2-b. Prepare an operating income statement for the year using variable costing.

Miguez Corporation makes a product with the following standard costs:     Standard Quantity or Hours Standard Price or Rate Standard Cost Per Unit Direct materials 2.3 liters $ 7.00 per liter $ 16.10 Direct labor 0.7 hours $ 22.00 per hour $ 15.40 Variable overhead 0.7 hours $ 2.00 per hour $ 1.40   The company budgeted for production of 2,600 units in September, but actual production was 2,500 units. The company used 5,440 liters of direct material and 1,680 direct labor-hours to produce this output. The company purchased 5,800 liters of the direct material at $7.20 per liter. The actual direct labor rate was $24.10 per hour and the actual variable overhead rate was $1.90 per hour.   The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.   The labor rate variance for September is:   Multiple Choice   $3,675 F   $3,528 U   $3,528 F   $3,675 U

Preble Company manufactures one product Its variable manufacturing overhead is applied to production based on direct labor-hours and its standard cost card per unit is as follows: $40.00 Direct material: 4 pounds at $10.00 per pound Direct labor: 2 hours at $16 per hour Variable overhead: 2 hours at $6 per hour Total standard variable cost per unit The company also established the following cost formulas for its selling expenses: Fixed Cost Variable Cost per Month per Unit Sold Advertising Sales salaries and commissions Shipping expenses $ 240,000 The planning budget for March was based on producing and selling 30,000 units. However, during March the company actually produced and sold 34,500 units and incurred the following costs: a. Purchased 150,000 pounds of raw materials at a cost of $9.20 per pound. All of this material was used in production. b. Direct-laborers worked 62,000 hours at a rate of $17.00 per hour. C. Total variable manufacturing overhead for the month was $390,600.…

Maple Leaf Production manufactures truck tires. The following information is available for the last operating period.   Maple Leaf produced and sold 92,000 tires for $40 each. Budgeted production was 100,000 tires. Standard variable costs per tire follow.           Direct materials: 4 pounds at $2 $ 8.00   Direct labor: 0.4 hours at $18   7.20   Variable production overhead: 0.18 machine-hours at $10 per hour   1.80   Total variable costs $ 17.00       Fixed production overhead costs: Monthly budget $1,350,000   Fixed overhead is applied at the rate of $15.00 per tire. Actual production costs:            Direct materials purchased and used: 384,000 pounds at $1.80 $ 691,200   Direct labor: 35,200 hours at $18.40   647,680   Variable overhead: 17,280 machine-hours at $10.20 per hour   176,256   Fixed overhead   1,360,000       Required: a. Prepare a cost variance analysis for each variable cost for Maple Leaf Productions.b. Prepare a fixed overhead…

Ocean Company makes calendars. Information on cost per unit is as follows: Direct materials $1.50 Direct labor 1.20 Variable overhead 0.90 Variable marketing expense 0.40 Fixed marketing expenses totaled $12,000 and fixed administrative expenses totaled $32,000. The price per calendar is $15. What is the break-even point in units?

Great Outdoze Company manufactures sleeping bags, which sell for $66.30 each. The variable costs of production are as follows:          Direct material $ 19.20   Direct labor   10.50   Variable manufacturing overhead   8.10     Budgeted fixed overhead in 20x1 was $140,700 and budgeted production was 21,000 sleeping bags. The year’s actual production was 21,000 units, of which 17,700 were sold. Variable selling and administrative costs were $1.40 per unit sold; fixed selling and administrative costs were $29,000. Required:1. Calculate the product cost per sleeping bag under (a) absorption costing and (b) variable costing.2-a. Prepare an operating income statement for the year using absorption costing.2-b. Prepare an operating income statement for the year using variable costing.3. Reconcile reported operating income under the two methods using the shortcut method.

Miguez Corporation makes a product with the following standard costs: Direct materials Direct labor Variable overhead Standard Quantity or Hours 4.0 liters 0.7 hours 0.7 hours Standard Price or Rate $ 8.70 per liter $ 39.00 per hour $ 3.70 per hour Standard Cost Per Unit $ 34.80 $ 27.30 $ 2.59 The company budgeted for production of 4,300 units in September, but actual production was 4,200 units. The company used 7,140 liters of direct material and 1,850 direct labor-hours to produce this output. The company purchased 7,500 liters of the direct material at $8.90 per liter. The actual direct labor rate was $41.10 per hour and the actual variable overhead rate was $3.60 per hour. The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased. The variable overhead rate variance for September is: Multiple Choice О $294 F О О о $185 U $185 F $294 U

Godo

A company produces and sells a single product, the standard unit cost details of which are as follows: Direct material: 2 kilos at N$4.5 per kilo Direct labour: 3 hours at N$5 per hour Variable overhead: 3 hours at N$3 per hour The total overhead is budgeted at N$90 000 per month and is absorbed on a rate per unit basis. The budgeted output per month is 15 000 units The product has a standard selling price of N$50 per unit The following activity took place during January and February   January February sales 14 000 units 16 000 units production 16 000 units 14 500 units There is an opening stock on 1 January of 3000 units Required: (a) Calculate the standard cost and profit for one unit of output (b) Prepare profit statements for each month using (i) Marginal costing (ii) Absorption costing

Fremont Computer Company has been purchasing carrying cases for its portable computers at a purchase price of $40 per unit. The company, which is currently operating below full capacity, charges factory overhead to production at the rate of 25% of direct labor cost. The unit costs to produce comparable carrying cases are expected to be as follows:Cost Driver Dollar Amount per UnitDirect materials $15Direct labor 20Factory overhead (25% of direct labor) 5Total cost per unit 40If Fremont Computer Company manufactures the carrying cases, fixed factory overhead costs will not increase and variable factory overhead costs associated with the cases are expected to be 5% of the direct labor costs. a. Prepare a differential analysis dated September 30 to determine whether the company should make (Alternative 1) or buy (Alternative 2) the carrying case. b. Based on the data presented, would it be advisable to make the carrying cases or to continue buying them? Explain in your own words.