Managerial Accounting: Tools for Business Decision Making
7th Edition
ISBN: 9781118334331
Author: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
Publisher: WILEY
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Textbook Question
Chapter 10, Problem 7Q
The static manufacturing
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Reton Company is reviewing the results of itts production during tthe most recent fiscal year. Due to seasonality of the business, the volume of production fluctuates during the year. Renton would like to analyze the fixed and variable costs for purposes of estimating the budget for the upcoming fiscal year. The cost accountant provided the following data:Â
Â
Â
UNITS PRODUCED
TOTAL COST
January
1,100
₱12,530
February
1,200
13,260
March
1,400
14,720
April
1,500
15,450
May
1,800
17,640
June
2,100
19,830
July
2,000
19,100
August
1,900
18,370
September
1,400
14,720
October
1,500
15,450
November
1,300
13,990
December
1,700
16,910
TOTAL
18,900
191,970
Â
Required: Calculate the variable cost per unit and the total fixed cost using the following:
Average method (compare the two lowest quarters)
Graphical method
Method of least squares
Reton Company is reviewing the results of itts production during tthe most recent fiscal year. Due to seasonality of the business, the volume of production fluctuates during the year. Renton would like to analyze the fixed and variable costs for purposes of estimating the budget for the upcoming fiscal year. The cost accountant provided the following data:
Â
UNITS PRODUCED
TOTAL COST
January
1,100
₱12,530
February
1,200
13,260
March
1,400
14,720
April
1,500
15,450
May
1,800
17,640
June
2,100
19,830
July
2,000
19,100
August
1,900
18,370
September
1,400
14,720
October
1,500
15,450
November
1,300
13,990
December
1,700
16,910
TOTAL
18,900
191,970
Â
Â
Â
Â
Calculate the variable cost per unit and the total fixed cost using the Graphical method.
Reton Company is reviewing the results of itts production during tthe most recent fiscal year. Due to seasonality of the business, the volume of production fluctuates during the year. Renton would like to analyze the fixed and variable costs for purposes of estimating the budget for the upcoming fiscal year. The cost accountant provided the following data:
Â
UNITS PRODUCED
TOTAL COST
January
1,100
₱12,530
February
1,200
13,260
March
1,400
14,720
April
1,500
15,450
May
1,800
17,640
June
2,100
19,830
July
2,000
19,100
August
1,900
18,370
September
1,400
14,720
October
1,500
15,450
November
1,300
13,990
December
1,700
16,910
TOTAL
18,900
191,970
Â
Â
Â
Â
Calculate the variable cost per unit and the total fixed cost using the Average method (compare the two lowest quarters).
Chapter 10 Solutions
Managerial Accounting: Tools for Business Decision Making
Ch. 10 - Prob. 1QCh. 10 - The following purposes are part of a budgetary...Ch. 10 - How may a budget report for the second quarter...Ch. 10 - Ken Bay questions the usefulness of a master sales...Ch. 10 - Under what circumstances may a static budget be an...Ch. 10 - A flexible budget is really a series of static...Ch. 10 - The static manufacturing overhead budget based on...Ch. 10 - A static overhead budget based on 40,000 direct...Ch. 10 - Megan Pedigo is confused about how a flexible...Ch. 10 - Call Company has prepared a graph of flexible...
Ch. 10 - The flexible budget formula is fixed costs 50,000...Ch. 10 - What is management by exception? What criteria may...Ch. 10 - What is responsibility accounting? Explain the...Ch. 10 - Prob. 14QCh. 10 - Distinguish between controllable and...Ch. 10 - How do responsibility reports differ from budget...Ch. 10 - Prob. 17QCh. 10 - Distinguish among the three types of...Ch. 10 - Prob. 19QCh. 10 - Prob. 20QCh. 10 - Prob. 21QCh. 10 - Prob. 22QCh. 10 - Prob. 23QCh. 10 - Prob. 24QCh. 10 - Prob. 25QCh. 10 - Prob. 26QCh. 10 - For the quarter ended March 31, 2017, Croix...Ch. 10 - Data for Croix Company are given in BE10-1. In the...Ch. 10 - In Rooney Company, direct labor is 20 per hour....Ch. 10 - Gundy Company expects to produce 1,200,000 units...Ch. 10 - Data for Gundy Company are given in BE10-4. In...Ch. 10 - In the Assembly Department of Hannon Company,...Ch. 10 - Torres Company accumulates the following summary...Ch. 10 - For the year ending December 31, 2017, Cobb...Ch. 10 - Prob. 10.9BECh. 10 - Prob. 10.10BECh. 10 - Prob. 10.11BECh. 10 - Prob. 10.12BECh. 10 - Wade Company estimates that it will produce 6,000...Ch. 10 - In Pargo Company's flexible budget graph, the...Ch. 10 - Prob. 10.3DICh. 10 - Prob. 10.4DICh. 10 - Connie Rice has prepared the following list of...Ch. 10 - Crede Company budgeted selling expenses of 30,000...Ch. 10 - Myers Company uses a flexible budget for...Ch. 10 - Using the information in E10-3. assume that in...Ch. 10 - Fallon Company uses flexible budgets to control...Ch. 10 - The actual selling expenses incurred in March 2017...Ch. 10 - Appliance Possible Inc. (AP) is a manufacturer of...Ch. 10 - Rensing Groomers is in the dog-grooming business....Ch. 10 - As sales manager, Joe Batista was given the...Ch. 10 - Chubbs Inc.'s manufacturing overhead budget for...Ch. 10 - UrLink Company is a newly formed company...Ch. 10 - Venetian Company has two production departments....Ch. 10 - Fey Company's Organization chart includes the...Ch. 10 - The Mixing Department manager of Malone Company is...Ch. 10 - Horatio Inc. has three divisions which are...Ch. 10 - The Sports Equipment Division of Harrington...Ch. 10 - The South Division of Wiig Company reported the...Ch. 10 - The Dinkle and Frizell Denial Clinic provides both...Ch. 10 - The Ferrell Transportation Company uses a...Ch. 10 - Presented below is selected information for three...Ch. 10 - Presenled below is selected financial information...Ch. 10 - Bumblebee Company estimates that 300,000 direct...Ch. 10 - Zelmer Company manufactures tablecloths. Sales...Ch. 10 - Ratchet Company uses budgets in controlling costs....Ch. 10 - Clarke Inc. operates the Patio Furniture Division...Ch. 10 - Optimus Company manufactures a variety of tools...Ch. 10 - Durham Company uses a responsibility reporting...Ch. 10 - Sentinel Industries has manufactured prefabricated...Ch. 10 - CURRENT DESIGNS The Current Designs staff has...Ch. 10 - Green Pastures is a 400-acre farm on the outskirts...Ch. 10 - Prob. 10.2BYPCh. 10 - Prob. 10.3BYPCh. 10 - The manufacturing overhead budget for Fleming...Ch. 10 - Ethics Case American Products Corporation...Ch. 10 - Considering Your Costs and Benefits Preparing a...
Additional Business Textbook Solutions
Find more solutions based on key concepts
Basic accounting equation (Learning Objective 5) 10-15 min. Hanson Corp. ? 44,900 + 10,300 Tiny Tots Daycare In...
Financial Accounting, Student Value Edition (5th Edition)
E9-15 Identifying and correcting internal control weakness
Learning Objective 1
Suppose The Right Rig Dealers...
Horngren's Accounting (12th Edition)
Discussion Analysis A13-41 Discussion Questions 1. How do managers use the statement of cash flows? 2. Describ...
Managerial Accounting (4th Edition)
Plant-wide, department, and ABC Indirect cost rates. Roadster Company (RC) designs and produces automotive part...
Horngren's Cost Accounting: A Managerial Emphasis (16th Edition)
1.Which account does a merchandiser use that a service company does not use?
Learning Objective 1
cost of G...
Horngren's Accounting (11th Edition)
LIFO, Conversion to FIFO. Inventory transactions tor Jack Franklin stores are summarized in the following table...
Intermediate Accounting (2nd Edition)
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
- Using High-Low to Calculate Predicted Total Variable Cost and Total Cost for Budgeted Output Refer to the information for Pizza Vesuvio on the previous page. Assume that this information was used to construct the following formula for monthly labor cost. TotalLaborCost=5,237+(7.40EmployeeHours) Required: Assume that 675 employee hours are budgeted for the month of September. Use the total labor cost formula for the following calculations: 1. Calculate total variable labor cost for September. 2. Calculate total labor cost for September.arrow_forwardRenton company is reviewing the results of its production during the most recent fiscal year. Due to seasonality of the bussiness, the volume of production flactuates during the year. Renton would like to analyze the fixed and variable costs for purposes of estimating the budget for upcoming fiscal year. The cost accountant provided the following data:  Units produce total costs January 1,100 12,530 February 1,200 13,260 March 1,400 14,720 April 1,500 15,450 May 1,800 17,640 June 2,100 19,830 July 2,000 19,100 August 1,900 18,370 September 1,400 14,720 October 1,500 15,450 November 1,300 13,990 December 1,700 16,910 Total 18,900 191,170 Required: Calculate the variable cost per unit and the total fixed cost using the following: a. High and low point method b. Average method (compare the two lowest quarters) c. Graphical method d. Method of least squaresarrow_forwardReton Company is reviewing the results of itts production during tthe most recent fiscal year. Due to seasonality of the business, the volume of production fluctuates during the year. Renton would like to analyze the fixed and variable costs for purposes of estimating the budget for the upcoming fiscal year. The cost accountant provided the following data:   UNITS PRODUCED TOTAL COST January 1,100 ₱12,530 February 1,200 13,260 March 1,400 14,720 April 1,500 15,450 May 1,800 17,640 June 2,100 19,830 July 2,000 19,100 August 1,900 18,370 September 1,400 14,720 October 1,500 15,450 November 1,300 13,990 December 1,700 16,910 TOTAL 18,900 191,970  Required: Calculate the variable cost per unit and the total fixed cost using the following: High-low point method Average method (compare the two lowest quarters) Graphical method Method of least squaresarrow_forward
- An overhead cost budget for the next month is being prepared by Ebony Supply Company. Past studies indicate that costs have followed behavior patterns as follows: Variable Cost per Direct Labor Hour Indirect materials and supplies P 0.77 Heat, light and power 1.50 Repairs and maintenance 5.00 Lubricants 0.65 In addition, management estimated the total fixed factory overhead at P.248,000, based on a normal capacity of 80,000 direct labor hours. Required: How much is the total factory overhead rate per hour to bel charged (applied) to production? b. If the company plans to manufacture 280,000 units of product next year, how much will be the total variable overhead costs, assuming that four units are produced per direct labor hour? Assuming the same data in b, how much will be the total budgeted fixed overhead costs? d. Assuming the same data as in b, how much factory overhead will be charged to Work-in process? e. Assuming further that the total actual factory overhead in d is P800,000,…arrow_forwardAt Overland Company, maintenance cost is exclusively a variable cost that varies directly with machine-hours. The performance report for July showed that actual maintenance costs totaled $9,800 and that the associated rate variance was $200 unfavorable. If 8,000 machine-hours were actually worked during July, the budgeted maintenance cost per machine-hour was:arrow_forwardAt IT Company, maintenance cost is exclusively a variable cost that varies directly with machine-hours. The performance report for July showed that actual maintenance costs totaled P9,800 and that the associated spending variance was P200 unfavorable. If 8,000 machine hours were actually worked during July, the budgeted maintenance cost per machine-hour was:  A.P1.20 B.P1.25 C.P1.275 D.P1.225arrow_forward
- ABC Corporation has prepared the following overhead budget for next month. Activity level Variable overhead costs: Supplies Indirect labor Fixed overhead costs: Supervision Utilities Depreciation Total overhead cost 3,700 machine-hours $ 21,090 35,520 18,100 7,100 8,100 $ 89,910 The company's variable overhead costs are driven by machine-hours. What would be the total budgeted overhead cost for next month if the activity level is 3,600 machine-hours rather than 3,700 machine-hours? (Round your intermediate calculations to 2 decimal places.)arrow_forwardMcdougald Corporation is a service company that measures its output by the number of customers served. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results of operations for March. Variable Element per Customer Served Fixed Element per Actual Total Month for March Revenue $ 6,500 $ 169,700 Employee salaries and wages 2$ 58,400 $ 1,000 $83,200 Travel expenses $ 700 $ 18,600 Other expenses 2$ 41,500 $ 41,900 When the company prepared its planning budget at the beginning of March, it assumed that 21 customers would have been served. However, 26 customers were actually served during March. The spending variance for "Employee salaries and wages" for March would have been closest to: O A. $1,200 U O B. $3,800 U O C.$3,800 F O D. $1,200 Farrow_forwardA management consultancy recovers overheads on the basis of chargeable consulting hours. Budgeted overheads were $615,000 and actual consulting hours were 32,150. Overheads were under-recovered by $35,000. If actual overheads were $694,075, what was the budgeted overhead absorption rate per hour?arrow_forward
- True or False. If the budgeted factory overhead cost is $460,000, the budgeted direct labor hours is 80,000, and the actual direct labor hours is 6,700 for the month, the factory overhead rate for the month is $68.65 (if the allocation is based on direct labor hours).arrow_forwardDelo Accountancy firm had an overhead budget of $51,070 for a period. Actual overheadexpenditure in the period was $52,400. Overheads are absorbed on the basis of clienthours worked which totalled 2,375 in the period and resulted in under-absorption of $657 What was the budgeted overhead absorption rate per client hour? Show solution. answer must be $22.17arrow_forwardRuozzo Corporation is a service company that measures its output by the number of customers served. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results of operations for July.  Fixed Element per Month Variable Element per Customer Served Actual Total for July Revenue    $ 4,500 $ 100,000 Employee salaries and wages $ 43,100  $ 900 $ 63,300 Travel expenses    $ 500 $ 11,500 Other expenses $ 36,900    $ 37,900  When the company prepared its planning budget at the beginning of July, it assumed that 27 customers would have been served. However, 22 customers were actually served during July. The activity variance for net operating income for July would have been closest to: 16,400 F or U, 15,500 F or U.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Managerial Accounting: The Cornerstone of Busines...AccountingISBN:9781337115773Author:Maryanne M. Mowen, Don R. Hansen, Dan L. HeitgerPublisher:Cengage Learning
Cornerstones of Cost Management (Cornerstones Ser...AccountingISBN:9781305970663Author:Don R. Hansen, Maryanne M. MowenPublisher:Cengage Learning
Excel Applications for Accounting PrinciplesAccountingISBN:9781111581565Author:Gaylord N. SmithPublisher:Cengage Learning
Managerial Accounting: The Cornerstone of Busines...
Accounting
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Cengage Learning
Cornerstones of Cost Management (Cornerstones Ser...
Accounting
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Cengage Learning
Excel Applications for Accounting Principles
Accounting
ISBN:9781111581565
Author:Gaylord N. Smith
Publisher:Cengage Learning
What is variance analysis?; Author: Corporate finance institute;https://www.youtube.com/watch?v=SMTa1lZu7Qw;License: Standard YouTube License, CC-BY