Horngren's Financial & Managerial Accounting, The Managerial Chapters (6th Edition)
6th Edition
ISBN: 9780134486857
Author: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura
Publisher: PEARSON
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Textbook Question
Chapter 23, Problem 28AP
Moss manufactures coffee mugs that it sells to other companies for customizing with their own logos. Moss prepares flexible budgets and uses a
Actual cost and production information for July 2018 follows:
- a. There were no beginning or ending inventory balances. All expenditures were on account.
- b. Actual production and sales were 62,500 coffee mugs.
- c. Actual direct materials usage was 11,000 lbs. at an actual cost of $0.17 per lb.
- d. Actual direct labor usage was 197,000 minutes at a total cost of $25,610.
- e. Actual
overhead cost was $10,835 variable and $29,765 fixed. - f. Selling and administrative costs were $95,000.
Requirements
- 1. Compute the cost and efficiency variances for direct materials and direct labor.
- 2. Journalize the purchase and usage of direct materials and the assignment of direct labor, including the related variances.
- 3. For manufacturing overhead, compute the variable overhead cost and efficiency variances and the fixed overhead cost and volume variances.
- 4. Journalize the actual manufacturing overhead and the allocated manufacturing overhead. Journalize the movement of all production costs from Work-in-Process Inventory. Journalize the adjusting of the Manufacturing Overhead account.
- 5. Moss intentionally hired more highly skilled workers during July. How did this decision affect the cost variances? Overall, was the decision wise?
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Formula
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AAA Manufacturing Firm has provided the following sales, cost and expense figures in relation to expected operations for the coming year. You are tasked to prepare forecast Statements of Financial Performance using flexible budget techniques and incorporating the following information.All units are sold when manufactured due to the highly perishable nature of the company’s product. As such there are no inventories of raw materials, work in process or finished goods on hand.The selling price of the company’s single product is $50.00 and the expected sales quantity for the coming year is in the vicinity of 20,000 and 25,000 units.Required: Prepare an Income Statement budget using flexible budgeting techniques at production and sales levels of:(Scenario a) 20,000 units(Scenario b) 25,000 units
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Ocean Sails manufactures sailing boats in two models: the Wave Rider and the Stress Killer. The company currently uses a variable costing system for internal reporting purposes. Its budgeted profit statement for the year ended 31 March 2021 is provided in the following table:
Wave Rider
(£)
Stress Killer
(£)
Total
(£)
Sales revenues
52,500,000
105,000,000
157,500,000
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Wave Rider
Stress Killer
(Units)
(Units)
Opening inventory
5
8
Units produced
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25
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5
Units…
Chapter 23 Solutions
Horngren's Financial & Managerial Accounting, The Managerial Chapters (6th Edition)
Ch. 23 - Garland Company expects to sell 600 wreaths in...Ch. 23 - Match the variance to the correct definition....Ch. 23 - Match the variance to the correct definition....Ch. 23 - Match the variance to the correct definition....Ch. 23 - Match the variance to the correct definition....Ch. 23 - Match the variance to the correct definition....Ch. 23 - Prob. 7TICh. 23 - Prob. 8TICh. 23 - Prob. 9TICh. 23 - Prob. 10TI
Ch. 23 - Prob. 11TICh. 23 - Tipton Company manufactures shirts, During June,...Ch. 23 - Prob. 13TICh. 23 - Prob. 14TICh. 23 - Prob. 15TICh. 23 - This Try It! continues the previous Try It! for...Ch. 23 - Calculate the following variances: Fixed overhead...Ch. 23 - Prob. 18TICh. 23 - Prob. 19TICh. 23 - Prob. 20TICh. 23 - Prob. 21TICh. 23 - Prob. 22TICh. 23 - Prob. 23TICh. 23 - Prob. 24TICh. 23 - Prob. 25TICh. 23 - MajorNet Systems is a start-up company that makes...Ch. 23 - MajorNets sales volume variance for total costs is...Ch. 23 - MajorNets flexible budget variance for total costs...Ch. 23 - MajorNet Systemss managers could set direct labor...Ch. 23 - What is MajorNets direct labor cost variance for...Ch. 23 - What is MajorNets direct labor efficiency variance...Ch. 23 - FrontGrades standard variable manufacturing...Ch. 23 - Calculate the variable overhead cost variance for...Ch. 23 - Calculate the variable overhead efficiency...Ch. 23 - Prob. 10QCCh. 23 - MajorNet Systemss static budget predicted...Ch. 23 - Prob. 1RQCh. 23 - Prob. 2RQCh. 23 - What is a static budget performance report?Ch. 23 - How do flexible budgets differ from static...Ch. 23 - Prob. 5RQCh. 23 - What are the two components of the static budget...Ch. 23 - What is a flexible budget performance report?Ch. 23 - Prob. 8RQCh. 23 - Prob. 9RQCh. 23 - Give the general formulas for determining cost and...Ch. 23 - How does the static budget affect cost and...Ch. 23 - List the direct materials variances, and briefly...Ch. 23 - Prob. 13RQCh. 23 - Prob. 14RQCh. 23 - List the fixed overhead variances, and briefly...Ch. 23 - Prob. 16RQCh. 23 - Prob. 17RQCh. 23 - Prob. 18RQCh. 23 - Prob. 19RQCh. 23 - Prob. 20RQCh. 23 - Prob. 1SECh. 23 - Moje, Inc. manufactures travel locks. The budgeted...Ch. 23 - Complete the flexible budget variance analysis by...Ch. 23 - Prob. 4SECh. 23 - Setting standards for a product may involve many...Ch. 23 - Prob. 6SECh. 23 - Martin, Inc. manufactures lead crystal glasses....Ch. 23 - Martin, Inc. is a manufacturer of lead crystal...Ch. 23 - Prob. 9SECh. 23 - Prob. 10SECh. 23 - Prob. 11SECh. 23 - Prob. 12SECh. 23 - Prob. 13SECh. 23 - Prob. 14SECh. 23 - Prob. 15ECh. 23 - Murphy Company managers received the following...Ch. 23 - Prob. 17ECh. 23 - Prob. 18ECh. 23 - Prob. 19ECh. 23 - Prob. 20ECh. 23 - Prob. 21ECh. 23 - Prob. 22ECh. 23 - Prob. 23ECh. 23 - McCarthy Fender, which uses a standard cost...Ch. 23 - Cell One Technologies manufactures capacitors for...Ch. 23 - Morton Recliners manufactures leather recliners...Ch. 23 - Hear Smart manufactures headphone cases. During...Ch. 23 - Moss manufactures coffee mugs that it sells to...Ch. 23 - Review your results from Problem P23-28A. Mosss...Ch. 23 - Prob. 30BPCh. 23 - McKnight Recliners manufactures leather recliners...Ch. 23 - Headset manufactures headphone cases. During...Ch. 23 - Prob. 33BPCh. 23 - Review your results from Problem P23-33B....Ch. 23 - Download an Excel template for this problem online...Ch. 23 - This continues the Piedmont Computer Company...Ch. 23 - Prob. 1TIATCCh. 23 - Suppose you manage the local Scoopys ice cream...Ch. 23 - Drew Gastello, general manager of Sunflower...Ch. 23 - In 75 words or fewer, explain what a cost variance...
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