Survey Of Accounting
5th Edition
ISBN: 9781259631122
Author: Edmonds, Thomas P.
Publisher: Mcgraw-hill Education,
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Chapter 15, Problem 10E
a.
To determine
Prepare flexible budget for the actual number of production units.
b.
To determine
Analyze the performance of the production manager, JM.
c.
To determine
Explain the reason for not including the revenue and net income while evaluating the performance of JM.
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QUESTION 1
New Norm Fashion produces washable face mask shield. The following budgeted/ actual
information is provided regardingto the production of face mask:
RM/unit
Selling price
50.00
Direct materials
8.00
Direct labour
5.00
Variable production overheads
3.00
Details of its operations for the month of May and June 2021 are as follows:
May
June
Production
500
380
Sales
300
500
Fixed production overheads are budgeted at RM4,000 per month and are absorbed on a unit
basis. The normal level of production is budgeted at 400 units per month.
Other costs:
RM/month
Fixed selling
4,000
Fixed administration
2,000
Variable sales commission
5% of sales revenue
There was no opening inventory of face mask at the beginning of May.
Required:
(a) Prepare income statement for the month of May and June using
(i)
variable costing
(ii)
absorption costing
(b) Prepare a reconciliation of profit or loss figures based on your answers in a(i) and
(c)Describe a situation where net profit under variable…
@
Gusteau's manufactures high-quality boxes of flavored seltzer which it sells for $14 per box.
Below is some information related to Gusteau's capacity and budgeted fixed manufacturing costs for 2019:
Budgeted Fixed Days of Hours of
Denominator-Level
W
Capacity Concept
Theoretical Capacity
Practical Capacity
Normal Capacity
Master Budget Capacity
$10,187,250
$10,194,980
#
3
E
$
Help Center?
Period
4
Manufacturing
Overhead per
$1,750,000
$1,750,000
$1,750,000
$1,750,000
R
Production Production
%
5
per Period
T
362
310
310
310
Production during 2019 was 990,000 boxes of flavored seltzer, with 15,000 remaining in ending inventory at 12/31/19. Assume beginning
inventory is zero.
22
Variable manufacturing costs were $1.78 per unit (there are no variable cost variances).
Actual fixed manufacturing overhead costs were $1,750,000, the same as budgeted. Fixed manufacturing overhead cost variances are written
off to cost of goods sold in the period in which they occur. (Note: Round interim…
QUESTION 8
V Limited operates a standard costing system and a system of budgetary control.
The budgeted information and standard costs for March 2020 were as follows.
Budgeted output 2500 units
Budgeted fixed overheads $48000
Standard cost per unit
Direct materials $24 (3 kilos at $8 each)
Direct labor $64 (4 hours at $16 each)
V Limited uses labor hours to absorb fixed overheads.
The actual results for March 2020 were as follows.
Output 2400 units
Fixed overheads $49800
Direct materials cost $68340
Direct materials usage 8040 kilos
Direct labor costs $156864
Direct labor hours 9120 hours
Required:
(a) (i) Calculate the direct materials price and quantity variance.
(ii) State the 2 reasons for each of the direct materials variance.
(b) 1) Calculate the direct labor rate and efficiency variance.
(ii) State the 2 reasons for each of the direct labor variance.
(c) (i) Calculate the fixed overheads expenditure variance.
(ii) Calculate the fixed overheads volume variance
Chapter 15 Solutions
Survey Of Accounting
Ch. 15 - 1. Pam Kelly says she has no faith in budgets. Her...Ch. 15 - 7. What is a responsibility center?Ch. 15 - Prob. 3QCh. 15 - Prob. 4QCh. 15 - Prob. 5QCh. 15 - 3. When are sales and cost variances favorable and...Ch. 15 - 4. Joan Mason, the marketing manager for a large...Ch. 15 - Prob. 8QCh. 15 - Prob. 9QCh. 15 - Prob. 10Q
Ch. 15 - Prob. 11QCh. 15 - 9. Minnie Divers, the manager of the marketing...Ch. 15 - 6. How do responsibility reports promote the...Ch. 15 - Prob. 14QCh. 15 - Prob. 15QCh. 15 - Prob. 16QCh. 15 - 12. How can a residual income approach to...Ch. 15 - Prob. 18QCh. 15 - Exercise 9-6A Evaluating a profit center Helen...Ch. 15 - Prob. 2ECh. 15 - Prob. 3ECh. 15 - Prob. 4ECh. 15 - Exercise 8-3A Determining amount and type...Ch. 15 - Prob. 6ECh. 15 - Exercise 8-4A Determining sales and variable cost...Ch. 15 - Exercise 8-5A Determining flexible budget...Ch. 15 - Exercise 8-9A Responsibility for the fixed cost...Ch. 15 - Prob. 10ECh. 15 - Exercise 8-7A Evaluating a decision to increase...Ch. 15 - Prob. 12ECh. 15 - Prob. 13ECh. 15 - Exercise 9-9A Residual income Climax Corporation...Ch. 15 - Residual income Gletchen Cough Drops operates two...Ch. 15 - Prob. 16ECh. 15 - Prob. 17ECh. 15 - Prob. 18PCh. 15 - Prob. 19PCh. 15 - Prob. 20PCh. 15 - Prob. 21PCh. 15 - Problem 9-20A Return on investment Sorrento...Ch. 15 - Problem 9-21A Comparing return on investment and...Ch. 15 - Comparing return on investment and residual income...Ch. 15 - ATC 8-1 Business Applications Case Static versus...Ch. 15 - Prob. 2ATCCh. 15 - Prob. 3ATCCh. 15 - ATC 9-1 Business Applications Case Analyzing...Ch. 15 - Prob. 5ATC
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