Variable manufacturing overhead variance analysis. The Sourdough Bread Company bakes ba- guettes for distribution to upscale grocery stores. The company has two direct-cost categories: direct materials and direct manufacturing labor. Variable manufacturing overhead is allocated to products on the basis of standard direct manufacturing labor-hours. Following is some budget data for the Sourdough Bread Company: Direct manufacturing labor use Variable manufacturing overhead 0.02 hours per baguette S10.00 per direct manufacturing labor-hour The Sourdough Bread Company provides the following additional data for the year ended December 31, 2017: Planned (budgeted) output Actual production Direct manufacturing labor Actual variable manufacturing overhead 3,100,000 baguettes 2,600,000 baguettes 46,800 hours $617,760

Variable manufacturing overhead variance analysis. The Sourdough Bread Company bakes ba- guettes for distribution to upscale grocery stores. The company has two direct-cost categories: direct materials and direct manufacturing labor. Variable manufacturing overhead is allocated to products on the basis of standard direct manufacturing labor-hours. Following is some budget data for the Sourdough Bread Company: Direct manufacturing labor use Variable manufacturing overhead 0.02 hours per baguette S10.00 per direct manufacturing labor-hour The Sourdough Bread Company provides the following additional data for the year ended December 31, 2017: Planned (budgeted) output Actual production Direct manufacturing labor Actual variable manufacturing overhead 3,100,000 baguettes 2,600,000 baguettes 46,800 hours $617,760

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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What does a manufacturing overhead budget tell us?
When factory overheads are added to prime cost then the result will be. a. Cost of material consumed b. Cost of sales c. Works cost d. Cost of production
Under variable costing, all fixed manufacturing costs are treated as a a. product cost included in the cost of goods manufactured. b. product cost included in the cost of ending inventory. c. period expense deducted from manufacturing margin. d. period expense deducted from contribution margin.
Kindly answer all questions: 1.) Cost behavior is considered linear whenever a straight line is a reasonable approximation for the relation between cost and activity. A. True B. False 2.) Which of the following is an example of a cost that is variable with respect to the number of units produced? A. rent on administrative office building B. rent on factory building C. Salaries of top marketing executives D. direct labor cost, where the direct labor force is adjusted to actual production of the period 3.) Fixed costs are constant in total amount over the relevant range of operations. A. True B. False 4.) The cost function derived by the simple least squares method: A. must be tested for minimum and maximum points. B. is parabolic. C. is linear. D. is curvilinear.
In Traditional product costing systems, the measure of product activity is usually some volume based cost driver, like direct labor hours. True or False?
Which of the following is a correct equation to calculate the fixed overhead production-volume variance? a. budgeted fixed overhead costs − fixed overhead costs allocated for actual output b. static budget amount − flexible budget amount c. actual costs incurred − fixed overhead costs allocated for actual output d. flexible budget amount − actual costs incurred
Which of the following is a resource constraint? 1. machine hours available 2. sales commissions 3. cost per unit 4. budgeted overhead
What is the key difference between Absorption and Variable Costing? A Full Costing treats Manufacturing Overhead as a period cost B Variable Costing treats Fixed Manufacturing Overhead as a period cost C Absorption Costing only considers variable costs to calculate net income D Variable Costing only considers variable costs to calculate net income
Which of the following is not a method of cost absorption? (a) Percentage of direct material cost (b) Machine hour rate (c) Labour hour rate (d) Repeated distribution method
Question: In cost accounting, what is the primary purpose of calculating the predetermined overhead rate? A) To allocate indirect costs to products based on a predetermined formula.B) To determine the actual overhead costs incurred during a specific production period.C) To calculate variable costs associated with each unit of production.D) To assess fixed costs that remain constant regardless of production levels.
The direct costs of materials that change with the number of units produced is an example of a fixed production cost. True or false
Answer only d, e, and f