Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN: 9781305970663
Author: Don R. Hansen, Maryanne M. Mowen
Publisher: Cengage Learning
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- answer the highlighted questionarrow_forward"Wonderful! Not only did our salespeople do a good job in meeting the sales budget this year, but our production people did a good job in controlling costs as well," said Kim Clark, president of Martell Company. "Our $34,400 overall manufacturing cost variance is only 1.0% of the $3,440,000 standard cost of products made during the year. That's well within the 3% parameter set by management for acceptable variances. It looks like everyone will be in line for a bonus this year." The company produces and sells a single product with a standard cost card as follows: Inputs Direct materials Direct labor Variable overhead Fixed overhead Total standard cost per unit (1) Standard Quantity or Hours 4.50 feet 1.7 hours 1.7 hours 1.7 hours (2) Standard Price Standard Cost or Rate $ 3.80 per foot $ 11 per hour $ 2.50 per hour $ 5.50 per hour (1) x (2) $ 17.10 18.70 4.25 9.35 $ 49.40 The following additional information is available for the year just completed: a. The company manufactured 15,000…arrow_forward(18 pts) 2. Wonderful! Not only did our salespeople do a good job in meeting the sales budget this year, but our production people did a good job in controlling costs as well, “ said Kim Clark, president of Martell Company. “ Our $18,000 overall manufacturing cost variance is only 1.5 % of the standard $1,200,000 standard cost of products sold during the year. That’s well within the 3 % parameter set by management for acceptable variances. It looks like everyone will be in line for a bonus this year.” The company produces and sells a single product. A standard cost card for the product follows: Standard Cost Card - Per Unit of Product Direct materials, 2 feet at $8.45 ……………… $16.90 Direct labor, 1.4 hours at $8 ………………… 11.20 Variable overhead, 1.4 hours at $2.50 ……….. 3.50 Fixed overhead, 1.4 hours at $6 ……………… 8.40 Standard cost per unit………………… $ 40.00…arrow_forward
- The manager of Bonita, Inc. reviewed the year just completed, hoping to establish a point of comparison for measuring the company’s actual performance. Sales volume came in lower than expected, at 4,900 units, compared with budgeted sales of 5,400 units. Bonita’s budgeted DM, DL, and variable-MOH costs added up to $22 per unit with an expected selling price of $52 per unit. Budgeted fixed costs totaled $137,100. There were no variable SG&A costs.arrow_forwardThe manager of Bonita, Inc. reviewed the year just completed, hoping to establish a point of comparison for measuring the company’s actual performance. Sales volume came in lower than expected, at 4,900 units, compared with budgeted sales of 5,400 units. Bonita’s budgeted DM, DL, and variable-MOH costs added up to $22 per unit with an expected selling price of $52 per unit. Budgeted fixed costs totaled $137,100. There were no variable SG&A costs.arrow_forwardBerwin Inc. is a small industrial equipment manufacturer with approximately $3.5 million in annual sales.Berwin can always compete with other small appliance manufacturers. However, the market expandsonly when there is product innovation. The following is information on Berwin Inc's performance report:Required : Compute and analyze if the variance is favorable or unfavorable! Identify the strengths and weaknesses of the performance report and give your explanation! How should the report be revised to eliminate these weaknesses? Please explain!arrow_forward
- Suppose PLF actually produces 300,000 bulbs. Calculate the production-volume variance using each level of capacity to compute the fixed manufacturing overhead allocation rate.arrow_forwardMarathon Sports Equipment Company projected sales of 79,000 units at a unit sales price of $12 for the year. Actual sales for the year were 74,000 units at $14 per unit. Variable costs were budgeted at $3 per unit, and the actual amount was $6 per unit. Budgeted fixed costs totaled $377,000, while actual fixed costs amounted to $415,000. What is the sales volume variance for total revenue? ..... O A. $88,000 favorable O B. $60,000 favorable O C. $60,000 unfavorable O D. $88,000 unfavorablearrow_forwardBugesera PLC reported $111,000 of income for the year by using variable costing. The company had no beginning inventory, planned and actual production of 50,000 units, and sales of 47,000 units. Standard variable manufacturing costs were $15 per unit, and total budgeted fixed manufacturing overhead was $75,000. If there were no variances, what would be the income under absorption costing?arrow_forward
- Gadubhaiarrow_forwardTop managers of Ekblad Industries predicted the following year’s sales of 150,000 units of its product at a unit price of $9.00. Actual sales for the year were 144,000 units at $11.60 each. Variable expenses were budgeted at $2.50 per unit, and actual variable expenses were $2.80 per unit. Actual fixed expenses of $430,000 exceeded budgeted fixed expenses by $27,500. Prepare a report showing actual results, a static budget and a flexible budget. Explain the significance of a flexible budget versus a static budget.arrow_forwardCan you please give me correct answer the general accounting question?arrow_forward
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