming fixed setup overhead costs are allocated using setup-hours, what is the predetermined fixed setup overhead allocation rate? 5. Does TVS's charge of $172 cover the budgeted variable overhead cost of an order? The budgeted total cost? 6. For direct variable setup costs, compute the price and efficiency variances. 7. For fixed setup overhead costs, compute the spending and the production-volume variances. 8. What qualitative factors should TVS consider before accepting or rejecting a special order? bt ups
The Vizzini Shop (TVS) specializes in making fraternity and sorority tote bags for the college market. TVS produces bags in batch sizes of 94. For rush orders, TVS will produce smaller batches for an additional charge of $172 per setup. Budgeted and actual costs for the production process for 2020 are as follows: Requirements 1. What is the static budget number of setups for 2020? 2. What is the flexible-budget number of setups for 2020? 3. What is the actual number of setups in 2020? 4. Assuming fixed setup overhead costs are allocated using setup-hours, what is the predetermined fixed setup overhead allocation rate? 5. Does TVS's charge of $172 cover the budgeted variable overhead cost of an order? The budgeted total cost? 6. For direct variable setup costs, compute the price and efficiency variances. 7. For fixed setup overhead costs, compute the spending and the production-volume variances. 8. What qualitative factors should TVS consider before accepting or rejecting a special order? bt ups
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
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Transcribed Image Text:The Vizzini Shop (TVS) specializes in making fraternity and sorority tote bags for the college market. TVS produces bags in batch sizes of 94. For rush orders, TVS will produce smaller batches
for an additional charge of $172 per setup. Budgeted and actual costs for the production process for 2020 are as follows:
X
Requirements
1. What is the static budget number of setups for 2020?
2. What is the flexible-budget number of setups for 2020?
3. What is the actual number of setups in 2020?
4. Assuming fixed setup overhead costs are allocated using setup-hours, what is the
predetermined fixed setup overhead allocation rate?
5.
Does TVS's charge of $172 cover the budgeted variable overhead cost of an order?
The budgeted total cost?
6.
For direct variable setup costs, compute the price and efficiency variances.
7. For fixed setup overhead costs, compute the spending and the production-volume
variances
8.
What qualitative factors should TVS consider before accepting or rejecting a
special order?
at
ups
Transcribed Image Text:Data table
Number of bags produced
Average number of bags per setup
Hours to set up machines
Direct variable cost per setup-hour
Total fixed setup overhead costs
en
S
Static-Budget
Amounts
Actual Results
103,400
116,560
94
6
27 $
40,920 $
94
7.5
30
43,520
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