Variable Overhead Variances, Service Company Rostand Inc. operates a delivery service for over 70 restaurants. The corporation has a fleet of vehicles and has invested in a sophisticated, computerized communications system to coordinate its deliveries. Rostand has gathered the following actual data on last year's delivery operations: Deliveries made Direct labor Actual variable overhead $157,700 Rostand employs a standard costing system. During the year, a variable overhead rate of $5.10 per hour was used. The labor standard requires 0.80 hour per delivery. 38,600 31,000 direct labor hours @ $14.00 Required: 1. Compute the standard hours allowed for actual deliveries made last year. direct labor hours 2. Compute the variable overhead spending and efficiency variances. Enter amounts as positive numbers and select Favorable or Unfavorable. Spending variance Efficiency variance Favorable Unfavorable

Variable Overhead Variances, Service Company Rostand Inc. operates a delivery service for over 70 restaurants. The corporation has a fleet of vehicles and has invested in a sophisticated, computerized communications system to coordinate its deliveries. Rostand has gathered the following actual data on last year's delivery operations: Deliveries made Direct labor Actual variable overhead $157,700 Rostand employs a standard costing system. During the year, a variable overhead rate of $5.10 per hour was used. The labor standard requires 0.80 hour per delivery. 38,600 31,000 direct labor hours @ $14.00 Required: 1. Compute the standard hours allowed for actual deliveries made last year. direct labor hours 2. Compute the variable overhead spending and efficiency variances. Enter amounts as positive numbers and select Favorable or Unfavorable. Spending variance Efficiency variance Favorable Unfavorable

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Description: Please do not give solution in image format thanku Variable Overhead Variances, Service CompanyRostand Inc. operates a delivery service for over 70 restaurants. The corporation has a fleet of vehicles and has invested in a sophisticated, computerized

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter10: Standard Costing And Variance Analysis

Section: Chapter Questions

Problem 56E: Use the following information for Exercises 10-56 and 10-57: Rostand Inc. operates a delivery...

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Flaherty, Inc., has just completed its first year of operations. The unit costs on a normal costing basis are as follows: During the year, the company had the following activity: Actual fixed overhead was 12,000 less than budgeted fixed overhead. Budgeted variable overhead was 5,000 less than the actual variable overhead. The company used an expected actual activity level of 12,000 direct labor hours to compute the predetermined overhead rates. Any overhead variances are closed to Cost of Goods Sold. Required: 1. Compute the unit cost using (a) absorption costing and (b) variable costing. 2. Prepare an absorption-costing income statement. 3. Prepare a variable-costing income statement. 4. Reconcile the difference between the two income statements.
Firenza Company manufactures specialty tools to customer order. Budgeted overhead for the coming year is: Previously, Sanjay Bhatt, Firenza Companys controller, had applied overhead on the basis of machine hours. Expected machine hours for the coming year are 50,000. Sanjay has been reading about activity-based costing, and he wonders whether or not it might offer some advantages to his company. He decided that appropriate drivers for overhead activities are purchase orders for purchasing, number of setups for setup cost, engineering hours for engineering cost, and machine hours for other. Budgeted amounts for these drivers are 5,000 purchase orders, 500 setups, and 2,500 engineering hours. Sanjay has been asked to prepare bids for two jobs with the following information: The typical bid price includes a 40 percent markup over full manufacturing cost. Required: 1. Calculate a plantwide rate for Firenza Company based on machine hours. What is the bid price of each job using this rate? 2. Calculate activity rates for the four overhead activities. What is the bid price of each job using these rates? 3. Which bids are more accurate? Why?
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Rostand Inc. operates a delivery service for over 70 restaurants. The corporation has a fleetof vehicles and has invested in a sophisticated, computerized communications system tocoordinate its deliveries. Rostand has gathered the following actual data on last year’s delivery operations:Deliveries made 38,600Direct labor 31,000 direct labor hours @ $14.00Actual variable overhead $157,700Rostand employs a standard costing system. During the year, a variable overhead rate of$5.10 per hour was used. The labor standard requires 0.80 hour per delivery Refer to the information for Rostand Inc. above.Required:1. Compute the standard hours allowed for actual deliveries made last year.2. Compute the variable overhead spending and efficiency variances.
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Multiple Versus Single Overhead Rates, Activity Drivers Deoro Company has identified the following overhead activities, costs, and activity drivers for the coming year: Activity Expected Cost Activity Driver Activity Capacity Setting up equipment $481,440 Number of setups 590 Ordering costs 400,400 Number of orders 18,200 Machine costs 890,400 Machine hours 42,400 Receiving 468,000 Receiving hours 10,400 Deoro produces two models of dishwashers with the following expected prime costs and activity demands: Model A Model B Direct materials $590,000 $845,000 Direct labor $495,000 $474,000 Units completed 16,600 8,100 Direct labor hours 5,400 1,600 Number of setups 440 150 Number of orders 5,300 12,900 Machine hours 24,800 17,600 Receiving hours 3,100 7,300 The company's normal activity is 7,000 direct labor hours. Required: 1. Determine the unit cost for each model using direct labor hours to apply overhead. Round intermediate calculations and final…
Multiple Versus Single Overhead Rates, Activity Drivers Deoro Company has identified the following overhead activities, costs, and activity drivers for the coming year: Activity Expected Cost Activity Driver Activity Capacity Setting up equipment $480,000 Number of setups 600 Ordering costs 360,000 Number of orders 18,000 Machine costs 840,000 Machine hours 42,000 Receiving 400,000 Receiving hours 10,000 Deoro produces two models of dishwashers with the following expected prime costs and activity demands: Model A Model B Direct materials $600,000 $800,000 Direct labor $480,000 $480,000 Units completed 16,000 8,000 Direct labor hours 6,000 2,000 Number of setups 400 200 Number of orders 6,000 12,000 Machine hours 24,000 18,000 Receiving hours 3,000 7,000 The company's normal activity is 8,000 direct labor hours.…
Multiple Versus Single Overhead Rates, Activity Drivers Deoro Company has identified the following overhead activities, costs, and activity drivers for the coming year: Activity Expected Cost Activity Driver Activity Capacity Setting up equipment $480,000 Number of setups 600 Ordering costs 360,000 Number of orders 18,000 Machine costs 840,000 Machine hours 42,000 Receiving 400,000 Receiving hours 10,000 Deoro produces two models of dishwashers with the following expected prime costs and activity demands: Model A Model B Direct materials $600,000 $800,000 Direct labor $480,000 $480,000 Units completed 16,000 8,000 Direct labor hours 6,000 2,000 Number of setups 400 200 Number of orders 6,000 12,000 Machine hours 24,000 18,000 Receiving hours 3,000 7,000 The company's normal activity is 8,000 direct labor hours.…
Multiple Versus Single Overhead Rates, Activity Drivers Deoro Company has identified the following overhead activities, costs, and activity drivers for the coming year: Activity Expected Cost Activity Driver Activity Capacity Setting up equipment $481,900 Number of setups 610 Ordering costs 457,700 Number of orders 19,900 Machine costs 702,100 Machine hours 41,300 Receiving 445,500 Receiving hours 9,900 Deoro produces two models of dishwashers with the following expected prime costs and activity demands: Model A Model B Direct materials $560,000 $781,000 Direct labor 490,000 481,000 Units completed 16,400 7,700 Direct labor hours 5,400 2,000 Number of setups 370 240 Number of orders 7,000 12,900 Machine hours 23,900 17,400 Receiving hours 3,100 6,800 The company's normal activity is 7,400 direct labor hours. Required: 1. Determine the unit cost for each model using direct labor hours to apply overhead. Round intermediate calculations and final…
Multiple Versus Single Overhead Rates, Activity Drivers Deoro Company has identified the following overhead activities, costs, and activity drivers for the coming year: Activity Expected Cost Activity Driver Activity Capacity Setting up equipment $465,740 Number of setups 580 Ordering costs 311,100 Number of orders 18,300 Machine costs 975,200 Machine hours 42,400 Receiving 377,200 Receiving hours 9,200 Deoro produces two models of dishwashers with the following expected prime costs and activity demands: Model A Model B Direct materials $618,000 $790,000 Direct labor 467,000 480,000 Units completed 16,100 7,600 Direct labor hours 5,600 1,900 Number of setups 380 200 Number of orders 6,200 12,100 Machine hours 24,200 18,200 Receiving hours 2,300 6,900 The company's normal activity is 7,500 direct labor hours. Required: 1. Determine the unit cost for each model using direct labor hours to apply overhead. Round intermediate calculations and final…