The Amherst Company produces engine parts for car manufacturers. A new accountant intern at Amherst hasBegin with the flexible budget columns, then the sales volume variance column. Label each variance asfavorable (F) or unfavorable (U). (For variances with a $0 balance, make sure to enter "0" in the appropriate field.If the variance is zero, do not select a label. Round your answers to the nearest whole dollar.)ActualFlexible-BudgetResultsVarianceUnits sold106,000Revenues (sales)$683,700470,000Variable costsContribution margin213,700200,700Fixed costs$13,000Operating incomeFlexibleBudgetQuestion Viewer

Part 2: Explanation:Step 1: Calculate the flexible budget columns by multiplying the budgeted…

Answered: The Amherst Company produces engine…

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter3: Cost Behavior

Section: Chapter Questions

Problem 40P: The Lockit Company manufactures door knobs for residential homes and apartments. Lockit is...

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The following is a partial performance report for a revenue center for the Southeast Division of Flower City Restaurants. (Click the icon to view the financial results.) Fill in the missing amounts. Indicate whether each variance is favorable (F) or unfavorable (U). (Enter the variances as positive numbers and round the vari percentages to the nearest tenth of a percent, X.X%. Label each variance as favorable (F) or unfavorable (U).) Product Food Dessert Bar Catering Flower City Restaurants Southeast Division Sales Revenue for For the Month Ending June 30 $ $ $ $ Actual Sales Budgeted Sales 146,000 22,000 54,000 55,000 141,620 S 21,340 $ 58,320 $ 52,800 $ Variance (U or F) GLUTE Variance % (U or F) % % % %
Using amounts from "professor" as ACTUAL results (RED box with BLACK numbers), prepare a variance analysis between your own(students) BUDGET and my actual results. You should present three variances: (1) the $ change in profit due solely to me selling more or less units (i.e., sales revenue volume variance), (2) the $ change in profit due solely to me selling units at a higher or lower price (i.e., sales revenue price variance), and (3) the $ change in profit due solely to me producing more or less units (most similar to direct materials production volume variance). Cups Price Cups Sold Produced Profit professor $1.35 105 student $1.00 200 126 210 Price $105.75 $140.00
K Juda Recliners manufactures leather recliners and uses flexible budgeting and a standard cost system. Juda allocates overhead based on yards of direct materials. The company's performance report includes the following selected data: Data table X Sales Static Budget Actual Results (1,025 recliners) (1,005 recliners) (1,025 recliners x $515 each) (1,005 recliners x $480 each) $ 527 875 S 482 400 Variable Manufacturing Costs: Direct Materials (6,150 yds @ $8.90/ yd.) (6,300 yds @ $8.707 yd.) 54.735 54.810 Direct Labor (10,250 DLHr @ $11.30/DLHr) (9,850 DLHr @ $11.40/DLHr) 115 825 112 290 Variable Overhead (6,150 yds @ $5.107 yd.) 31,365 (6,300 yds. @$6.50/yd.) 40.950 Fixed Manufacturing Costs: Fixed Overhead Total Cost of Goods Sold 62,730 64,730 264,655 272,780 263,220 $ 209,620 Gross Profit
Earthern Ware is a manufacturer of large flower pots for urban settings. The company has these standards: E (Click the icon to view the standards.) (Click the icon to view the actual results.) Read the requirements. Requirement 1. Compute the direct material price variance and the direct material quantity variance. (Enter the variances as positive numbers. Enter currency amounts in the formula to the nearest cent and then round the final variance amount to the nearest whole dollar. Label the variance as favorable (F) or unfavorable (U). Abbreviations used: DM = Direct materials) First determine the formula for the price variance, then compute the price variance for direct materials. ) = DM price variance Actual Results Earthern Ware allocated fixed manufacturing overhead to production based on standard direct labor hours. Last month, the company reported the following actual results for the production of 1,100 flower pots: Purchased 14,120 pounds at a cost of $5.30 per pound; used…
ComplexChem, Inc., produces chemicals for large biotech companies. It has the following data for manufacturing overhead costs during August 2020: LOADING... (Click the icon to view the data.) Requirement Fill in the blanks. Use F for favorable and U for unfavorable: LOADING... (Click the icon to view the table.) (If no variance exists leave the dollar value blank. Label the variance as favorable (F), unfavorable (U) or never a variance (N).) Variable (1) Spending variance (2) Efficiency variance (3) Production-volume variance (4) Flexible-budget variance (5) Underallocated (overallocated) manufacturing overhead Fixed Choose from any list or enter any number in the input fields and then continue to the next question. Data Table…
at James, the purchasing agent for a local plant of the Oakden Electronics Division, was considering the possible purchase of a component from a new supplier. The component’s purchase price, $0.90, compared favorably with the standard price of $1.10. Given the quantity that would be purchased, Pat knew that the favorable price variance would help to offset an unfavorable variance for another component. By offsetting the unfavorable variance, his overall performance report would be impressive and good enough to help him qualify for the annual bonus. More importantly, a good performance rating this year would help him to secure a position at division headquarters at a significant salary increase.Purchase of the part, however, presented Pat with a dilemma. Consistent with his past behavior, Pat made inquiries regarding the reliability of the new supplier and the part’s quality. Reports were basically negative. The supplier had a reputation for making the first two or three deliveries…
You work for a manufacturing company and have just completed the budget process for the upcoming business year. At the end of the first quarter, you take the actuals and compare them to the budget. You notice there are differences that need explanation and create the static and flexible budget variances. You present this to management and they request you to explain the variances in more detail. You go and create the Flexible Budget Performance Report and present this. You also need to explain the reasons for the variances and who is responsible. Explain the calculations used to create this report. Explain why the variances using standard costs better reflect the actual variance and how to determine who is responsible for each variance
Sulert, Inc., produces and sells gel-filled ice packs. Sulert’s performance report for April follows: REQUIRED: 1. Calculate the contribution margin variance and the contribution margin volume variance. 2. Calculate the market share variance and the market size variance. (CMA adapted)
Pat James, the purchasing agent for a local plant of the Oakden Electronics Division, was considering the possible purchase of a component from a new supplier. The component’s purchase price, $0.90, compared favorably with the standard price of $1.10. Given the quantity that would be purchased, Pat knew that the favorable price variance would help to offset an unfavorable variance for another component. By offsetting the unfavorable variance, his overall performance report would be impressive and good enough to help him qualify for the annual bonus. More importantly, a good performance rating this year would help him to secure a position at division headquarters at a significant salary increase. Purchase of the part, however, presented Pat with a dilemma. Consistent with his past behavior, Pat made inquiries regarding the reliability of the new supplier and the part’s quality. Reports were basically negative. The supplier had a reputation for making the first two or three deliveries on…
These are True/False questions. ____ 6. If the total unit cost of manufacturing Product Y is currently $36 and the total unit cost after modifying the style is estimated to be $48, the differential cost for this situation is $12. ____ 7. A process whereby the effect of fluctuations in level of activity is built into the budgeting system is referred to as flexible budgeting. ____ 8. In an investment center, the manager has the responsibility and the authority to make decisions that affect not only costs and revenues, but also the plant assets invested in the center. ____ 9. The capital expenditures budget summarizes future plans for acquisition of fixed assets. ____ 10. The process by which management plans, evaluates, and controls long-term investment decisions involving fixed assets is called capital investment analysis.
The following table contains a hypothetical partial master budget performance report for European Fudge Company. (Click the icon to view the partial master budget performance report.) Fill in the missing amounts. Be sure to indicate whether variances are favorable (F) or unfavorable (U). (Enter the variances as positive numbers. Label each variance as favorable (F) or unfavorable (U). If the variance is 0, make sure to enter in a "0". A variance of zero is considered favorable.) European Fudge Company Flexible Budget Performance Report: Sales and Operating Expenses For Year Ended December 31 Sales volume (number of cases sold) Shipping expense ($4 per case sold) Actual Sales revenue ($34 per case) $ 419,500 $ Less variable expenses: Sales expense ($5 per case sold) Contribution margin 12,500 $ 60,100 49,500 309,900 Flexible Budget Variance Flexible Budget 2200 F 400 U 12,500 5,500 U $425,000 2900 F $ 62,500 50,000 312,500 Volume Variance 40800 F $ 6000 U$ 1200 U 33600 F Master Budget…
Data table Last month, CenterWare reported the following actual results for the production of 70,000 bottles: Direct materials..... 1.5 kg per bottle, at a cost of $0.70 per kg Direct labour...... . 1/4 hour per bottle, at a cost of $13.20 per hour Actual variable overhead. ......... $104,600 Actual fixed overhead... $28,700 Done Data table The company has these standards: Direct materials (clay) 1.3 kg per bottle, at a cost of $0.40 per kg Direct labour... 1/5 hour per bottle, at a cost of $14.40 per hour Static budget variable overhead ......... $70,500 Static budget fixed overhead.... .... $30,500 Static budget direct labour hours......... 10,000 hours Static budget number of bottles.......... 52,000 CenterWare allocates manufacturing overhead to production based on standard direct labour hours. Print Done I Print

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