Chapter 8, Problem 8.35P

1.

To determine

To compute: Static budget number of crates for 2014.

Given information:

2014,

Number of pair of shoes shipped as per static-budget results is 225,000

Average number of pair of shoes per crate as per static-budget results is 15.

2.

To determine

To compute: Flexible budget number of crates for 2014.

Given information:

2014,

Number of crates for 225,000 pair of shoes shipped as per static-budget results is 15,000.

Number of pair of shoes actually shipped is 180,000.

3.

To determine

To compute: Actual number of crates shipped in 2014.

Given information:

2014,

Actual pair of shoes shipped is 180,000.

Average number of pair of shoes per crate as per actual results is 10.

4.

To determine

To compute: Budgeted fixed overhead allocation rate.

Given information:

2014,

Standard manufacturing fixed overhead cost is $54,000.

Budgeted crate packing hours are computed to be $6,250\text{ hours}\left(15,000\text{ budgeted number of crates}\times 0.90\text{ hours per crate}\right)$.

5.

To determine

To compute: Price and efficiency variance for direct variable setup costs.

Given information:

Price variance

Actual direct cost is $16.

Budgeted direct cost is $18.

Actual number of hours $19,800\text{ hours}\left(\text{1}\text{.10 hours per crate}\times 18,000\text{ Total actual crate}\right)$

Efficiency variance

Number of pair of shoes shipped as per budgeted results is 225,000.

Number of pair of shoes shipped as per actual results is 18,000.

Actual number of hours $19,800\text{ hours}\left(\text{1}\text{.10 hours per crate}\times 18,000\text{ Total actual crate}\right)$

Budgeted variable rate is $18.

6.

To determine

To compute: Spending and production-volume variance for fixed overhead costs.

Given information:

Spending Variance

Actual fixed cost is $56,500.

Budgeted fixed cost is $54,000

Production volume variance

Budgeted fixed cost is $54,000.