Managerial Accounting (5th Edition)
5th Edition
ISBN: 9780134128528
Author: Karen W. Braun, Wendy M. Tietz
Publisher: PEARSON
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Textbook Question
Chapter 11, Problem 11.30AE
Data Set for E11-28A through E11-32A
Country Designs is a manufacturer of large flower pots for urban settings. The company has these standards:
Direct materials (resin) | 13 pounds per pot at a cost of $4.00 per pound |
Direct labor | 4.0 hours at a cost of $17.00 per hour |
Standard variable manufacturing |
$7.00 per direct labor hour |
Budgeted fixed manufacturing overhead | $50,000 |
Standard fixed MOH rate | $10.00 per direct labor hour (DLH) |
Country Designs 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 1,300 flower pots:
Direct materials | Purchased 18,510 pounds at a cost of $4.50 per pound; used 17,810 pounds to produce 1,300 pots |
Direct labor | Worked 4.5 hours per flower pot (5,850 total DLH) at a cost of $16.00 per hour |
Actual variable manufacturing overhead | $7.20 per direct labor hour for total actual variable manufacturing overhead of $42,120 |
Actual fixed manufacturing overhead | $49,500 |
Standard fixed manufacturing overhead allocated based on actual production | $52,000 |
E11-30A Calculate and interpret overhead variances (Learning Objectives 5 & 6)
Refer to the Country Designs data set.
Requirements
- 1. Compute the variable manufacturing overhead variances. What do each of these variances tell management?
- 2. Compute the fixed manufacturing overhead variances. What do each of these variances tell management?
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Check out a sample textbook solutionStudents have asked these similar questions
Healthfirst (HF) Ltd has recently started to produce a face shield and product's standard cost data
are as follows:
Cost per unit
Direct materials Perspex (0.5 meters @ $15 per meter)
$ 7.50
Direct materials Hardened Plastic (0.25 meters at $20.00 per meter) 5.00
Direct manufacturing labour (0.5 hr @ $30.00 per hr)
Manufacturing overhead
Total Cost
15.00
Required
Should HF accept the offer. Show all computations.
30.00
$57.50
Additional information
45% of the Manufacturing overhead changes with the number of units produced. Additionally, if
production of face shields is discontinued, 20% of the remaining fixed cost will be avoided. The
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space used to manufacture face shields can be used to Generate $ 120,000 in contribution margin
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Approximately Relevant
Silven Company has identified the following overhead activities, costs, and activity drivers for the coming year:
Activity
Expected Cost
Setting up equipment
$138,000
Ordering materials
10,200
Machining
92,400
Receiving
18,480
Silven produces two models of cell phones with the following expected activity demands:
Model X
Model Y
5,000
80
200
Units completed
Number of setups
Number of orders
Machine hours
Receiving hours
Required:
6,600
385
Activity Driver Activity Capacity
Number of setups
Number of orders
Machine hours
Receiving hours
10,000
40
400
4,950
770
120
600
11,550
1,155
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.…
Chapter 11 Solutions
Managerial Accounting (5th Edition)
Ch. 11 - (Learning Objective 1) Which of the following is...Ch. 11 - (Learning Objective 2) The direct material price...Ch. 11 - Prob. 3QCCh. 11 - Prob. 4QCCh. 11 - Prob. 5QCCh. 11 - (Learning Objective 4) Which of the following is...Ch. 11 - Prob. 7QCCh. 11 - (Learning Objective 6) Which of the following is...Ch. 11 - Prob. 9QCCh. 11 - (Learning Objective 7Appendix) Which of the...
Ch. 11 - Compute the standard cost of direct materials...Ch. 11 - Compute the standard cost of direct labor...Ch. 11 - Explain a direct material variance (Learning...Ch. 11 - Prob. 11.4SECh. 11 - Calculate direct material variances when the...Ch. 11 - Calculate direct labor variances (Learning...Ch. 11 - Prob. 11.7SECh. 11 - Prob. 11.8SECh. 11 - Calculate fixed overhead variances (Learning...Ch. 11 - Calculate and interpret fixed overhead variances...Ch. 11 - Prob. 11.11SECh. 11 - Calculate and interpret overhead variances...Ch. 11 - Record costing transactions (Learning Objective 7)...Ch. 11 - Record standard costing transactions (Learning...Ch. 11 - Identify ethical standards violated (Learning...Ch. 11 - Vocabulary (Learning Objectives 1, 2, 3, 4, 5, 6)...Ch. 11 - Calculate standard cost and gross profit per unit...Ch. 11 - Calculate standard cost per unit (Learning...Ch. 11 - Calculate and explain direct material variances...Ch. 11 - Calculate missing direct material variables...Ch. 11 - Calculate and explain direct labor variances...Ch. 11 - Calculate and interpret direct material and direct...Ch. 11 - Calculate the material and labor variances...Ch. 11 - Record materials and labor transactions (Learning...Ch. 11 - Calculate the standard cost of a product before...Ch. 11 - Recognize advantages and disadvantages of standard...Ch. 11 - Compute and interpret overhead variances (Learning...Ch. 11 - Data Set for E11-28A through E11-32A Country...Ch. 11 - Data Set for E11-28A through E11-32A Country...Ch. 11 - Data Set for E11-28A through E11-32A Country...Ch. 11 - Make journal entries in a standard costing system...Ch. 11 - Prepare a standard cost income statement (Learning...Ch. 11 - Calculate standard cost and gross profit per unit...Ch. 11 - Calculate the standard cost per unit (Learning...Ch. 11 - Calculate and explain direct material variances...Ch. 11 - Calculate missing direct material variables...Ch. 11 - Calculate and explain direct labor variances...Ch. 11 - Prob. 11.38BECh. 11 - Prob. 11.39BECh. 11 - Prob. 11.40BECh. 11 - Prob. 11.41BECh. 11 - Recognize advantages and disadvantages of standard...Ch. 11 - Calculate and interpret overhead variances...Ch. 11 - Prob. 11.44BECh. 11 - Prob. 11.45BECh. 11 - Prob. 11.46BECh. 11 - Prob. 11.47BECh. 11 - Prob. 11.48BECh. 11 - Prob. 11.49APCh. 11 - Comprehensive standards and variances problem...Ch. 11 - Comprehensive standards and variances problem...Ch. 11 - Prob. 11.52APCh. 11 - Prob. 11.53APCh. 11 - Prob. 11.54BPCh. 11 - Comprehensive standards and variances problem...Ch. 11 - Comprehensive standards and variances problem...Ch. 11 - Work backward through labor variances (Learning...Ch. 11 - Determine all variances and make journal entries...Ch. 11 - Calculate labor variances in a hotel (Learning...
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