Weinsterin Inc. produces chemicals for large biotech companies. It has the following data for manufacturing overhead costs during August Variable Fixed Actual costs incurred $33,000 S17,500 Costs allocated to products $32,000 $13,800 Flexible budget: Budgeted input allowed for actual output produced x budgeted rate $32,000 $15,000 Actual input x budgeted rate $32,200 $15,000 Required Complete the table below. Variable Fixed 1. Rate variance 2 Efficiency variance 3. Production-volume variance 4. Flexible-budget variance 5. Underallocated (overallocated) manufacturing overhead

Weinsterin Inc. produces chemicals for large biotech companies. It has the following data for manufacturing overhead costs during August Variable Fixed Actual costs incurred $33,000 S17,500 Costs allocated to products $32,000 $13,800 Flexible budget: Budgeted input allowed for actual output produced x budgeted rate $32,000 $15,000 Actual input x budgeted rate $32,200 $15,000 Required Complete the table below. Variable Fixed 1. Rate variance 2 Efficiency variance 3. Production-volume variance 4. Flexible-budget variance 5. Underallocated (overallocated) manufacturing overhead

Name: Weinsterin Inc. produces chemicals for large biotech companies. It ha
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Description: Weinsterin Inc. produces chemicals for large biotech companies. It has the following data for manufacturing overhead costs during AugustFixedVariableActual costs incurred$33,000$17,500Costs allocated to products$32,000$13,800Flexible budget: Budgete

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter4: Activity-based Costing

Section: Chapter Questions

Problem 2E: Bach Instruments Inc. makes three musical instruments: flutes, clarinets, and oboes. The budgeted...

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Adam Corporation manufactures computer tables and has the following budgeted indirect manufacturing cost information for the next year: If Adam uses the step-down (sequential) method, beginning with the Maintenance Department, to allocate support department costs to production departments, the total overhead (rounded to the nearest dollar) for the Machining Department to allocate to its products would be: a. 407,500. b. 422,750. c. 442,053. d. 445,000.
Douglas Davis, controller for Marston, Inc., prepared the following budget for manufacturing costs at two different levels of activity for 20X1: During 20X1, Marston worked a total of 80,000 direct labor hours, used 250,000 machine hours, made 32,000 moves, and performed 120 batch inspections. The following actual costs were incurred: Marston applies overhead using rates based on direct labor hours, machine hours, number of moves, and number of batches. The second level of activity (the right column in the preceding table) is the practical level of activity (the available activity for resources acquired in advance of usage) and is used to compute predetermined overhead pool rates. Required: 1. Prepare a performance report for Marstons manufacturing costs in the current year. 2. Assume that one of the products produced by Marston is budgeted to use 10,000 direct labor hours, 15,000 machine hours, and 500 moves and will be produced in five batches. A total of 10,000 units will be produced during the year. Calculate the budgeted unit manufacturing cost. 3. One of Marstons managers said the following: Budgeting at the activity level makes a lot of sense. It really helps us manage costs better. But the previous budget really needs to provide more detailed information. For example, I know that the moving materials activity involves the use of forklifts and operators, and this information is lost when only the total cost of the activity for various levels of output is reported. We have four forklifts, each capable of providing 10,000 moves per year. We lease these forklifts for five years, at 10,000 per year. Furthermore, for our two shifts, we need up to eight operators if we run all four forklifts. Each operator is paid a salary of 30,000 per year. Also, I know that fuel costs about 0.25 per move. Assuming that these are the only three items, expand the detail of the flexible budget for moving materials to reveal the cost of these three resource items for 20,000 moves and 40,000 moves, respectively. Based on these comments, explain how this additional information can help Marston better manage its costs. (Especially consider how activity-based budgeting may provide useful information for non-value-added activities.)
Salisbury Bottle Company manufactures plastic two-liter bottles for the beverage industry. The cost standards per 100 two-liter bottles are as follows: At the beginning of March, Salisburys management planned to produce 500,000 bottles. The actual number of bottles produced for March was 525,000 bottles. The actual costs for March of the current year were as follows: a. Prepare the March manufacturing standard cost budget (direct labor, direct materials, and factory overhead) for Salisbury, assuming planned production. b. Prepare a budget performance report for manufacturing costs, showing the total cost variances for direct materials, direct labor, and factory overhead for March. c. Interpret the budget performance report.
A company estimates its manufacturing overhead will be $840,000 for the next year. What is the predetermined overhead rate given each of the following Independent allocation bases? Budgeted direct labor hours: 90,615 Budgeted direct labor expense: $750000 Estimated machine hours: 150,000
Multiple production department factory overhead rates The total factory overhead for Bardot Marine Company is budgeted for the year at 600,000 divided into two departments: Fabrication, 420,000, and Assembly, 180,000. Bardot Marine manufactures two types of boats: speedboats and bass boats. The speedboats require 8 direct labor hours in Fabrication and 4 direct labor hours in Assembly. The bass boats require 4 direct labor hours in Fabrication and 8 direct labor hours in Assembly. Each product is budgeted for 250 units of production for the year. Determine (A) the total number of budgeted direct labor hours for the year in each department, (B) the departmental factory overhead rates for both departments, and (C) the factory overhead allocated per unit for each product using the department factory overhead allocation rates.
Bach Instruments Inc. makes three musical instruments: flutes, clarinets, and oboes. The budgeted factory overhead cost is 2,948,125. Overhead is allocated to the three products on the basis of direct labor hours. The products have the following budgeted production volume and direct labor hours per unit: a. Determine the single plant wide overhead rate. b. Use the overhead rate in (a) to determine the amount of total and per-unit overhead allocated to each of the three products, rounded to the nearest dollar.
Nashler Company has the following budgeted variable costs per unit produced: Budgeted fixed overhead costs per month include supervision of 98,000, depreciation of 76,000, and other overhead of 245,000. Required: 1. Prepare a flexible budget for all costs of production for the following levels of production: 160,000 units, 170,000 units, and 175,000 units. 2. What is the per-unit total product cost for each of the production levels from Requirement 1? (Round each unit cost to the nearest cent.) 3. What if Nashler Companys cost of maintenance rose to 0.22 per unit? How would that affect the unit product costs calculated in Requirement 2?
At the beginning of the period, the Fabricating Department budgeted direct labor of 72,000 and equipment depreciation of 18,500 for 2,400 hours of production. The department actually completed 2,350 hours of production. Determine the budget for the department, assuming that it uses flexible budgeting.
Craftmore Machining reports the following budgeted overhead cost and related data for this year. Budgeted Cost Activity Cost Driver Activity Assembly Product design $ 390,000 Direct labor hours (DLH) Engineering hours (EH) Machine hours (MH) 60,000 20,000 Budgeted Activity Usage 13,000 1,000 10,000 400 Electricity 50,000 Setups $ 520,000 Setup Total Required: 1. Compute a single plantwide overhead rate assuming the company allocates overhead cost based on 13,000 direct labor hours. 2. Job 31 used 200 direct labor hours and Job 42 used 480 direct labor hours. Allocate overhead cost to each job using the single plantwide overhead rate from part 1. 3. Compute an activity rate for each activity using activity-based costing. 4. Allocate overhead costs to Job 31 and Job 42 using activity-based costing. Activity Cost Driver Direct labor hours (DLH) Engineering hours (EH) Machine hours (MH) Setups Required 1 Required 2 Activity Usage Job 31 200 26 50 4 Numerator Denominator Job 42 Complete…
Required information [The following information applies to the questions displayed below.] Cooper Corporation produces decorator wall coverings. Budgeted production is 240,000 square feet per month, and the standard direct labor requirement to make this amount is 6,000 hours. All overhead is allocated based on direct labor hours. The following information is available: Actual Budgeted Amounts Results Production in units. Total labor hours 260,000 320,000 8,000 6,500 Total variable overhead Total fixed overhead $ 9,750 $ 12,000 $6,500 $ 6,800 $ 16,250 $ 18,800 Total overhead The overhead spending variance for the month in question was:
Craftmore Machining reports the following budgeted overhead cost and related data for this year. Activity Budgeted Cost Activity Cost Driver Budgeted Activity Usage Assembly $ 399,750 Direct labor hours (DLH) 13,000 Product design 61,500 Engineering hours (EH) 1,230 Electricity 20,500 Machine hours (MH) 10,000 Setup 51,250 Setups 410 Total $ 533,000 Required:1. Compute a single plantwide overhead rate assuming the company allocates overhead cost based on 13,000 direct labor hours.2. Job 31 used 240 direct labor hours and Job 42 used 520 direct labor hours. Allocate overhead cost to each job using the single plantwide overhead rate from part 1.3. Compute an activity rate for each activity using activity-based costing.4. Allocate overhead costs to Job 31 and Job 42 using activity-based costing. Activity Cost Driver Activity Usage Job 31 Job 42 Direct labor hours (DLH) 240 520 Engineering hours (EH) 27 33 Machine hours (MH) 60 60 Setups 5 7
Craftmore Machining reports the following budgeted overhead cost and related data for this year. Activity Assembly Product design Budgeted Activity Usage 13,000 Activity Cost Driver Direct labor hours (DLH) Engineering hours (EH) Machine hours (MH) Electricity 1,000 10,500 420 Setups Setup Total Budgeted Cost $ 409,500 63,000 21,000 52,500 $ 546,000 Required: 1. Compute a single plantwide overhead rate assuming the company allocates overhead cost based on 13,000 direct labor hours. 2. Job 31 used 220 direct labor hours and Job 42 used 500 direct labor hours. Allocate overhead cost to each job using the single plantwide overhead rate from part 1. 3. Compute an activity rate for each activity using activity-based costing. 4. Allocate overhead costs to Job 31 and Job 42 using activity-based costing. Activity Cost Driver Direct labor hours (DLH) Engineering hours (EH) Machine hours (MH) Setups Activity Usage Job 31 220 28 52 4 Job 42 500 34 62 6 Complete this question by entering your…