Question
In: Accounting
Barry Company budgeted the cost of materials for August to be $60,000 for 10,000 units produced....
Barry Company budgeted the cost of materials for August to be $60,000 for 10,000 units produced. Barry used the following standard cost per unit to prepare the August budget:
2 ounces of materials at $3.00 per ounce
In August, Barry produced 8,000 units at a total cost of $49,280. Each unit required 2.2 ounces of materials. What is the materials usage variance for August?
| A. |
$4,800 U |
|
| B. |
$7,200 U |
|
| C. |
$1,280 U |
|
| D. |
$3,520 U |
|
| E. |
$10,720 U |
Solutions
Expert Solution
Answer: A
Standard usage = Actual units of production × Standard materials per unit
= 8000 × 2
= 16000 ounces
Actual usage = Actual units of production × Actual materials per unit
= 8000 × 2.2
= 17600 ounces
Usage variance = (Standard usage – Actual usage) × Standard price
= (16000 – 17600) × $3
= 1600 × 3
= 4,800 unfavorable
Note: Since actual usage is higher than standard usage, there is unfavorable variance.
ekkarill92 answered 1 year agoRelated Solutions
Company budgeted sales in units for the next four months as follows: July 7,000 units August...
Company budgeted sales in units for the next four months as
follows:
July
7,000 units
August
5,000 units
September
6,500 units
1. Prepare the sales budget for the
company knowing that each unit is sold for $50. (1 pt)
2. Past experience has shown that the
ending inventory for each month should be equal to 20% of the next
month's sales in units. The inventory in the beginning of July was
only 1,000 units, & the inventory on September 30...
Variances Original Budget Actual Flexible Budget Units Produced (in units) 10,000 12,000 ? Materials used (kg)...
Variances
Original Budget
Actual
Flexible Budget
Units Produced (in units)
10,000
12,000
?
Materials used (kg)
400
700
?
Material cost ($)
8,000
See purchases
?
Direct Labour (hours)
35,000
46,102
?
Direct Labour ($)
385,000
507,080
?
Variable Overhead ($)
350,000
419,161
?
Fixed Overhead ($)
160,000
161,000
?
Other Information
Overhead is Allocated on Direct Labour Hours
During the year, 800 kg of materials were purchased for
$5,000
Beginning Inventory: none
Ending Inventory: 100kg
Required:
Calculate the...
Original Budget Actual Flexible Budget Units Produced (in units) 10,000 12,000 ? Materials used (kg) 400...
Original Budget
Actual
Flexible Budget
Units Produced (in units)
10,000
12,000
?
Materials used (kg)
400
700
?
Material cost ($)
8,000
See purchases
?
Direct Labour (hours)
35,000
46,102
?
Direct Labour ($)
385,000
507,080
?
Variable Overhead ($)
350,000
419,161
?
Fixed Overhead ($)
160,000
161,000
?
Other Information
Overhead is Allocated on Direct Labour Hours
During the year, 800 kg of materials were purchased for
$5,000
Beginning Inventory: none
Ending Inventory: 100kg
Required:
Calculate the flexible...
Original Budget Actual Flexible Budget Units Produced (in units) 10,000 12,000 ? Materials used (kg) 400...
Original Budget
Actual
Flexible Budget
Units Produced (in units)
10,000
12,000
?
Materials used (kg)
400
700
?
Material cost ($)
8,000
See purchases
?
Direct Labour (hours)
35,000
46,102
?
Direct Labour ($)
385,000
507,080
?
Variable Overhead ($)
350,000
419,161
?
Fixed Overhead ($)
160,000
161,000
?
Other Information
Overhead is Allocated on Direct Labour Hours
During the year, 800 kg of materials were purchased for
$5,000
Beginning Inventory: none
Ending Inventory: 100kg
Required:
Calculate the flexible...
• Beginning cash balance for August is $500,000 • The company budgeted sales at 550,000 units...
• Beginning cash balance for August is $500,000 • The company
budgeted sales at 550,000 units in August, September, and November
and at 625,000 units per month in July and October. The selling
price is $3.75 per unit. All sales are cash sales. That is,
customers must pay ABC, Inc. before the tiles are shipped to the
customer • The inventory of finished goods on July 1 was 125,000
units. The finished goods inventory at the end of each month...
Original Budget Actual Flexible Budget Units Produced (in units) 10,000 12,000 Materials used (kg) 400 700...
Original Budget
Actual
Flexible Budget
Units Produced (in units)
10,000
12,000
Materials used (kg)
400
700
Material cost ($)
8,000
See purchases
Direct Labour (hours)
35,000
46,102
Direct Labour ($)
385,000
507,080
Variable Overhead ($)
350,000
419,161
Fixed Overhead ($)
160,000
161,000
Other Information
Overhead is Allocated on Direct Labour Hours
During the year, 800 kg of materials were purchased for
$5,000
Beginning Inventory: none
Ending Inventory: 100kg
Required:
Calculate the flexible budget amounts for all
items.
Calculate the...
Original Budget Actual Flexible Budget Units Produced (in units) 10,000 12,000 Materials used (kg) 400 700...
Original Budget
Actual
Flexible Budget
Units Produced (in units)
10,000
12,000
Materials used (kg)
400
700
Material cost ($)
8,000
See purchases
Direct Labour (hours)
35,000
46,102
Direct Labour ($)
385,000
507,080
Variable Overhead ($)
350,000
419,161
Fixed Overhead ($)
160,000
161,000
Other Information
Overhead is Allocated on Direct Labour Hours
During the year, 800 kg of materials were purchased for
$5,000
Beginning Inventory: none
Ending Inventory: 100kg
Required:
Calculate the flexible budget amounts for all
items.
Calculate the...
Assume the following information for a company that produced 10,000 units and sold 8,000 units during...
Assume the following information for a company that produced
10,000 units and sold 8,000 units during its first year of
operations and produced 8,000 units and sold 10,000 units during
its second year of operations:
Per Unit
Per Year
Selling price
$
200
Direct materials
$
82
Direct labor
$
50
Variable manufacturing overhead
$
10
Sales commission
$
8
Fixed manufacturing overhead
$
300,000
Using absorption costing, what is the cost of goods sold for the
second year of...
Wyatt Company has budgeted the following units sales for 2011: January 10,000 units February 8,000 units...
Wyatt Company has budgeted the following units sales for
2011:
January 10,000 units
February 8,000 units
March 9,000 units
April 11,000 units
May 15,000 units
Data regarding Finished Goods and Raw Materials Inventory is as
follows:
FINISHED GOODS:
The finished goods units on hand on December 31, 2010 was 2,000
units. Each unit required 2 pounds of raw materials that are
estimated to cost an average of $4 per pound. It is the company's
policy to maintain a finished goods...
Flagstaff Company has budgeted production units of 8,300 for July and 8,500 for August. The direct...
Flagstaff Company has budgeted production units of 8,300 for
July and 8,500 for August. The direct labor requirement per unit is
0.50 hours. Labor is paid at the rate of $19 per hour. The total
cost of direct labor budgeted for the month of August is:
Multiple Choice
$78,850.
$4,250.
$80,750.
$4,150.
$159,600.
Flagstaff Company has budgeted production units of 8,100 for
July and 8,300 for August. The direct materials requirement per
unit is 2 ounces (oz.). The company requires...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Discuss some examples of how motherboards and CPU combinations have evolved in the past 20 years....
- 16. What does HIRM provide to managers of health service delivery organizations? 17. What are the...
- Why do diamonds sell for such high prices? Why do pre-owned diamonds typically sell for such...
- The Utah Mining Corporation is set to open a gold mine near Provo, Utah. According to...
- Market Top Investors, Inc., is considering the purchase of a $350,000 computer with an economic life...
- As Tom Montgomery, how would you convince the De Beers Executive Committee to launch IIDV as...
- 1.2 Please give the example of the compensation package that you would like to provide to...
ADVERTISEMENT