Factory Overhead Cost Variance Report

Tannin Products Inc. prepared the following factory overhead cost budget for the Trim Department for July of the current year, during which it expected to use 10,000 hours for production:

Tannin has available 14,000 hours of monthly productive capacity in the Trim Department under normal business conditions. During July, the Trim Department actually used 9,000 hours for production. The actual fixed costs were as budgeted. The actual variable overhead for July was as follows:

Construct a factory overhead cost variance report for the Trim Department for July. Enter all amounts as positive numbers. If an amount box does not require an entry, leave it blank. Round your interim computations to the nearest cent, if required.

                                                Units Cost per unit Total

Beginning inventory 60 $10               

Puirchase 3/31 40 $11                 

Purchase 4/30 40 $12                 

Purchase 5/31 60 $13                  

Total 200                                          

There are a total of 200 units. 80 units were left in ending inventory. Calculate the following under the periodic method for costing inventory:

1. Compute ending inventory using FIFO.

2. Compute cost of merchandise sold using FIFO.

3. Compute ending inventory using LIFO.

4. Compute cost of merchandise sold using FIFO.

5. Compute ending inventory using weighted average cost.

6.   Compute cost of merchandise sold using weighted average cost.

Problem 3

Table 1 below shows an incomplete table of costs for a company.

1. Use the definitions of these costs and how they are related to complete the missing cells of this table. For each cell you fill in, explain how you are able to determine the value of that cost.

Table 1 – Costs

2. One a separate piece of paper (either by hand or with Excel) graph the Average Total Cost (ATC) and Marginal Cost (MC) curves for all quantities of output.

Monson& Company is an architectural firm specializing in home remodeling for private clients and new office buildings for corporate clients. Monson charges customers at a billing rate equal to 128​%

of the​ client's total job cost. A​ client's total job cost is a combination of​(1) professional time spent on the client $64 per hour cost of employing each​ professional) and​ (2) operating overhead allocated to the​ client's job. Monson allocates operating overhead to jobs based on professional hours spent on the job. Monson estimates its five professionals will incur a total of​ 10,000 professional hours working on client jobs during the year.

AnnikaLaughlin hired Monson to design her kitchen remodeling. A total of 2020 professional hours were incurred on this job. In​ addition, Laughlin​'s remodeling job required one of the professionals to travel back and forth to her house for a total of 160 miles. The blueprints had to be copied four times because Laughlin changed the plans several times. In​ addition, 19 hours of secretarial time were used lining up the subcontractors for the job.

Requirements

Luthan Company uses a plantwide predetermined overhead rate of $22.80 per direct labor-hour. This predetermined rate was based on a cost formula that estimated $273,600 of total manufacturing overhead cost for an estimated activity level of 12,000 direct labor-hours.

The company incurred actual total manufacturing overhead cost of $268,000 and 11,700 total direct labor-hours during the period.

Required:

Determine the amount of manufacturing overhead cost that would have been applied to all jobs during the period.

manufacturing overhead applied: ____________

Why should sunk costs be ignored when making economic decisions in order to maximize or minimize things such as utility, profits, total cost, time, etc?

Does the law of diminishing marginal utility hold true in every situation? Is it possible to think of any goods for which consuming additional units, at least initially, will result in increasing marginal utility? Why or why not?

Explain why the marginal cost curve intersects the average total cost curve at the level of output where the average total cost is at a minimum.  

Please answer these question

Question 21

Which of the following is equivalent to ATC?

Group of answer choices

FC + VC.

FC + MC.

Change in total cost divided by change in output.

(FC + VC) ÷ Q.

Question 22

In the short run, average costs may rise as a firm increases the rate of production because:

Group of answer choices

Inflation causes the prices of resources to increase.

The supply curve for the product shifts.

Some inputs, such as plant and equipment, cannot be changed.

All of the above.

Question 23

The marginal cost curve intersects the minimum of the curve representing:

Group of answer choices

TC.

ATC.

AFC.

All of the above.

Question 24

If the marginal cost curve is rising, then which of the following must be true?

Group of answer choices

The average total cost curve must be rising.

The average total cost curve must be below the marginal cost curve.

The average total cost curve must be above the marginal cost curve.

Total costs must be rising.

Question 25

Explicit costs:

Group of answer choices

Include only payments to labor.

Are the sum of actual monetary payments made for resources used to produce a good.

Include the market value of all resources used to produce a good.

Are the total value of resources used to produce a good but for which no monetary payment is actually made.

Draw the four cases of perfectly competitive outcomes in the short run. Label everything including price, total revenue, marginal revenue, total cost, variable cost, and profit/loss.

Consider the following pair of mortgage loan options for a ?$130 comma 000 mortgage. Which mortgage loan has the larger total cost? (closing costs? + the amount paid for points? + total cost of? interest)? By how? much?

Mortgage? A: 20?-year fixed at 7.25?% with closing costs of ?$2400 and 1 point.

Mortgage? B: 20?-year fixed at 5.25?% with closing costs of ?$2400 and 2 points.

Choose the correct answer? below, and fill in the answer box to complete your choice.

A. Mortgage B has a larger total cost than mortgage A by ?$ .

B. Mortgage A has a larger total cost than mortgage B by ?$ ?(Round to the nearest dollar as? needed.)

Hermosa, Inc., produces one model of mountain bike. Partial information for the company follows:

Required:
1. Complete the table.

2. Calculate Hermosa’s contribution margin ratio and its total contribution margin at each sales level indicated in the table assuming the company sells each bike for $750.

4. Calculate Hermosa’s break-even point in units and sales revenue.