Horngren's Accounting (12th Edition)
12th Edition
ISBN: 9780134486444
Author: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura
Publisher: PEARSON
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Textbook Question
Chapter 23, Problem E23.21E
Calculating
Learning Objective 4
1, VOH Cost Var. $1,600 U
Mills, Inc, is a competitor of Murry, Inc, from Exercise E23-18 Mills also uses a
| Static budget variable overhead | $1,200 |
| Static budget fixed overhead | $ 1,600 |
| Static budget direct labor hours | 800 hours |
| Static budget number of units | 400 units |
| Standard direct labor hours | 2 hours per unit |
Mills allocates manufacturing overhead to production based on standard direct labor hours. Mills reported the following actual results for 2018: actual number of units produced, 1,000; actual variable overhead, $4,000; actual fixed overhead, $3,100; actual direct labor hours, 1,600
Requirements
1. Compute the variable overhead cost and efficiency variances and fixed overhead cost and volume variances.
2. Explain why the variances are favorable or unfavorable.
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BUDGETED MANUFACTURING COSTS
DIRECT MATERIAL
$20
PER UNIT
DIRECT LABOR
$2
PER UNIT
VARIABLE OVERHEAD
$10
PER UNIT
FIXED OVERHEAD
$150,000
YEAR 1
NO BEGINNING INVENTORY
ACTUAL COSTS OF PRODUCTION EQUALS ABOVE MANUFACTURING COSTS
PURCHASE DIRECT MATERAILS OF
$200,000
INCUR SELLING AND ADMIN COSTS OF
$80,000
#UNITS PRODUCED
10,000
# UNITS SOLD
9,000
SALES PRICE OF UNITS SOLD
$100
YEAR 2
THERE…
D
F
G
H
1 Function: IF; Formula: Subtract, Multiply; CelI Referencing
3 Using Excel to Determine Overhead Variances
Student Work Area
4
PROBLEM
Required: Provide input into cells shaded in yellow in this template.
Use cell references to the Problem area with mathematical formulas
5 In October, Pine Company was determining its overhead variance. Its
6 predetermined overhead rate is based on direct labor hours. The
7 following information was provided.
in the input cells. In the last input field, input an IF function with cell
references to your work area.
8
$ 118,000
Manufacturing overhead costs incurred
Actual direct labor hours
9
10
11
21.000
Compute the amount of the total overhead variance and designate if
the variance is favorable or unfavorable using Excel's IF function.
Standard hours allowed for work done
20,600
12
Predetermined overhead rate
2$
6.00
13
Actual overhead
14
Overhead applied
15
16
17
18
19
Total overhead variance
Nature of variance
20
21
A manufacturer uses activity-based costing to assign overhead cost to products. Budgeted cost information for its activities follows.
Activity
Purchasing
Factory services
Setup
Budgeted Cost
$ 183,600
102,450
67,450
Activity Cost Driver
Purchase orders.
Square feet
Setups
Compute an activity rate for each activity. (Round your answers to 2 decimal places.)
Budgeted Activity Usage
5,100 purchase orders.
5,600 square feet
50 Setups
Activity
Budgeted Cost
Purchasing
$
183,600
Factory services
$
102,450
Setup
$
67,450
Budgeted Activity Usage
Activity Rate
Chapter 23 Solutions
Horngren's Accounting (12th Edition)
Ch. 23 - Prob. 1QCCh. 23 - MajorNet Systems is a start-up company that makes...Ch. 23 - MajorNet Systems is a start-up company that makes...Ch. 23 - MajorNet Systems is a start-up company that makes...Ch. 23 - MajorNet Systems has budgeted three hours of...Ch. 23 - MajorNet Systems has budgeted three hours of...Ch. 23 - FrontGrade Systems allocates manufacturing...Ch. 23 - FrontGrade Systems allocates manufacturing...Ch. 23 - FrontGrade Systems allocates manufacturing...Ch. 23 - The person probably most responsible for the...
Ch. 23 - HajorNet System’s static budget predicted...Ch. 23 - What is a variance?Ch. 23 - Explain the difference between a favorable and an...Ch. 23 - What is a static budget performance report?Ch. 23 - How do flexible budgets differ from static...Ch. 23 - How is a flexible budget used?Ch. 23 - What are the two components of the static budget...Ch. 23 - What is a flexible budget performance report?Ch. 23 - What is a standard cost system?Ch. 23 - Explain the difference between a cost standard and...Ch. 23 - Give the general formulas for determining cost and...Ch. 23 - How does the static budget affect cost and...Ch. 23 - List the direct materials variances, and briefly...Ch. 23 - List the direct labor variances, and briefly...Ch. 23 - List the variable overhead variances, and briefly...Ch. 23 - List the fixed overhead variances, and briefly...Ch. 23 - How is the fixed overhead volume variance...Ch. 23 - What is management by exception?Ch. 23 - List the eight product variances and the manager...Ch. 23 - Briefly describe how journal entries differ in a...Ch. 23 - What is a standard cost income statement?Ch. 23 - Matching terms Learning Objective 1 Match each...Ch. 23 - Preparing flexible budgets Learning Objective 1...Ch. 23 - Calculating flexible budget variances Learning...Ch. 23 - Matching terms Learning Objective 2 Match each...Ch. 23 - Identifying the benefits of standard costs...Ch. 23 - Calculating materials variances Learning Objective...Ch. 23 - Calculating labor variances Learning Objective 3...Ch. 23 - Interpreting material and labor variances Learning...Ch. 23 - Computing standard overhead allocation rates...Ch. 23 - Computing overhead variances Learning Objective 4...Ch. 23 - Understanding variance relationships Learning...Ch. 23 - Journalizing materials entries Learning Objectives...Ch. 23 - Journalizing labor entries Learning Objectives 6...Ch. 23 - Preparing a standard cost income statement...Ch. 23 - Preparing a flexible budget Learning Objective 1...Ch. 23 - Preparing a flexible budget performance report...Ch. 23 - Preparing a flexible budget performance report...Ch. 23 - Defining the benefits of setting cost standards...Ch. 23 - Calculating materials and labor variances Learning...Ch. 23 - Computing overhead variances Learning Objective 4...Ch. 23 - Calculating overhead variances Learning Objective...Ch. 23 - Preparing a standard cost income statement...Ch. 23 - Preparing journal entries Learning Objective 6 MOH...Ch. 23 - Preparing a standard cost income statement...Ch. 23 - Preparing a flexible budget performance report...Ch. 23 - Preparing a flexible budget computing standard...Ch. 23 - Computing standard cost variances and reporting to...Ch. 23 - Computing and journalizing standard cost variances...Ch. 23 - Prob. P23.29APGACh. 23 - Preparing a flexible budget performance report...Ch. 23 - Preparing a flexible budget and computing standard...Ch. 23 - Prob. P23.32BPGBCh. 23 - Prob. P23.33BPGBCh. 23 - Preparing a standard cost income statement...Ch. 23 - Prob. P23.35CTCh. 23 - Preparing a flexible budget and performance report...Ch. 23 - Prob. 23.1TIATCCh. 23 - Decision Case 23-1 Suppose you manage the local...Ch. 23 - Fraud Case 23-1 Drew Castello, general manager of...
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