Cornucopia Catering provides catered meals for business events and lunches in the Cincinnati area. The company uses two measures of activity, jobs and meals, in the cost formulas in its budgets and performance reports. The cost formula for catering supplies is $600 per month plus $83 per job plus $11 per meal. A typical job involves serving a number of meals to guests at a corporate function. The company expected its activity in July to be 28 jobs and 146 meals, but the actual activity was 24 jobs and 143 meals. The actual cost for catering supplies in July was $4,110. The catering supplies in the planning budget for July would be closest to: Multiple Choice O O $4,110 $4,530 $4,710 $4,165

Cornucopia Catering provides catered meals for business events and lunches in the Cincinnati area. The company uses two measures of activity, jobs and meals, in the cost formulas in its budgets and performance reports. The cost formula for catering supplies is $600 per month plus $83 per job plus $11 per meal. A typical job involves serving a number of meals to guests at a corporate function. The company expected its activity in July to be 28 jobs and 146 meals, but the actual activity was 24 jobs and 143 meals. The actual cost for catering supplies in July was $4,110. The catering supplies in the planning budget for July would be closest to: Multiple Choice O O $4,110 $4,530 $4,710 $4,165

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter3: Cost Behavior

Section: Chapter Questions

Problem 33P: Big Mikes, a large hardware store, has gathered data on its overhead activities and associated costs...

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Greiner Company makes and sells high-quality glare filters for microcomputer monitors. John Craven, controller, is responsible for preparing Greiners master budget and has assembled the following data for the coming year. The direct labor rate includes wages, all employee-related benefits, and the employers share of FICA. Labor saving machinery will be fully operational by March. Also, as of March 1, the companys union contract calls for an increase in direct labor wages that is included in the direct labor rate. Greiner expects to have 5,600 glare filters in inventory on December 31 of the current year, and has a policy of carrying 35 percent of the following month's projected sales in inventory. Information on the first four months of the coming year is as follows: Required: 1. Prepare the following monthly budgets for Greiner Company for the first quarter of the coming year. Be sure to show supporting calculations. a. Production budget in units b. Direct labor budget in hours c. Direct materials cost budget d. Sales budget 2. Calculate the total budgeted contribution margin for Greiner Company by month and in total for the first quarter of the coming year. Be sure to show supporting calculations. (CMA adapted)
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?
Acme Consulting uses job order costing to determine the cost of services provided to clients. For a particular year, Acme has budgeted the following amounts: Office rent and utilities $100,000 Support staff $70,000 Advertising $25,000 Supplies $5,000 Direct labor (based on 2.000 hours) $120,000 The firm has completed job 101 for a client. Job 101 involved 25 hours of direct labor. Acme assigns indirect costs based on direct labor hours. What is the cost of job 101? ANSWER $2,500 $4,000 $1,500 $5,000 I DON'T KNOW YET
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Coronado Consulting provides weekly payroll processing for a number of small businesses. Gia Coronado, the company's owner, has been using an activity-based costing system for several years. She used the following information in preparing this year's budget. Activity Cost Pool Total Cost Cost Driver Expected Driver Volume Setting up new employees $ 91,250 Number of new employees 500 Processing weekly payroll $ 950,000 Number of paychecks printed 2,500,000 Weekly reporting $ 374,000 Number of clients 200 Annual tax reporting $ 280,000 Number of W-2s printed 80,000 (a) Your answer is correct. Calculate the cost rates for each activity cost pool. (Round answers to 2 decimal places, e.g. 15.25.) Cost Pool Activity Rate 182.5 /new employee Setting up new employees $ .38 /check Processing weekly payroll 1870 /client Weekly reporting $ 3.5 | /W-2 Annual tax reporting %24 %24 %24 %24
In October, Temptations Event Planners (TEP) planned events for two clients. TEP worked 140 hours for Ward Corporation and 240 hours for Girardin Industries. TEP bills clients at the rate of $350 per hour; labor cost for its planning staff is $140 per hour. The total number of hours worked in October was 380, and overhead costs were $15,600. Overhead is applied to clients at $32 per planner- hour. In addition, TEP had $27,000 in marketing and administrative costs. All transactions are on account. All services were billed. Transaction (a) (b) (c) (d) Description Record labor cost Record applied service overhead Record cost of services billed Record actual service overhead Required: a. Show labor and overhead cost flows through T-accounts. b. Prepare an income statement for the company for October.
Herrod Catering uses two measures of activity, jobs and meals, in the cost formulas in its budgets and performance reports. The cost formula for catering supplies is $420 per month plus $102 per job plus $22 per meal. A typical job involves serving a number of meals to guests at a corporate function or at a host's home. The company expected its activity in December to be 12 jobs and 122 meals, but the actual activity was 6 jobs and 105 meals. The actual cost for catering supplies in December was $3,620. The spending variance for catering supplies in December would be closest to: Multiple Cholce 5708 U $708 F $278 U S278 F < Prev 4 of 10 Mc. Graw 10:52 AM 10/5/2021 W 92 F AQI 61 Type here to search DELL Home End Delete PgUp PgDn F11 F12 PrtScr Insert F8 F9 F10 F6 F7 F1 F2 F3 F4 F5 Num Lock Backspace
AirQual Test Corporation provides on-site air quality testing services. The company has provided the following cost formulas and actual results for the month of February: Revenue Technician wages Mobile lab operating expenses Office expenses Advertising expenses Insurance Miscellaneous expenses Jobs Revenue Expenses: Technician wages Mobile lab operating expenses Office expenses The company uses the number of jobs as its measure of activity. For example, mobile lab operating expenses should be $4,700 plus $32 per job, and the actual mobile lab operating expenses for February were $9,340. The company expected to work 150 jobs in February, but actually worked 158 jobs. Advertising expenses Insurance Miscellaneous expenses Required: Prepare a flexible budget performance report showing AirQual Test Corporation's revenue and spending variances and activity variances for February. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no…
AirQual Test Corporation provides on-site air quality testing services. The company has provided the following cost formulas and actual results for the month of February. Revenue Technician wages Mobile lab operating expenses office expenses Advertising expenses Insurance Miscellaneous expenses Jobs Revenue Expenses: Technician wages Mobile lab operating The company uses the number of jobs as its measure of activity. For example, mobile lab operating expenses should be $4,500 plus $35 per job, and the actual mobile lab operating expenses for February were $9,240. The company expected to work 140 jobs in February, but actually worked 146 jobs. expenses Required: Prepare a flexible budget performance report showing AirQual Test Corporation's revenue and spending variances and activity variances for February, (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)…
Chance Consulting, a consulting firm, specializes in advising companies on creating business plans. Chance Consulting uses a job cost system with a predetermined indirect cost allocation rate computed as a percentage of expected direct labor costs. At the beginning of the year, managing partner Sarah Chance prepared the following plan, or budget, for the year: Direct labor hours (professionals) 19,000 hours Direct labor costs (professionals) $2,650,000 Office rent $260,000 Support Staff Salaries $870,000 Utilities $340,000 Juda Resources is inviting several consulting firms to bid for work. Chance estimates that this job will require about 220 direct labor hours. Compute Chance Consulting’s hourly direct labor cost rate and their indirect cost allocation rate What is the estimate cost for the Juda Resources Consulting Contract? If Chance Consulting wants to earn a profit that equals 35% of the job’s cost, how much should the company bid…
In October, Temptations Event Planners (TEP) planned events for two clients. TEP worked 164 hours for Ward Corporation and 264 hours for Girardin Industries. TEP bills clients at the rate of $470 per hour; labor cost for its planning staff is $260 per hour. The total number of hours worked in October was 428, and overhead costs were $16,800. Overhead is applied to clients at $32 per planner-hour. In addition, TEP had $33,000 in marketing and administrative costs. All transactions are on account. All services were billed. Transaction Description (a) Record labor cost Record applied (b) service overhead Record cost of (c) services billed (d) Record actual service overhead Required: a. Show labor and overhead cost flows through T-accounts. b. Prepare an income statement for the company for October. Complete this question by entering your answers in the tabs below. Required Required A B Show labor and overhead cost flows through T-accounts. Wages Payable Work-in-Process Debit Credit Debit…
Hartley Uniforms produces uniforms. The company allocates manufacturing overhead based on the machine hours each job uses. Hartley Uniforms reports the following cost data for the past year: Budget Actual 7,600 hours 6,100 hours Direct labor hours Machine hours 7,200 hours 6,300 hours Depreciation on salespeople's autos $23,000 $23,000 Indirect materials $48,500 $50,500 Depreciation on trucks used to deliver uniforms to customers solla $13,000 $70,000 $40,000 $11,000 Depreciation on plant and equipment Indirect manufacturing labor $72,500 $42,000 Customer service hotline $19,000 $21,000 Plant utilities $35,900 $38,400 Direct labor cost $72,500 $85,500 Requirements 1odel tba 1. Compute the predetermined manufacturing overhead rate. 2. Calculate the allocated manufacturing overhead for the past year. 3. Compute the underallocated or overallocated manufacturing overhead. How will this underallocated or overallocated manufacturing overhead be disposed of? 4. How can managers usA acco