FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Question
One subunit of Speed Sports Manufacturing Company had the following financial results last month:
Data table:
|
A
|
B
|
C
|
D
|
E
|
1
|
Speed Sports Manufacturing Company—Camping and Hiking Subunit
|
||||
2
|
Monthly Performance Report
|
||||
3
|
For the Month
|
||||
4
|
|
Actual
|
Budgeted
|
Variance *
|
Variance Percentage *
|
---|---|---|---|---|---|
5
|
Direct materials
|
$16,140
|
$15,000
|
|
|
6
|
Direct labor
|
19,020
|
20,000
|
|
|
7
|
Indirect labor
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29,300
|
25,000
|
|
|
8
|
Utilities
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13,110
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12,000
|
|
|
9
|
|
19,000
|
19,000
|
|
|
10
|
Repairs and maintenance
|
3,370
|
4,000
|
|
|
11
|
Total
|
$99,940
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$95,000
|
|
|
*Be sure to indicate whether each variance is favorable (F) or unfavorable (U).
Requirements:
1.
|
Complete the performance evaluation report for this subunit.
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2.
|
Based on the data presented, what type of responsibility center is the subunit?
|
3.
|
Which items should be investigated if part of the management's decision criteria is to investigate all variances exceeding $3,400 or 12%? |
4.
|
Should only unfavorable variances be investigated? Explain.
|
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- Gayner Corporation is an oil well service company that measures its output by the number of wells serviced. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results of operations for November. Variable Actual Fixed Element Element per Total for per Month November Well Serviced 4,300 $ 148,400 Revenue Employee salaries and 1,000 $ 006 wages 009 2$ 20,200 Servicing materials $29,600 30,300 Other expenses When the company prepared its planning budget at the beginning of November, it assumed that 30 wells would have been serviced. However, 34 wells were actually serviced during November. The spending variance for "Servicing materials" for November would have been closest to: MacBook Air い DD 888 delete 8. 6 9 %24 %24 %24 %24 %24arrow_forwardsports manufacturing company attached in ss below thanks for helparrow_forwardYou are in charge of the following cost Budgeted production in units: 10,000 Budgeted Cost: Indirect Materials Indirect Labor Utilities Depreciation Property Taxes Supervision 5 250,000 $ 260,000 $ 190,000 $ 280,000 70,000 50,000 S 1,100,000 Demand has increased 12,000 Actual Cost Indirect Materials $ 295,000 $ 312,000 5 225,000 S 280,000 70,000 50,000 5 1,232,000 Indirect Labor Utilities Depreciation Property Taxes Supervision Your manager put the following table together: Budget Actual Variance production in units: 10,000 12,000 Frfavorable U-Unfavcrable Budgeted Cost: Indirect Materials Indirect Labor $ 295,000 S 312,000 S 225,000 S 280,000 S 70,000 5 50.000 $1,232.000 $ 45,000 $ 52,000 $ 35,000 Utilities Depreciation Property Taxes Supervision 250,000 S 260,000 S 190,000 S 280,000 70,000 %24 50,000 S 1,100,000 S 132,000 Requirement: Looking at the table, he is very dissatisfied with your performance. Should he fire you today? Please explain. Show calculations where necessary.arrow_forward
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