Skysong Corp. supplies its customers with high-quality canvas tents. These canvas tents sell for $170 each, with the following DM andDL usage and price expectations.Direct materialsDirect laborVariable-MOH(a)11 square yards per unit1.3 DL hours per unit1.3 DL hours per unitThroughout the year, Skysong used 4,095 DL hours in the process of making 3,250 tents. The company had originally planned toproduce and sell 2,950 tents. Its actual variable-MOH costs totaled $10,852 for the year.Determine Skysong's variable-MOH price and efficiency variances. Also identify whether the company's variable-MOH costswere under-or overapplied, and by how much.Variable-MOH price varianceVariable-MOH$Variable-MOH efficiency variance $@ $5/square yard@$14/DL hour@$2.60/DL hour$

The variance is the difference between the actual data and standard output of the production. The…

Answered: Skysong Corp. supplies its customers…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter6: Activity-based, Variable, And Absorption Costing

Section: Chapter Questions

Problem 2PB: Five Card Draw manufactures and sells 10,000 units of Aces, which retails for $200, and 8,000 units...

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Box Springs. Inc., makes two sizes of box springs: queen and king. The direct material for the queen is $35 per unit and $55 is used in direct labor, while the direct material for the king is $55 per unit, and the labor cost is $70 per unit. Box Springs estimates it will make 4,300 queens and 3,000 kings in the next year. It estimates the overhead for each cost pool and cost driver activities as follows: How much does each unit cost to manufacture?
Bobcat uses a traditional cost system and estimates next years overhead will be $800.000, as driven by the estimated 25,000 direct labor hours. It manufactures three products and estimates the following costs: If the labor rate is $30 per hour, what is the per-unit cost of each product?
Gent Designs requires three units of part A for every unit of Al that it produces. Currently, part A is made by Gent, with these per-unit costs in a month when 4.000 units were produced: Variable manufacturing overhead is applied at $1.00 per unit. The other $0.30 of overhead consists of allocated fixed costs. Gent will need 6,000 units of part A for the next years production. Cory Corporation has offered to supply 6,000 units of part A at a price of $7.00 per unit. It Gent accepts the offer, all of the variable costs and $1,200 of the fixed costs will be avoided. Should Gent Designs accept the offer from Cory Corporation?
Remarkable Enterprises requires four units of part A for every unit of Al that it produces. Currently, part A is made by Remarkable, with these per-unit costs in a month when 4,000 units were produced: Variable manufacturing overhead is applied at $1.60 per unit. The other $0.50 of overhead consists of allocated fixed costs. Remarkable will need 8,000 units of part A for the next years production. Altoona Corporation has offered to supply 8,000 units of part A at a price of $8.00 per unit. If Remarkable accepts the offer, all of the variable costs and $2,000 of the fixed costs will be avoided. Should Remarkable accept the offer from Altoona Corporation?
Colonels uses a traditional cost system and estimates next years overhead will be $480,000, with the estimated cost driver of 240,000 direct labor hours. It manufactures three products and estimates these costs: If the labor rate is $25 per hour, what is the per-unit cost of each product?
Cozy, Inc., manufactures small and large blankets. It estimates $350,000 in overhead during the manufacturing of 75,000 small blankets and 25,000 large blankets. What is the predetermined overhead rate if a small blanket takes 1 machine hour and a large blanket takes 2 machine hours?
Cozy, Inc., manufactures small and large blankets. It estimates $950,000 in overhead during the manufacturing of 360,000 small blankets and 120,000 large blankets. What is the predetermined overhead rate if a small blanket takes 2 hours of direct labor and a large blanket takes 3 hours of direct labor?
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 itsoperating budget for the coming year. Selected data regarding the companys two products areas follows: Manufacturing overhead is applied to units using direct labor hours. Variable manufacturing overhead Ls projected to be 25,000, and fixed manufacturing overhead is expected to be15,000. The estimated cost to produce one unit of the laminated putter head is: a. 42. b. 46. c. 52. d. 62.
Boarders estimates overhead will utilize 160,000 machine hours and cost $80,000. It takes 4 machine hours per unit, direct material cost of $5 per unit, and direct labor of $5 per unit. What is the cost of each unit produced?
Five Card Draw manufactures and sells 10,000 units of Aces, which retails for $200, and 8,000 units of Kings, which retails for $170. The direct materials cost is $20 per unit of Aces and $15 per unit of Kings. The labor rate is $30 per hour, and Five Card Draw estimated 64000 direct labor hours. It takes 4 direct labor hours to manufacture Aces and 3 hours for Kings. The total estimated overhead is $128,000. Five Card Draw uses the traditional allocation method based on direct labor hours. A. How much is the gross profit per unit for Aces and Kings? B. What is the total gross profit for the year?
Blue Corp. supplies its customers with high-quality canvas tents. These canvas tents sell for $170 each, with the following DM and DL usage and price expectations. Direct materials 9 square yards per unit @ $4/square yard Direct labor 1.2 DL hours per unit @$12/DL hour Throughout the year, Blue used 32,430 square yards of fabric in the process of making 3,450 tents. The company had originally planned to produce and sell 3,150 tents. In keeping with its desire to hold some DM Inventory at year-end, it purchased 34,380 square yards of canvas at $4.20 per square yard. Blue's DL cost totaled $52,026 for the 4,002 hours that were actually used. (a) Determine Blue's DM and DL price and efficiency variances; specify the amount and sign for all. Price variance $ Efficiency A variance DM A +A DL
Swifty Corp. supplies its customers with high-quality canvas tents. These canvas tents sell for $170 each, with the following DM and DL usage and price expectations. Direct materials Direct labor Variable-MOH Fixed-MOH (a) Throughout the year, Swifty used 3,780 DL hours in the process of making 3,500 tents. The company had originally planned to produce and sell 3,200 tents with budgeted fixed-MOH cost of $17,600. Its actual fixed-MOH costs amounted to $17,086 for the year. (b) 10 square yards per unit 1.1 DL hours per unit 1.1 DL hours per unit 1.1 DL hours per unit Your answer is correct. Determine Swifty's fixed-MOH price and volume variances. Also identify whether the company's fixed-MOH costs were under-or overapplied, and by how much. Fixed-MOH price variance Fixed-MOH Fixed-MOH volume variance $ (2) $ (3) @ $6/square yard @ $16/DL hour @ $2.80/DL hour No. Account Titles and Explanation (1) @ $5/DL hour 514 1650 2164 Favorable Record the journal entries to accompany the following…

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