The Gourmand Cooking School runs short cooking courses at its small campus. Management has identified two cost drivers it uses in its budgeting and performance reports—the number of courses and the total number of students. For example, the school might run two courses in a month and have a total of 64 students enrolled in those two courses. Data concerning the company’s cost formulas appear below:
| Fixed Cost per Month | Cost per Course | Cost per Student |
|||||
| Instructor wages | $ | 2,910 | |||||
| Classroom supplies | $ | 310 | |||||
| Utilities | $ | 1,210 | $ | 85 | |||
| Campus rent | $ | 5,200 | |||||
| Insurance | $ | 2,200 | |||||
| Administrative expenses | $ | 3,800 | $ | 41 | $ | 4 | |
For example, administrative expenses should be $3,800 per month plus $41 per course plus $4 per student. The company’s sales should average $890 per student.
The company planned to run four courses with a total of 64 students; however, it actually ran four courses with a total of only 60 students. The actual operating results for September appear below:
| Actual | ||
| Revenue | $ | 54,060 |
| Instructor wages | $ | 10,920 |
| Classroom supplies | $ | 19,690 |
| Utilities | $ | 1,960 |
| Campus rent | $ | 5,200 |
| Insurance | $ | 2,340 |
| Administrative expenses | $ | 3,646 |
Required:
1. Prepare the company’s planning budget for September.
2. Prepare the company’s flexible budget for September.
3. Calculate the revenue and spending variances for September.
In: Accounting
Flexible Budget for Varying Levels of Activity
Nashler Company has the following budgeted variable costs per unit produced:
| Direct materials | $7.10 |
| Direct labor | 1.54 |
| Variable overhead: | |
| Supplies | 0.23 |
| Maintenance | 0.19 |
| Power | 0.17 |
Budgeted fixed overhead costs per month include supervision of $98,000, depreciation of $77,000, and other overhead of $242,000.
Required:
1. Prepare a flexible budget for all costs of production for the following levels of production: 160,000 units, 170,000 units, and 175,000 units. Round your answers to the nearest cent, if required.
| Nashler Company | ||||
| Flexible Budget | ||||
| Variable cost per unit | Range of Production in Units 160,000 | Range of Production in Units 170,000 | Range of Production in Units 175,000 | |
| Production costs: | ||||
| Variable: | ||||
| Direct materials | $ | $ | $ | $ |
| Direct labor | ||||
| Variable overhead: | ||||
| Supplies | ||||
| Maintenance | ||||
| Power | ||||
| Total variable costs | $ | $ | $ | $ |
| Fixed overhead: | ||||
| Supervision | $ | $ | $ | |
| Depreciation | ||||
| Other overhead | ||||
| Total fixed costs | $ | $ | $ | |
| Total production costs | $ | $ | $ | |
2. What is the per-unit total product cost for each of the production levels from Requirement 1? (Round each unit cost to the nearest cent.)
| Per-unit Product Cost | |
| 160,000 | $ |
| 170,000 | $ |
| 175,000 | $ |
3. What if Nashler
Company’s cost of maintenance rose to $0.22 per unit? How would
that affect the unit product costs calculated in Requirement 2? If
required, round your answer to the nearest cent.
by $ per unit
In: Accounting
Flexible Budget for Varying Levels of Activity
Nashler Company has the following budgeted variable costs per unit produced:
| Direct materials | $7.10 |
| Direct labor | 1.54 |
| Variable overhead: | |
| Supplies | 0.23 |
| Maintenance | 0.19 |
| Power | 0.17 |
Budgeted fixed overhead costs per month include supervision of $98,000, depreciation of $77,000, and other overhead of $242,000.
Required:
1. Prepare a flexible budget for all costs of production for the following levels of production: 160,000 units, 170,000 units, and 175,000 units. Round your answers to the nearest cent, if required.
| Nashler Company | ||||
| Flexible Budget | ||||
| Variable cost per unit | Range of Production in Units 160,000 | Range of Production in Units 170,000 | Range of Production in Units 175,000 | |
| Production costs: | ||||
| Variable: | ||||
| Direct materials | $ | $ | $ | $ |
| Direct labor | ||||
| Variable overhead: | ||||
| Supplies | ||||
| Maintenance | ||||
| Power | ||||
| Total variable costs | $ | $ | $ | $ |
| Fixed overhead: | ||||
| Supervision | $ | $ | $ | |
| Depreciation | ||||
| Other overhead | ||||
| Total fixed costs | $ | $ | $ | |
| Total production costs | $ | $ | $ | |
2. What is the per-unit total product cost for each of the production levels from Requirement 1? (Round each unit cost to the nearest cent.)
| Per-unit Product Cost | |
| 160,000 | $ |
| 170,000 | $ |
| 175,000 | $ |
3. What if Nashler
Company’s cost of maintenance rose to $0.22 per unit? How would
that affect the unit product costs calculated in Requirement 2? If
required, round your answer to the nearest cent.
by $ per unit
In: Accounting
Rondeau, Inc., manufactures and sells two products: Product V9 and Product M6. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below:
| Expected Production | Direct Labor-Hours Per Unit | Total Direct Labor-Hours | |
| Product V9 | 420 | 10.2 | 4,284 |
| Product M6 | 520 | 7.2 | 3,744 |
| Total direct labor-hours | 8,028 | ||
The direct labor rate is $25.00 per DLH. The direct materials cost per unit for each product is given below:
| Direct Materials Cost per Unit | |
| Product V9 | $279.60 |
| Product M6 | $172.80 |
The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity:
| Estimated | Expected Activity | ||||||||
| Activity Cost Pools | Activity Measures | Overhead Cost | Product V9 | Product M6 | Total | ||||
| Labor-related | DLHs | $ | 97,656 | 4,284 | 3,744 | 8,028 | |||
| Product testing | Tests | 72,008 | 780 | 1,040 | 1,820 | ||||
| Order size | MHs | 390,000 | 4,500 | 4,080 | 8,580 | ||||
| $ | 559,664 | ||||||||
Required:
Calculate the difference between the unit product costs under the traditional costing method and the activity-based costing system for each of the two products. (Round your intermediate calculations and final answers to 2 decimal places. Enter your answers as positive values.)
In: Accounting
The Gourmand Cooking School runs short cooking courses at its small campus. Management has identified two cost drivers it uses in its budgeting and performance reports—the number of courses and the total number of students. For example, the school might run two courses in a month and have a total of 65 students enrolled in those two courses. Data concerning the company’s cost formulas appear below:
| Fixed Cost per Month | Cost per Course | Cost per Student |
|||||
| Instructor wages | $ | 2,950 | |||||
| Classroom supplies | $ | 280 | |||||
| Utilities | $ | 1,200 | $ | 65 | |||
| Campus rent | $ | 4,500 | |||||
| Insurance | $ | 2,000 | |||||
| Administrative expenses | $ | 3,600 | $ | 45 | $ | 6 | |
For example, administrative expenses should be $3,600 per month plus $45 per course plus $6 per student. The company’s sales should average $890 per student.
The company planned to run four courses with a total of 65 students; however, it actually ran four courses with a total of only 57 students. The actual operating results for September appear below:
| Actual | ||
| Revenue | $ | 54,950 |
| Instructor wages | $ | 11,080 |
| Classroom supplies | $ | 18,050 |
| Utilities | $ | 1,870 |
| Campus rent | $ | 4,500 |
| Insurance | $ | 2,140 |
| Administrative expenses | $ | 3,596 |
Required:
1. Prepare the company’s planning budget for September.
2. Prepare the company’s flexible budget for September.
3. Calculate the revenue and spending variances for September.
In: Accounting
Question 1
The following information is for Obaapa Ltd's July production: Standards: Material: 3.0 feet per unit @ GH¢4.20 per foot, Labour: 2.5 hours per unit @ GH¢7.50 per hour. Actual: Production: 2,750 units produced during the month, Material: 8,700 feet used; 9,000 feet purchased @ GH¢4.50 per foot, Labor: 7,000 direct labour hours @ GH¢7.90 per hour. Determine the total material cost and total labour cost variance, separating them into their corresponding price and quantity variances. show all workings clearly
Question 2
Akyede Groups of Companies uses a standard cost system for its production process and applies overhead based on direct labour hours. The following information is available for May when Akyede produced 4,500 units: Standard: Direct labour hour per unit - 2.50, Variable overhead per direct labour hour - GH¢1.75, the fixed overhead per direct labour hour - GH¢3.10, Budgeted variable overhead - GH¢21,875, Budgeted fixed overhead - GH¢38,750. Actual: Direct labour hours - 10,000, Variable overhead- GH¢26,250, Fixed overhead- GH¢38,000. Calculate the total variable overhead cost and total fixed overhead cost variance, indicating the respective spending or expenditure variance and efficiency (volume) variance.
In: Accounting
The Gourmand Cooking School runs short cooking courses at its small campus. Management has identified two cost drivers it uses in its budgeting and performance reports—the number of courses and the total number of students. For example, the school might run two courses in a month and have a total of 62 students enrolled in those two courses. Data concerning the company’s cost formulas appear below:
| Fixed Cost per Month | Cost per Course | Cost per Student |
|||||
| Instructor wages | $ | 2,970 | |||||
| Classroom supplies | $ | 290 | |||||
| Utilities | $ | 1,200 | $ | 75 | |||
| Campus rent | $ | 4,800 | |||||
| Insurance | $ | 2,400 | |||||
| Administrative expenses | $ | 3,700 | $ | 40 | $ | 5 | |
For example, administrative expenses should be $3,700 per month plus $40 per course plus $5 per student. The company’s sales should average $880 per student.
The company planned to run four courses with a total of 62 students; however, it actually ran four courses with a total of only 52 students. The actual operating results for September appear below:
| Actual | ||
| Revenue | $ | 51,660 |
| Instructor wages | $ | 11,160 |
| Classroom supplies | $ | 17,830 |
| Utilities | $ | 1,910 |
| Campus rent | $ | 4,800 |
| Insurance | $ | 2,540 |
| Administrative expenses | $ | 3,596 |
Required:
1. Prepare the company’s planning budget for September.
2. Prepare the company’s flexible budget for September.
3. Calculate the revenue and spending variances for September.
In: Accounting
The Gourmand Cooking School runs short cooking courses at its small campus. Management has identified two cost drivers it uses in its budgeting and performance reports—the number of courses and the total number of students. For example, the school might run two courses in a month and have a total of 61 students enrolled in those two courses. Data concerning the company’s cost formulas appear below:
| Fixed Cost per Month | Cost per Course | Cost per Student |
|||||
| Instructor wages | $ | 2,950 | |||||
| Classroom supplies | $ | 270 | |||||
| Utilities | $ | 1,240 | $ | 75 | |||
| Campus rent | $ | 4,600 | |||||
| Insurance | $ | 2,300 | |||||
| Administrative expenses | $ | 3,700 | $ | 45 | $ | 7 | |
For example, administrative expenses should be $3,700 per month plus $45 per course plus $7 per student. The company’s sales should average $890 per student.
The company planned to run four courses with a total of 61 students; however, it actually ran four courses with a total of only 59 students. The actual operating results for September appear below:
| Actual | ||
| Revenue | $ | 51,390 |
| Instructor wages | $ | 11,080 |
| Classroom supplies | $ | 16,320 |
| Utilities | $ | 1,950 |
| Campus rent | $ | 4,600 |
| Insurance | $ | 2,440 |
| Administrative expenses | $ | 3,733 |
Required:
1. Prepare the company’s planning budget for September.
2. Prepare the company’s flexible budget for September.
3. Calculate the revenue and spending variances for September.
In: Accounting
The Gourmand Cooking School runs short cooking courses at its small campus. Management has identified two cost drivers it uses in its budgeting and performance reports—the number of courses and the total number of students. For example, the school might run two courses in a month and have a total of 64 students enrolled in those two courses. Data concerning the company’s cost formulas appear below:
| Fixed Cost per Month | Cost per Course | Cost per Student |
|||||
| Instructor wages | $ | 2,940 | |||||
| Classroom supplies | $ | 280 | |||||
| Utilities | $ | 1,210 | $ | 80 | |||
| Campus rent | $ | 4,500 | |||||
| Insurance | $ | 2,300 | |||||
| Administrative expenses | $ | 3,900 | $ | 42 | $ | 5 | |
For example, administrative expenses should be $3,900 per month plus $42 per course plus $5 per student. The company’s sales should average $870 per student.
The company planned to run four courses with a total of 64 students; however, it actually ran four courses with a total of only 60 students. The actual operating results for September appear below:
| Actual | ||
| Revenue | $ | 52,780 |
| Instructor wages | $ | 11,040 |
| Classroom supplies | $ | 17,770 |
| Utilities | $ | 1,940 |
| Campus rent | $ | 4,500 |
| Insurance | $ | 2,440 |
| Administrative expenses | $ | 3,814 |
Required:
1. Prepare the company’s planning budget for September.
2. Prepare the company’s flexible budget for September.
3. Calculate the revenue and spending variances for September.
In: Accounting
Cost of Goods Sold, Cost of Goods Manufactured
Glenville Company has the following information for April:
| Cost of direct materials used in production | $54,000 | |
| Direct labor | 66,000 | |
| Factory overhead | 20,000 | |
| Work in process inventory, April 1 | 45,000 | |
| Work in process inventory, April 30 | 50,000 | |
| Finished goods inventory, April 1 | 25,000 | |
| Finished goods inventory, April 30 | 17,000 |
a. For April, determine the cost of goods manufactured.
Using the data given, prepare a statement of Cost of Goods Manufactured.
| Glenville Company | ||
| Statement of Cost of Goods Manufactured | ||
| Work in process inventory, April 1 | $ | |
| Cost of direct materials used in production | $ | |
| Direct labor | ||
| Factory overhead | ||
| Total manufacturing costs incurred in April | ||
| Total manufacturing costs | $ | |
| Work in process inventory, April 30 | ||
| Cost of goods manufactured | $ | |
b. For April, determine the cost of goods sold.
Using the data given, prepare a statement of Cost of Goods Sold.
| Glenville Company | |
| Statement of Cost of Goods Sold | |
| Finished goods inventory, April 1 | $ |
| Cost of goods manufactured | |
| Cost of finished goods available for sale | $ |
| Finished goods inventory, April 30 | |
| Cost of goods sold | $ |
In: Accounting