FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Related questions
Question
Flexible budget, direct materials, and direct manufacturing labour variances. Emerald
Statuary manufactures bust statues of famous historical figures. All statues are the same size. Each unit
requires the same amount of resources. The following information is from the static budget for 2021:
| Expected production and sales Expected selling price per unit Total fixed costs |
7,000 units $ 680 $1,400,000 |
Standard quantities, standard prices, and standard unit costs follow for direct materials and direct manufacturing labour:
Standard Quantity Standard Price Standard Unit Cost
Standard quantity Standard price Standard unit cost
| Direct materials Direct manufacturing labour |
10 kilograms 3.7 hours |
$ 8 per kilogram $50 per hour |
$ 80 $185 |
During 2021, actual number of units produced and sold was 4,800, at an average selling price of $720. Actual
cost of direct materials used was $392,700, based on 66,000 kilograms purchased at $5.95 per kilogram.
Direct manufacturing labour-hours actually used were 18,300, at the rate of $48 per hour. As a result, actual
direct
Required
1. Calculate the sales-volume variance and flexible-
2. Compute price and efficiency variances for direct materials and direct manufacturing labour.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution
Trending nowThis is a popular solution!
Step by stepSolved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- am. 164.arrow_forwardThe master budget of Vaughn Manufacturing shows that the planned activity level for next year is expected to be 50000 machine hours. At this level of activity, the following manufacturing overhead costs are expected: Indirect labor Machine supplies Indirect materials Depreciation on factory building Total manufacturing overhead $810000 O $1666000. O$1514000. O $1704000. O $1420000. 190000 230000 190000 $1420000 A flexible budget for a level of activity of 60000 machine hours would show total manufacturing overhead costs ofarrow_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_forward
- Bark Mode is considering switching to an Activity Based Costing (ABC) approach to budgeting. It has identified three cost pools. Budgeted cost and activity for each of its three activity cost pools are shown below. The company plans to produce and sell 120,000 standard units and 80,000 deluxe units. Budgeted Activity Activity Cost Pool Activity Driver Budgeted Cost Standard Deluxe Packaging Finished goods $100,000 120,000 finished units 80,000 finished units Material handling Total parts $ 50,000 600,000 total parts 650,000 total parts Production setups Total setups $120,000 6 total setups 14 total setups You have already calculated the amount of budgeted overhead that will be applied to the Standard system. Calculate the overhead cost per Standard system unit.arrow_forwardPerez Publications established the following standard price and costs for a hardcover picture book that the company produces. Standard price and variable costs Sales price Materials cost Labor cost Overhead cost Selling, general, and administrative costs Planned fixed costs Manufacturing overhead Selling, general, and administrative Perez planned to make and sell 25,000 copies of the book. Number of units Variable manufacturing costs Required: a.-d. Prepare the pro forma income statement that would appear in the master budget and also flexible budget income statements, assuming production volumes of 24,000 and 26,000 units. Determine the sales and variable cost volume variances, assuming volume is actually 26,000 units. Indicate whether the variances are favorable (F) or unfavorable (U). Note: Select "None" if there is no effect (i.e., zero variance). Fixed costs $36.50 8.60 4.40 Master Budget 25,000 7.10 $ 131,000 50,000 Flexible Budgets 24,000 < Prev 4 of 4 26,000 Volume Variances…arrow_forwardZizi plc uses a standard absorption costing system and produces and sells product 8W. The standard cost card is below: Product 8W (€ per unit) Direct material (5 per kg) 15 Direct labour (6 per hour) 12 Fixed manufacturing overhead 10 Total production cost 37 Standard profit 13 Standard selling price 50 * Absorption rate based on standard labour hours Budgeted and actual production and sales units for december 2020 were as follows: Budget Actual Production 1,100 900 Sales 1,000 800 Actual data for December 2020 were as follows € Direct material purchases 1,200 kgs costing 12,000 Direct materials used 1,100 kgs Direct labour hours 500 hours costing 6,000 Fixed manufacturing overhead 5,000 Sales revenue 30,000 An analysis of the Direct labour hours shows that the 500 hours that were paid for 50 were idle time due to a machinery breakdown. There were no inventories of Direct materials or finished products (planned or actual) at the…arrow_forward
arrow_back_ios
arrow_forward_ios
Recommended textbooks for you
AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,
Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSON
Intermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill Education
Financial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education