you have just been hired by FAPPE Organization. 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: Cost Formula Actual Cost in March $16,600 + $0.14 per machine-hour $ 21,340 $38,900+ $1.20 per machine-hour $ 57,900 $0.60 per machine-hour $ 12,400 Utilities Maintenance Supplies Indirect labor $94,800+ $1.60 per machine-hour Depreciation $67,900 $ 129,300 $ 69,600 During March, the company worked 19,000 machine-hours and produced 13,000 units. The company had originally planned to work 21,000 machine-hours during March. Required: 1. Calculate the activity variances for March. 2. Calculate the spending variances for March.

you have just been hired by FAPPE Organization. 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: Cost Formula Actual Cost in March $16,600 + $0.14 per machine-hour $ 21,340 $38,900+ $1.20 per machine-hour $ 57,900 $0.60 per machine-hour $ 12,400 Utilities Maintenance Supplies Indirect labor $94,800+ $1.60 per machine-hour Depreciation $67,900 $ 129,300 $ 69,600 During March, the company worked 19,000 machine-hours and produced 13,000 units. The company had originally planned to work 21,000 machine-hours during March. Required: 1. Calculate the activity variances for March. 2. Calculate the spending variances for March.

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Description: Please do not give solution in image format thanku you have just been hired by FAPPE Organization. The president has asked that you review the company's costing system and "do whatyou can to help us get better control of our manufacturing overhead co

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter5: Product And Service Costing: Job-order System

Section: Chapter Questions

Problem 27P: Firenza Company manufactures specialty tools to customer order. Budgeted overhead for the coming...

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Firenza Company manufactures specialty tools to customer order. Budgeted overhead for the coming year is: Previously, Sanjay Bhatt, Firenza Companys controller, had applied overhead on the basis of machine hours. Expected machine hours for the coming year are 50,000. Sanjay has been reading about activity-based costing, and he wonders whether or not it might offer some advantages to his company. He decided that appropriate drivers for overhead activities are purchase orders for purchasing, number of setups for setup cost, engineering hours for engineering cost, and machine hours for other. Budgeted amounts for these drivers are 5,000 purchase orders, 500 setups, and 2,500 engineering hours. Sanjay has been asked to prepare bids for two jobs with the following information: The typical bid price includes a 40 percent markup over full manufacturing cost. Required: 1. Calculate a plantwide rate for Firenza Company based on machine hours. What is the bid price of each job using this rate? 2. Calculate activity rates for the four overhead activities. What is the bid price of each job using these rates? 3. Which bids are more accurate? Why?
Big Mikes, a large hardware store, has gathered data on its overhead activities and associated costs for the past 10 months. Nizam Sanjay, a member of the controllers department, believes that overhead activities and costs should be classified into groups that have the same driver. He has decided that unloading incoming goods, counting goods, and inspecting goods can be grouped together as a more general receiving activity, since these three activities are all driven by the number of receiving orders. The 10 months of data shown below have been gathered for the receiving activity. Required: 1. Prepare a scattergraph, plotting the receiving costs against the number of purchase orders. Use the vertical axis for costs and the horizontal axis for orders. 2. Select two points that make the best fit, and compute a cost formula for receiving costs. 3. Using the high-low method, prepare a cost formula for the receiving activity. 4. Using the method of least squares, prepare a cost formula for the receiving activity. What is the coefficient of determination?
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: Actual Cost in March $ 20,900 $ 56,600 $ 9,400 $ 116,300 $ 69,400 Utilities Maintenance Supplies Indirect labor Depreciation Cost Formula $16,700+ $0.15 per machine-hour $38,800+ $1.50 per machine-hour $0.60 per machine-hour $94,600+ $1.30 per machine-hour $67,700 During March, the company worked 14,000 machine-hours and produced 8,000 units. The company originally planned to work 16,000 machine-hours during March.
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.…
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: Cost Formula Actual Cost in March Utilities $16,700 + $0.17 per machine-hour $ 21,900 Maintenance $38,400 + $1.70 per machine-hour $ 66,200 Supplies $0.50 per machine-hour $ 9,800 Indirect labor $94,400 + $1.80 per machine-hour $ 131,300 Depreciation $68,000 $ 69,700
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 $16,200 + $0.17 per machine-hour $38,700 +$1.50 per machine-hour $0.70 per machine-hour $94,300 +$1.10 per machine-hour $68,100 Actual Cost in March $ 21,570 $ 64,000 $ 14,500 $ 118,300 $ 69,800 During March, the company worked 19,000 machine-hours and produced 13,000 units. The company originally planned to work 21,000 machine-hours during March. Required: 1. Calculate…
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: Cost Formula Actual Cost in March Utilities $16,700 + $0.17 per machine-hour $ 21,900 Maintenance $38, 400 +$1.70 per machine-hour $ 66,200 Supplies $0.50 per machine-hour $ 9,800 Indirect labor $94,400 +$1.80 per machine-hour $131,300 Depreciation $68,000 $ 69, 700 During March, the company worked 18,000 machine-hours and produced 12,000 units. The company originally planned to work 20,000 machine-hours during March. Required: Calculate…
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 $16,400 + $0.19 per machine-hour $38,100 +$1.60 per machine-hour $0.60 per machine-hour $94,400 +$1.60 per machine-hour $67,600 Actual Cost in March $ 21,810 $ 62,300 $ 11,200 $ 125,700 $ 69,300 During March, the company worked 17,000 machine-hours and produced 11,000 units. The company originally planned to work 19,000 machine-hours during March. Required: 1. Calculate…
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: Actual Cost in March. $ 21,020 $ 64,300 $ 4,900 Utilities Maintenance. Supplies Indirect labor Depreciation $16,500 $38,200 Cost Formula $0.16 per machine-hour $1.90 per machine-hour $0.30 per machine-hour $94,400 $1.90 per machine-hour $68,400 $ 127,600 $ 70,100 During March, the company worked 15,000 machine-hours and produced 9,000 units. The company originally planned to work 17,000 machine-hours during March. Required: 1. Calculate the…
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 $16,700+ $0.12 per machine-hour $38,800+ $1.20 per machine-hour $0.40 per machine-hour $94,300+ $1.20 per machine-hour $68,400 Required 1 During March, the company worked 20,000 machine-hours and produced 14,000 units. The company originally planned to work 22,000 machine-hours during March. Required: 1. Calculate the activity variances for March. 2. Calculate the…
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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: Cost Formula Actual Cost in March Utilities $16,900 + $0.18 per machine-hour $ 22,300 Maintenance $38,400 + $1.30 per machine-hour $ 58,200 Supplies $0.60 per machine-hour $ 11,800 Indirect labor $94,300 + $1.30 per machine-hour $ 121,200 Depreciation $68,000 $ 69,700 During March, the company worked 18,000 machine-hours and produced 12,000 units. The company had originally planned to work 20,000…