The Cotton Shop (TCS) specializes in making fraternity and sorority tote bags for the college market. TCS produces bags in batch sizes of 100. For rush orders, TCS will produce smaller batches for an additional charge of $180 per setup. Budgeted and actual costs for the production process for 2020 are as follows: (Click the icon to view the budgeted and actual costs.)

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter6: Activity-based, Variable, And Absorption Costing
Section: Chapter Questions
Problem 5PB: Wrappers Tape makes two products: Simple and Removable. It estimates it will produce 369,991 units...
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Mn51.
b
hi
Data table
Number of bags produced
Average number of bags per setup
Hours to set up machines
Direct variable cost per setup-hour
Total fixed setup overhead costs
Print
60
S
Static-Budget
Amounts
Done
Actual Results
114,000
125,000
100
6
25 $
60,000 $
95
5.8
27
62,640
- X
-
bra
Transcribed Image Text:b hi Data table Number of bags produced Average number of bags per setup Hours to set up machines Direct variable cost per setup-hour Total fixed setup overhead costs Print 60 S Static-Budget Amounts Done Actual Results 114,000 125,000 100 6 25 $ 60,000 $ 95 5.8 27 62,640 - X - bra
The Cotton Shop (TCS) specializes in making fraternity and sorority tote bags for the college market. TCS produces bags in batch sizes of 100. For rush orders, TCS will
produce smaller batches for an additional charge of $180 per setup. Budgeted and actual costs for the production process for 2020 are as follows:
(Click the icon to view the budgeted and actual costs.)
Requirement 6. For direct variable setup costs, compute the price and efficiency variances.
Begin by calculating the following amounts for the variable overhead.
Actual input
Variable overhead
Actual costs
Fixed overhead
incurred
budgeted rate
Requirement 7. For fixed setup overhead costs, compute the spending and the production-volume variances.
Same budgeted
lump sum
regardless of
output level
Actual costs
Flexible
budget
incurred
date shal the variance as favorable (F) or unfavorable (U1)
Allocated
overhead
Transcribed Image Text:The Cotton Shop (TCS) specializes in making fraternity and sorority tote bags for the college market. TCS produces bags in batch sizes of 100. For rush orders, TCS will produce smaller batches for an additional charge of $180 per setup. Budgeted and actual costs for the production process for 2020 are as follows: (Click the icon to view the budgeted and actual costs.) Requirement 6. For direct variable setup costs, compute the price and efficiency variances. Begin by calculating the following amounts for the variable overhead. Actual input Variable overhead Actual costs Fixed overhead incurred budgeted rate Requirement 7. For fixed setup overhead costs, compute the spending and the production-volume variances. Same budgeted lump sum regardless of output level Actual costs Flexible budget incurred date shal the variance as favorable (F) or unfavorable (U1) Allocated overhead
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