Financial And Managerial Accounting
15th Edition
ISBN: 9781337902663
Author: WARREN, Carl S.
Publisher: Cengage Learning,
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Textbook Question
Chapter 22, Problem 4CMA
Krouse Company produces two products, forged putter heads and laminated putter heads, which are sold through specialty golf shops. The company is in the process of developing its operating budget for the coming year. Selected data regarding the company’s two products are as follows:
Manufacturing
- a. $42.
- b. $46.
- c. $52.
- d. $62.
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Blue Devil Inc. has a significant level of manufacturing overhead. After preparing their budget for the next year, management expects the following overhead costs (the cost driver for each overhead cost pool is also shown):
Activity
Total Cost
Cost Driver
Maintenance
$20,000
Machine hours
Materials receiving
80,000
Shipments received
Machine setups
50,000
Number of setups
Inspection
40,000
Number of inspections
The expected activity for the year for various cost drivers is:
Direct Labor Hours
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Machine Hours
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Shipments Received
4,000
Setups
200
Quality Inspections
8,000
The company is considering accepting a significant production contract. Estimates for the contract are as follows:
Direct materials
$100,000
Direct labor (7,500 hours)
$150,000
Number of material shipments received
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Number of inspections
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Number of setups
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Scotch Brand Products produces packaging tape and has determined the following to be its standard cost of producing one case of budget packaging tape:
Material (3.50 ounces at $1.30 per ounce) $4.55
Labor (0.30 hour at $12.00 per hour) 3.60
Overhead 2.70
Total $10.85
At the start of 2021, Scotch Brand planned to produce 20,000 cases of tape during the year. Overhead is allocated based on the number of cases of tape produced. Annual fixed overhead is budgeted at $18,000 and the variable overhead costs are budgeted at $1.80 per case. The following information summarizes the results for 2021:
Actual production, 21,000 cases
Purchased 275,000 ounces of material at a total cost of $343,750
Used 266,250 ounces of material in production
Employees worked 22,000 hours, total labor cost $275,000
Actual overhead incurred,…
Scotch Brand Products produces packaging tape and has determined the following to be its standard cost of producing one case of budget packaging tape:
Material (3.50 ounces at $1.30 per ounce) $4.55
Labor (0.30 hour at $12.00 per hour) 3.60
Overhead 2.40
Total $10.55
At the start of 2021, Scotch Brand planned to produce 80,000 cases of tape during the year. Overhead is allocated based on the number of cases of tape produced. Annual fixed overhead is budgeted at $64,000 and the variable overhead costs are budgeted at $1.60 per case. The following information summarizes the results for 2021:
Actual production, 81,000 cases
Purchased 275,000 ounces of material at a total cost of $343,750
Used 266,250 ounces of material in production
Employees worked 22,000 hours, total labor cost $275,000
Actual overhead incurred,…
Chapter 22 Solutions
Financial And Managerial Accounting
Ch. 22 - Prob. 1DQCh. 22 - Briefly describe the type of human behavior...Ch. 22 - What behavioral problems are associated with...Ch. 22 - What behavioral problems are associated with...Ch. 22 - Under what circumstances would a static budget be...Ch. 22 - Prob. 6DQCh. 22 - Why should the production requirements set forth...Ch. 22 - Why should the timing of direct materials...Ch. 22 - A. Discuss the purpose of the cash budget. B. If...Ch. 22 - Give an example of how the capital expenditures...
Ch. 22 - At the beginning of the period, the Fabricating...Ch. 22 - Pasadena Candle Inc. projected sales of 800,000...Ch. 22 - Pasadena Candle Inc. budgeted production of...Ch. 22 - Pasadena Candle Inc. budgeted production of...Ch. 22 - Prepare a cost of goods sold budget for Pasadena...Ch. 22 - Prob. 6BECh. 22 - At the beginning of the school year, Craig Kovar...Ch. 22 - Digital Solutions Inc. uses flexible budgets that...Ch. 22 - Static budget versus flexible budget The...Ch. 22 - Flexible budget for Assembly Department Steelcase...Ch. 22 - Production budget Healthy Measures Inc. produces a...Ch. 22 - Sales and production budgets Sonic Inc....Ch. 22 - Professional foes earned budget for a service...Ch. 22 - Professional labor cost budget for a service...Ch. 22 - Direct materials purchases budget Tobins Frozen...Ch. 22 - Direct materials purchases budget Coca-Cola...Ch. 22 - Direct materials purchases budget Anticipated...Ch. 22 - Direct labor cost budget Ace Racket Company...Ch. 22 - Production and direct labor cost budgets Levi...Ch. 22 - Factory overhead cost budget Sweet Tooth Candy...Ch. 22 - Cost of goods sold budget Delaware Chemical...Ch. 22 - Cost of goods sold budget The controller of...Ch. 22 - Schedule of cash collections of accounts...Ch. 22 - Schedule of cash collections of accounts...Ch. 22 - Schedule of cash payments for service company...Ch. 22 - Schedule of cash payments for a service company...Ch. 22 - Capital expenditures budget On January 1, 20Y6,...Ch. 22 - Forecast sales volume and sales budget For 20Y8,...Ch. 22 - Sales, production, direct materials purchases, and...Ch. 22 - Budgeted income statement and supporting budgets...Ch. 22 - Budgeted income statement and supporting budgets...Ch. 22 - Cash budget The controller of Bridgeport...Ch. 22 - Budgeted income statement and balance sheet As a...Ch. 22 - Forecast sales volume and sales budget Sentinel...Ch. 22 - Sales, production, direct materials purchases, and...Ch. 22 - Budgeted income statement and supporting budgets...Ch. 22 - Prob. 4PBCh. 22 - Cash budget The controller of Mercury Shoes Inc....Ch. 22 - Budgeted income statement and balance sheet As a...Ch. 22 - Analyze Johnson Stores staffing budget for...Ch. 22 - Nursing staff budget Mercy Hospital staffs its...Ch. 22 - Parking lot staff budget Adventure Park is a large...Ch. 22 - Housekeeping staff budget Ambassador Suites Inc....Ch. 22 - Ethics in Action The director of marketing for...Ch. 22 - Communication The city of Milton has an annual...Ch. 22 - Prob. 4TIFCh. 22 - Static budget for a service company A hank manager...Ch. 22 - Objectives of the master budget Dominos Pizza LLC...Ch. 22 - When compared to static budgets, flexible budgets:...Ch. 22 - Hannon Retailing Company prices its products by...Ch. 22 - Ming Company has budgeted sales at 6,300 units for...Ch. 22 - Krouse Company produces two products, forged...
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