FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Flexible Budget for Various Levels of Activity
Palladium Inc. produces a variety of household cleaning products. Palladium’s controller has developed
Overhead Item | Total Fixed Cost | Variable Rate per Direct Labor Hour |
Maintenance | $ 86,000 | $0.20 |
Power | 0.45 | |
Indirect labor | 140,000 | 2.10 |
Rent | 35,000 |
Next year, Palladium expects production to require 90,000 direct labor hours.
Required:1. Prepare an overhead budget for the expected level of direct labor hours for the coming year.
Palladium Inc. | |||
Overhead Budget | |||
For the Coming Year | |||
Variable costs: | Rate per Hour | Activity Level 90,000 Hours |
|
Maintenance | $fill in the blank 336531fff03bfc2_1 | $fill in the blank 336531fff03bfc2_2 | |
Power | fill in the blank 336531fff03bfc2_3 | fill in the blank 336531fff03bfc2_4 | |
Indirect labor | fill in the blank 336531fff03bfc2_5 | fill in the blank 336531fff03bfc2_6 | |
Total variable cost | $fill in the blank 336531fff03bfc2_7 | ||
Fixed costs: | |||
Maintenance | $fill in the blank 336531fff03bfc2_8 | ||
Indirect labor | fill in the blank 336531fff03bfc2_9 | ||
Rent | fill in the blank 336531fff03bfc2_10 | ||
Total fixed costs | $fill in the blank 336531fff03bfc2_11 | ||
Total overhead costs | $fill in the blank 336531fff03bfc2_12 | ||
2. Prepare an overhead budget that reflects production that is 15% higher than expected and for production that is 15% lower than expected.
Activity Level | |||
Rate per Hour | fill in the blank 66eb4800efee05a_1 Hours |
fill in the blank 66eb4800efee05a_2 Hours |
|
Variable costs: | |||
Maintenance | $fill in the blank 66eb4800efee05a_3 | $ fill in the blank 66eb4800efee05a_4 | $ fill in the blank 66eb4800efee05a_5 |
Power | fill in the blank 66eb4800efee05a_6 | fill in the blank 66eb4800efee05a_7 | fill in the blank 66eb4800efee05a_8 |
Indirect labor | fill in the blank 66eb4800efee05a_9 | fill in the blank 66eb4800efee05a_10 | fill in the blank 66eb4800efee05a_11 |
Total variable costs | $fill in the blank 66eb4800efee05a_12 | $fill in the blank 66eb4800efee05a_13 | |
Fixed costs: | |||
Maintenance | $ fill in the blank 66eb4800efee05a_14 | $ fill in the blank 66eb4800efee05a_15 | |
Indirect labor | fill in the blank 66eb4800efee05a_16 | fill in the blank 66eb4800efee05a_17 | |
Rent | fill in the blank 66eb4800efee05a_18 | fill in the blank 66eb4800efee05a_19 | |
Total fixed costs | $fill in the blank 66eb4800efee05a_20 | $fill in the blank 66eb4800efee05a_21 | |
Total overhead costs | $fill in the blank 66eb4800efee05a_22 | $fill in the blank 66eb4800efee05a_23 |
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- Product Costs using Activity Rates Nozama.com Inc. sells consumer electronics over the Internet. For the next period, the budgeted cost of the sales order processing activity is $121,100, and 17,300 orders are estimated to be processed. a. Determine the activity rate of the sales order processing activity.$ per sales order b. Determine the amount of sales order processing cost that Nozama.com would receive if it had 9,900 sales orders.$arrow_forwardPrepare a flexible budget for the three sales levels under consideration. Waterway manufactures aluminum canoes. In planning for the coming year, CFO Alexis King is considering three different sales targets: 2,900 canoes, 3,340 canoes, and 3,550 canoes. Canoes sell for $990 each. The standard variable cost information for a canoe is as follows. Direct materials $ 297 Direct labor 112 Variable overhead Utilities 35 Indirect material 30 Indirect labor 60 Total $ 534 Annual fixed overhead cost is expected to be: Maintenance $ 20,600 Depreciation 43,500 Insurance 29,500 Rent 33,690 Total $ 127,290arrow_forwardPackaging Solutions Corporation manufactures and sells a wide variety of packaging products. Performance reports are prepared monthly for each department. The planning budget and flexible budget for the Production Department are based on the following formulas, where q is the number of labor-hours worked in a month: Cost Formulas Direct labor $16.20q Indirect labor $4,700 + $1.40q Utilities $5,700 + $0.50q Supplies $1,700 + $0.20q Equipment depreciation $18,600 + $2.50q Factory rent $8,400 Property taxes $2,600 Factory administration $13,100 + $0.70q The Production Department planned to work 4,100 labor-hours in March; however, it actually worked 3,900 labor-hours during the month. Its actual costs incurred in March are listed below: Actual Cost Incurred in March Direct labor $ 64,740 Indirect labor $ 9,620 Utilities $ 8,140 Supplies $ 2,730 Equipment depreciation $ 28,350 Factory rent $ 8,800 Property taxes $ 2,600 Factory…arrow_forward
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