Managerial Accounting: Tools for Business Decision Making
7th Edition
ISBN: 9781118334331
Author: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
Publisher: WILEY
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Chapter 10, Problem 8Q
A static
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The following data relate to direct labor costs for the current period:
Standard costs
7,500 hours at $11.70
Actual costs
6,000 hours at $12.00
What is the direct labor time variance?
a. $18,000 favorable
b. $17,550 unfavorable
c. $17,550 favorable
d. $18,000 unfavorable
Which of the following is not a factory overhead allocation method?
a. factory costing
b. multiple departmental rates
c. activity-based costing
d. single plantwide rate
The following financial information was summarized from the accounting records of Train Corporation for the current year ended December 31:
Rails
Division
Locomotive
Division
Corporate
Total
Cost of goods sold
$ 47,200
$30,720
Direct operating expenses
27,200
20,040
Sales
108,000
78,000
Interest expense
$ 2,040
General overhead
18,160
Income tax
4,700
The net…
19.
Using simple regression to estimate factory overhead, an internal auditor finds that the line of best fit intersects at the y-axis at $5,000 for overhead allocation. The slope of the line is 0.30. The dependent variable, represented by factory wages, amounts to $900,000 for the month. What is the estimated amount of factory overhead to be allocated for the month?
Multiple Choice
a)$905,000
b)some other answer
c)$5,000
d)$275,000
e)$180,000
At 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.P1.225
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...
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- The Macon Company uses the high-low method to determine its cost equation. The following information was gathered for the past year: Machine Hours Direct Labor Costs Busiest month (June) 17,500 $ 229,022 Slowest month (December) 10,200 $ 155,000 If Macon expects to use 13,500 machine hours next month, what are the estimated direct labor costs?arrow_forwardReddy Corporation has collected the following data for the month of June: Actual total factory overhead incurred $61,200 Budgeted fixed factory overhead costs $42,280 Activity level, in direct labor hours 15,100 Actual direct labor hours 18,200 Standard hours for output this period 16,900 Total factory overhead rate $4.40 What is the variable overhead efficiency variance? Enter the amount as positive number. Variable overhead efficiency variance $fill in the blank 1arrow_forwardA company absorb overheads based on output levels. During the period the company over-absorbed overheads by GH¢6000 based on 5000 budgeted units. The actual overhead cost for the period is GH¢34000. The company estimates that the total of direct material and direct labour cot for producing a unit of the product is GH¢50. Which of the following statement is correct?A. The gross profit will fall as a result of the over-absorption since the prime cost will increaseB. Cost of sales increase hence reducing the net profitC. The over-absorbed overhead of GH¢6000 will increase the net profitD. Cannot be determined without further detailsarrow_forward
- The controller of ABC Company that produces face masks has requested a quick estimate of the manufacturing supplies needed for its plant for the month of April. When production is expected to be at 470,000 units. Their high-low method used in estimating manufacturing supplies determined that fixed costs part of expenses is P70,560 and the variable cost per unit is P1.45 per unit. How much is the estimated manufacturing supplies for April? P 652,500 P 681,500 P 749,180 P 752,060arrow_forwardThe controller of ABC Company that produces face masks has requested a quick estimate of the manufacturing supplies needed for its plant for the month of April. When production is expected to be at 470,000 units. Their high-low method used in estimating manufacturing supplies determined that fixed costs part of expenses is P70,560 and the variable cost per unit is P1.45 per unit. How much is the estimated manufacturing supplies for April? P 652,500 P 681,500 P 749,180 P 752,060 Group of answer choices 1 2 3 4arrow_forwardFor a simple regression analysis model that is used to allocate factory overhead, an internal auditor finds that the intersection of the line of best fit for the overhead allocation with the y-axis is $14,000. The slope of the line is 0.2. The independent variable, factory wages, amounts to $810,000 for the month. What is the estimated amount of factory overhead to be allocated for the month? Multiple Choice $289,400. $162.000. $68,000. $88,000.arrow_forward
- Using simple regression to estimate factory overhead, an internal auditor finds that the line of best fit intersects at the y-axis at $5,000 for overhead allocation. The slope of the line is 0.30. The dependent variable, represented by factory wages, amounts to $900,000 for the month. What is the estimated amount of factory overhead to be allocated for the month? Multiple Choice $180,000 $5,000 $905,000 $275,000 some other answerarrow_forwardThe following data relate to direct labor costs for the current month : Standard Costs : 7,500 hours @ $ 11.50 per hour Actual Costs : 6,000 hours @ $ 12.00 per hour What is the direct labor efficiency ( time ) variance ? $17,250 favorable $3,000 unfavorable $18,000 favorable None of the listed choices are correct $3,750 unfavorablearrow_forwardTrue 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_forward
- A company absorb overheads based on output levels. During the period the company over-absorbed overheads by ghc6000 based on 5000 budgeted units. The actual overhead cost for the period is ghc34000. The company estimates that the total of direct material and direct labour cot for producing a unit of the product is ghc50 and expects a margin of 20%. What is the selling price per unit? A. Ghc71.5 B. Ghc72.5 C. Ghc73.5 D. Ghc74.5arrow_forwardManufacturer estimates that it will incur variable indirect costs for the month of October of $70,000 and $30,000 of fixed costs. The company uses direct labor hours to calculate the predetermined overhead rate and predicted that 3,000 direct labor hours would be used in October. Actual direct labor hours amounted to 3,200. 1) What is the allocation rate per direct labor hour for October? 2) What is the total cost allocation for October?arrow_forwardAn 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_forward
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