Question

In: Accounting

Bluecap Co. uses a standard cost system and flexible budgets for control purposes. The following budgeted...

Bluecap Co. uses a standard cost system and flexible budgets for control purposes. The following budgeted information pertains to 2019:

Denominator volume—number of units 7,000
Denominator volume—percent of capacity 70 %
Denominator volume—standard direct labor hours (DLHs) 35,000
Budgeted variable factory overhead cost at denominator volume $ 102,700
Total standard factory overhead rate per DLH $ 15.10

During 2019, Bluecap worked 44,000 DLHs and manufactured 9,000 units. The actual factory overhead cost for the year was $15,000 greater than the flexible budget amount for the units produced, of which $5,000 was due to fixed factory overhead. In preparing a budget for 2020 Bluecap decided to raise the level of operation to 90% of capacity (a level it considers to be "practical capacity"), to manufacture 8,400 units at a budgeted total of 25,200 DLHs.

The variable overhead spending variance in 2019 for Bluecap Co. (to the nearest whole dollar) was: (Round your intermediate calculation to 2 decimal places.)

Multiple Choice

  • $9,490 unfavorable.

  • $5,000 unfavorable.

  • $12,930 unfavorable.

  • $17,930 unfavorable.

  • $10,690 favorable.

Solutions

Expert Solution


Related Solutions

Bluecap Co. uses a standard cost system and flexible budgets for control purposes. The following budgeted...
Bluecap Co. uses a standard cost system and flexible budgets for control purposes. The following budgeted information pertains to 2019: Denominator volume—number of units 9,000 Denominator volume—percent of capacity 90 % Denominator volume—standard direct labor hours (DLHs) 27,000 Budgeted variable factory overhead cost at denominator volume $ 103,700 Total standard factory overhead rate per DLH $ 15.10 During 2019, Bluecap worked 26,000 DLHs and manufactured 9,100 units. The actual factory overhead cost for the year was $13,000 greater than the...
Bluecap Co. uses a standard cost system and flexible budgets for control purposes. The following budgeted...
Bluecap Co. uses a standard cost system and flexible budgets for control purposes. The following budgeted information pertains to 2016: Denominator volume-number of units 8,000 Denominator volume-percent of capacity 80% Denominator volume-standard direct labor hours 24,000 Budgeted variable factory overhead cost at the denominator volume $103,200 Total standard factory overhead rate per direct labor hour $15.10 During 2016, Bluecap worked 28,000 direct labor hours and manufactured 9,600 units. The actual factory overhead was $14,000 greater than the flexible budget amount...
Bluecap Co. uses a standard cost system and flexible budgets for control purposes. The following budgeted...
Bluecap Co. uses a standard cost system and flexible budgets for control purposes. The following budgeted information pertains to 2019: Denominator volume—number of units 8,000 Denominator volume—percent of capacity 80%Denominator volume—standard direct labor hours (DLHs) 24,000 Budgeted variable factory overhead cost at denominator volume$103,200 Total standard factory overhead rate per DLH$15.10 During 2019, Bluecap worked 28,000 DLHs and manufactured 9,600 units. The actual factory overhead cost for the year was $14,000 greater than the flexible budget amount for the units...
Robinson Corporation manufactures embroidered jackets. The company prepares flexible budgets and uses a standard cost system...
Robinson Corporation manufactures embroidered jackets. The company prepares flexible budgets and uses a standard cost system to control manufacturing costs. The following standard unit cost of a jacket is based on the static budget volume of 15,000 jackets per month. Direct materials (3.0 sq. ft x $5.00 per sq. ft.) $15.00 Direct labor (2 hours x $12.00 per hour) 24.00 Manufacturing overhead: -Variable (2 hours x @$1.00 per hour) $2.00 -Fixed (2 hours x $3.00 per hour) 6.00 Total cost...
Jordan Corporation Inc. manufactures a single product and uses a standard cost system for control purposes....
Jordan Corporation Inc. manufactures a single product and uses a standard cost system for control purposes. The standard cost card for the product is as follows: Standard Cost Standard Cost Per Unit ($) Direct materials 2 metres @ $8.45 per metre $16.90 Direct labour 1.4 hours @ $16 per DLH 22.40 Variable overhead 1.4 hours @ $2.50 per DLH 3.50 Fixed overhead 1.4 hours @ $6 per DLH 8.40 Total cost $51.20 * DLH - Direct labour hours Some additional...
Marigold Corp. uses flexible budgets. At normal capacity of 7000 units, budgeted manufacturing overhead is: $21000...
Marigold Corp. uses flexible budgets. At normal capacity of 7000 units, budgeted manufacturing overhead is: $21000 variable and $270000 fixed. If Marigold Corp. had actual overhead costs of $295200 for 9000 units produced, what is the difference between actual and budgeted costs?
Problem 2 Speed Control Inc. Manufactures carburetors and uses a standard cost system. The standard factory...
Problem 2 Speed Control Inc. Manufactures carburetors and uses a standard cost system. The standard factory overhead costs per carburetor are based on machine hours and are as follows: Variable overhead (3 hours at $4/hour) $12 Fixed overhead (3 hours at $5/hour**) 15 Total overhead cost per unit 27 **Based on an expectation of 12,000 carburetors per month. The following additional information is available for the month of December: 10,000 carburetor s were produced although 12,000 had been scheduled for...
Elements of a Flexible Budgets Presented are partial flexible cost budgets for various levels of output....
Elements of a Flexible Budgets Presented are partial flexible cost budgets for various levels of output. Required Solve for items "a" though "n" Rate per unit Units 5,000 7,500 10,000 Direct materials a. $Answer $50,000 b. $Answer c. $Answer Direct labor d. $Answer e. Answer 15,000 f. Answer Variable overhead           $3.00 g. Answer h. Answer i. Answer Fixed overhead j. Answer k. Answer l. Answer Total m. $Answer n. $Answer $200,000
Milberg Co. uses absorption costing and standard costing to improve cost control. In 2016, the total...
Milberg Co. uses absorption costing and standard costing to improve cost control. In 2016, the total budgeted overhead rate was $1.55 per direct labour hour. When preparing the budget, Milberg expected a monthly activity level of 10,000 direct labour hours. The monthly variable overhead cost budgeted for this level of activity was $9,500. The following data on actual results are provided for the month of November 2016. Materials purchased  20,000 units Direct labour costs incurred $36,000 Total of direct labour...
McKnight Recliners manufactures leather recliners and uses flexible budgeting and a standard cost system. McKnight allocates...
McKnight Recliners manufactures leather recliners and uses flexible budgeting and a standard cost system. McKnight allocates overhead based on yards of direct materials. The? company's performance report includes the following selected? data: Static Budget Actual Results (1,000 recliners) (980 recliners) Sales (1,000 recliners x $500 each) $500,000 (980 recliners x $475 each) $465,500 Variable Manufacturing Costs: Direct Materials (6,000 yds. @ $8.50 / yd.) 51,000 (6,143 yds. @ $8.30 / yd.) 50,987 Direct Labor (10,000 DLHr @ $9.30 / DLHr)...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT