Questions
The production supervisor of the Machining Department for Niland Company agreed to the following monthly static...

The production supervisor of the Machining Department for Niland Company agreed to the following monthly static budget for the upcoming year:

Niland Company
Machining Department
Monthly Production Budget
Wages $576,000
Utilities 26,000
Depreciation 44,000
Total $646,000

The actual amount spent and the actual units produced in the first three months in the Machining Department were as follows:

Amount Spent Units Produced
January $608,000 96,000
February 583,000 88,000
March 553,000 79,000

The Machining Department supervisor has been very pleased with this performance because actual expenditures for January–March have been significantly less than the monthly static budget of 646,000. However, the plant manager believes that the budget should not remain fixed for every month but should “flex” or adjust to the volume of work that is produced in the Machining Department. Additional budget information for the Machining Department is as follows:

Wages per hour $22
Utility cost per direct labor hour $1
Direct labor hours per unit 0.25
Planned monthly unit production 105,000

a. Prepare a flexible budget for the actual units produced for January, February, and March in the Machining Department. Assume depreciation is a fixed cost. If required, use per unit amounts carried out to two decimal places.

Niland Company
Machining Department Budget
For the Three Months Ending March 31
January February March
Units of production 96,000 88,000 79,000
$ $ $
Total $ $ $
Supporting calculations:
Units of production 96,000 88,000 79,000
Hours per unit x x x
Total hours of production
Wages per hour x $ x $ x $
Total wages $ $ $
Total hours of production
Utility costs per hour x $ x $ x $
Total utilities $ $ $

b. Compare the flexible budget with the actual expenditures for the first three months.

January February March
Total flexible budget $ $ $
Actual cost
Excess of actual cost over budget $ $ $

What does this comparison suggest?

The Machining Department has performed better than originally thought.
The department is spending more than would be expected.

In: Accounting

The production supervisor of the Machining Department for Hagerstown Company agreed to the following monthly static...

The production supervisor of the Machining Department for Hagerstown Company agreed to the following monthly static budget for the upcoming year:

Hagerstown Company
Machining Department
Monthly Production Budget
Wages $310,000
Utilities 15,000
Depreciation 26,000
Total $351,000

The actual amount spent and the actual units produced in the first three months in the Machining Department were as follows:

Amount Spent Units Produced
May $331,000 71,000
June 312,000 64,000
July 299,000 58,000

The Machining Department supervisor has been very pleased with this performance because actual expenditures for May–July have been significantly less than the monthly static budget of 351,000. However, the plant manager believes that the budget should not remain fixed for every month but should “flex” or adjust to the volume of work that is produced in the Machining Department. Additional budget information for the Machining Department is as follows:

Wages per hour $20.00
Utility cost per direct labor hour $1.00
Direct labor hours per unit 0.20
Planned monthly unit production 77,000

a. Prepare a flexible budget for the actual units produced for May, June, and July in the Machining Department. Assume depreciation is a fixed cost. If required, use per unit amounts carried out to two decimal places.

Hagerstown Company
Machining Department Budget
For the Three Months Ending July 31
May June July
Units of production 71,000 64,000 58,000
Wages $ $ $
Utilities
Depreciation
Total $ $ $
Supporting calculations:
Units of production 71,000 64,000 58,000
Hours per unit x x x
Total hours of production
Wages per hour x $ x $ x $
Total wages $ $ $
Total hours of production
Utility costs per hour x $ x $ x $
Total utilities $ $ $

Feedback

For each level of production, show wages, utilities, and depreciation.

b. Compare the flexible budget with the actual expenditures for the first three months.

May June July
Total flexible budget $ $ $
Actual cost
Excess of actual cost over budget $ $ $

In: Accounting

Static Budget versus Flexible Budget The production supervisor of the Machining Department for Niland Company agreed...

Static Budget versus Flexible Budget

The production supervisor of the Machining Department for Niland Company agreed to the following monthly static budget for the upcoming year:

Niland Company
Machining Department
Monthly Production Budget
Wages $698,000
Utilities 43,000
Depreciation 72,000
Total $813,000

The actual amount spent and the actual units produced in the first three months in the Machining Department were as follows:

Amount Spent Units Produced
January $767,000 122,000
February 732,000 111,000
March 699,000 100,000

The Machining Department supervisor has been very pleased with this performance because actual expenditures for January–March have been significantly less than the monthly static budget of 813,000. However, the plant manager believes that the budget should not remain fixed for every month but should “flex” or adjust to the volume of work that is produced in the Machining Department. Additional budget information for the Machining Department is as follows:

Wages per hour $21
Utility cost per direct labor hour $1.3
Direct labor hours per unit 0.25
Planned monthly unit production 133,000

a. Prepare a flexible budget for the actual units produced for January, February, and March in the Machining Department. Assume depreciation is a fixed cost. If required, use per unit amounts carried out to two decimal places.

Niland Company
Machining Department Budget
For the Three Months Ending March 31
January February March
Units of production 122,000 111,000 100,000
$ $ $
Total $ $ $
Supporting calculations:
Units of production 122,000 111,000 100,000
Hours per unit x x x
Total hours of production
Wages per hour x $ x $ x $
Total wages $ $ $
Total hours of production
Utility costs per hour x $ x $ x $
Total utilities $ $ $

b. Compare the flexible budget with the actual expenditures for the first three months.

January February March
Total flexible budget $ $ $
Actual cost
Excess of actual cost over budget $ $ $

What does this comparison suggest?

The Machining Department has performed better than originally thought.
The department is spending more than would be expected.

In: Accounting

The production supervisor of the Machining Department for Niland Company agreed to the following monthly static...

The production supervisor of the Machining Department for Niland Company agreed to the following monthly static budget for the upcoming year: Niland Company Machining Department Monthly Production Budget Wages $271,000 Utilities 16,000 Depreciation 27,000 Total $314,000 The actual amount spent and the actual units produced in the first three months in the Machining Department were as follows: Amount Spent Units Produced January $296,000 73,000 February 284,000 67,000 March 270,000 60,000 The Machining Department supervisor has been very pleased with this performance because actual expenditures for January–March have been significantly less than the monthly static budget of 314,000. However, the plant manager believes that the budget should not remain fixed for every month but should “flex” or adjust to the volume of work that is produced in the Machining Department. Additional budget information for the Machining Department is as follows: Wages per hour $17 Utility cost per direct labor hour $1 Direct labor hours per unit 0.2 Planned monthly unit production 80,000 a. Prepare a flexible budget for the actual units produced for January, February, and March in the Machining Department. Assume depreciation is a fixed cost. If required, use per unit amounts carried out to two decimal places. Niland Company Machining Department Budget For the Three Months Ending March 31 January February March Units of production 73,000 67,000 60,000 $ $ $ Total $ $ $ Supporting calculations: Units of production 73,000 67,000 60,000 Hours per unit x x x Total hours of production Wages per hour x $ x $ x $ Total wages $ $ $ Total hours of production Utility costs per hour x $ x $ x $ Total utilities $ $ $ b. Compare the flexible budget with the actual expenditures for the first three months. January February March Total flexible budget $ $ $ Actual cost Excess of actual cost over budget $ $ $ What does this comparison suggest? The Machining Department has performed better than originally thought. The department is spending more than would be expected.

In: Accounting

The production supervisor of the Machining Department for Niland Company agreed to the following monthly static...

The production supervisor of the Machining Department for Niland Company agreed to the following monthly static budget for the upcoming year:

Niland Company
Machining Department
Monthly Production Budget
Wages $629,000
Utilities 33,000
Depreciation 55,000
Total $717,000

The actual amount spent and the actual units produced in the first three months in the Machining Department were as follows:

Amount Spent Units Produced
January $676,000 110,000
February 644,000 100,000
March 613,000 90,000

The Machining Department supervisor has been very pleased with this performance because actual expenditures for January–March have been significantly less than the monthly static budget of 717,000. However, the plant manager believes that the budget should not remain fixed for every month but should “flex” or adjust to the volume of work that is produced in the Machining Department. Additional budget information for the Machining Department is as follows:

Wages per hour $21
Utility cost per direct labor hour $1.1
Direct labor hours per unit 0.25
Planned monthly unit production 120,000

a. Prepare a flexible budget for the actual units produced for January, February, and March in the Machining Department. Assume depreciation is a fixed cost. If required, use per unit amounts carried out to two decimal places.

Niland Company
Machining Department Budget
For the Three Months Ending March 31
January February March
Units of production 110,000 100,000 90,000
$ $ $
Total $ $ $
Supporting calculations:
Units of production 110,000 100,000 90,000
Hours per unit x x x
Total hours of production
Wages per hour x $ x $ x $
Total wages $ $ $
Total hours of production
Utility costs per hour x $ x $ x $
Total utilities $ $ $

b. Compare the flexible budget with the actual expenditures for the first three months.

January February March
Total flexible budget $ $ $
Actual cost
Excess of actual cost over budget $ $ $

What does this comparison suggest?

The Machining Department has performed better than originally thought.
The department is spending more than would be expected.

In: Accounting

Static Budget versus Flexible Budget The production supervisor of the Machining Department for Niland Company agreed...

Static Budget versus Flexible Budget

The production supervisor of the Machining Department for Niland Company agreed to the following monthly static budget for the upcoming year:

Niland Company
Machining Department
Monthly Production Budget
Wages $590,000
Utilities 28,000
Depreciation 47,000
Total $665,000

The actual amount spent and the actual units produced in the first three months in the Machining Department were as follows:

Amount Spent Units Produced
January $626,000 57,000
February 598,000 52,000
March 571,000 47,000

The Machining Department supervisor has been very pleased with this performance because actual expenditures for January–March have been significantly less than the monthly static budget of 665,000. However, the plant manager believes that the budget should not remain fixed for every month but should “flex” or adjust to the volume of work that is produced in the Machining Department. Additional budget information for the Machining Department is as follows:

Wages per hour $19
Utility cost per direct labor hour $0.9
Direct labor hours per unit 0.5
Planned monthly unit production 63,000

a. Prepare a flexible budget for the actual units produced for January, February, and March in the Machining Department. Assume depreciation is a fixed cost. If required, use per unit amounts carried out to two decimal places.

Niland Company
Machining Department Budget
For the Three Months Ending March 31
January February March
Units of production 57,000 52,000 47,000
$ $ $
Total $ $ $
Supporting calculations:
Units of production 57,000 52,000 47,000
Hours per unit x x x
Total hours of production
Wages per hour x $ x $ x $
Total wages $ $ $
Total hours of production
Utility costs per hour x $ x $ x $
Total utilities $ $ $

b. Compare the flexible budget with the actual expenditures for the first three months.

January February March
Total flexible budget $ $ $
Actual cost
Excess of actual cost over budget $ $ $

What does this comparison suggest?

The Machining Department has performed better than originally thought.
The department is spending more than would be expected.

In: Accounting

The production supervisor of the Machining Department for Niland Company agreed to the following monthly static...

The production supervisor of the Machining Department for Niland Company agreed to the following monthly static budget for the upcoming year:

Niland Company
Machining Department
Monthly Production Budget
Wages $1,535,000
Utilities 63,000
Depreciation 105,000
Total $1,703,000

The actual amount spent and the actual units produced in the first three months in the Machining Department were as follows:

Amount Spent Units Produced
January $1,602,000 128,000
February 1,531,000 117,000
March 1,451,000 105,000

The Machining Department supervisor has been very pleased with this performance because actual expenditures for January–March have been significantly less than the monthly static budget of 1,703,000. However, the plant manager believes that the budget should not remain fixed for every month but should “flex” or adjust to the volume of work that is produced in the Machining Department. Additional budget information for the Machining Department is as follows:

Wages per hour $22
Utility cost per direct labor hour $0.9
Direct labor hours per unit 0.5
Planned monthly unit production 140,000

a. Prepare a flexible budget for the actual units produced for January, February, and March in the Machining Department. Assume depreciation is a fixed cost. If required, use per unit amounts carried out to two decimal places.

Niland Company
Machining Department Budget
For the Three Months Ending March 31
January February March
Units of production 128,000 117,000 105,000
$ $ $
Total $ $ $
Supporting calculations:
Units of production 128,000 117,000 105,000
Hours per unit x x x
Total hours of production
Wages per hour x $ x $ x $
Total wages $ $ $
Total hours of production
Utility costs per hour x $ x $ x $
Total utilities $ $ $

b. Compare the flexible budget with the actual expenditures for the first three months.

January February March
Total flexible budget $ $ $
Actual cost
Excess of actual cost over budget $ $ $

What does this comparison suggest?

The Machining Department has performed better than originally thought.
The department is spending more than would be expected.

In: Accounting

The Gourmand Cooking School runs short cooking courses at its small campus. Management has identified two...

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 63 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 $ 280
Utilities $ 1,210 $ 50
Campus rent $ 4,500
Insurance $ 2,000
Administrative expenses $ 3,700 $ 46 $ 7

For example, administrative expenses should be $3,700 per month plus $46 per course plus $7 per student. The company’s sales should average $850 per student.

The company planned to run four courses with a total of 63 students; however, it actually ran four courses with a total of only 59 students. The actual operating results for September appear below:

Actual
Revenue $ 50,650
Instructor wages $ 11,160
Classroom supplies $ 17,490
Utilities $ 1,820
Campus rent $ 4,500
Insurance $ 2,140
Administrative expenses $ 3,751

Required:

1. Prepare the company’s planning budget for September.

Prepare the company’s planning budget for September.
Gourmand Cooking School
Planning Budget
For the Month Ended September 30
Revenue
Expenses:
Instructor wages
Classroom supplies
Utilities
Campus rent
Insurance
Administrative expenses
Total expense
Net operating income

2. Prepare the company’s flexible budget for September.

Prepare the company’s flexible budget for September.
Gourmand Cooking School
Flexible Budget
For the Month Ended September 30
Revenue
Expenses:
Instructor wages
Classroom supplies
Utilities
Campus rent
Insurance
Administrative expenses
Total expense
Net operating income

3. Calculate the revenue and spending

Gourmand Cooking School
Revenue and Spending Variances
For the Month Ended September 30
Actual Results Revenue and Spending Variances Flexible Budget
Courses 4
Students 59
Revenue $50,650
Expenses:
Instructor wages 11,160
Classroom supplies 17,490
Utilities 1,820
Campus rent 4,500
Insurance 2,140
Administrative expenses 3,751
Total expense 40,861
Net operating income $9,789

In: Accounting

1. By royal decree, there is only a single toothpaste manufacturer in Arlington, and the following...

1.

By royal decree, there is only a single toothpaste manufacturer in Arlington, and the following represents his demand curve (shown below). If the ATC of producing toothpaste is constant at $16.50, then the monopolist will produce:  

Demand $20.00 $19.50 $19.00 $18.50 $18.00 $17.50 $17.00 $16.50 $16.00
Price 0 1 2 3 4 5 6 7 8
Quantity

Group of answer choices

A. shut down because AVC is not covered

B. 3 tubes at a total profit of $8

C. 4 tubes at a total profit of $6

D. 4 tubes at a total profit of $1.50

E. shut down because ATC is not covered

F. none of the above

2.

Monopoly is inefficient because

A. Group of answer choices production is not at minimum ATC

B. marginal revenue (MR) does not equal marginal cost (MC)

C. Price < Marginal cost

D. None of the above

E. added resources would be more valuable to society as inputs into the monopolized industry than where they are currently being used

3. (a)

Twenty-Twenty, LLC is a chartered monopoly supplier of fashion glasses frames and it produces with the following costs (shown below). What would Twenty-Twenty's output be?

Cost
Qty 1 2 3 4 5 6

7

Total Cost ($)

 $5 8 9 16 25 36 49

Demand
Qty 1 2 3 4 5 6 7
Price $13 12.50 12 11.50 11 10.50 10

Group of answer choices

A. none of the above

B. 3

C. 1

D. 0

E. 5

3(b)

Twenty-Twenty, LLC is a chartered monopoly producer of fashion glasses frames and it produces with the following demand and costs schedule (shown below). At the profit maximizing level of output, what will Twenty-Twenty's profits be? What would Twenty-Twenty's output be?

Cost
Qty 1 2 3 4 5 6

7

Total Cost ($)

 $5 8 9 16 25 36 49

Demand
Qty 1 2 3 4 5 6 7
Price $13 12.50 12 11.50 11 10.50 10

Group of answer choices

A. $11

B. $0

C. $30

D. None of the above

E. $35

3(C)

Twenty-Twenty, LLC is a monopolist producer of fashion glasses frames. It produces with the following cost and demand schedule (shown in the table below). At the profit maximizing output. the difference between Price and Marginal Cost would be: What would Twenty-Twenty's output be?

Cost
Qty 1 2 3 4 5 6

7

Total Cost ($)

 $5 8 9 16 25 36 49

Demand
Qty 1 2 3 4 5 6 7
Price $13 12.50 12 11.50 11 10.50 10

Group of answer choices

A. 2

B. $5

C.$6

D. $4.50

E. 0

F. none of the above

In: Economics

Sweeten Company had no jobs in progress at the beginning of March and no beginning inventories....

Sweeten Company had no jobs in progress at the beginning of March and no beginning inventories. The company has two manufacturing departments—Molding and Fabrication. It started, completed, and sold only two jobs during March—Job P and Job Q. The following additional information is available for the company as a whole and for Jobs P and Q (all data and questions relate to the month of March)
Molding Fabrication Total
Estimated total machine-hours used
2,500 1,500 4,000
Estimated total fixed manufacturing overhead
$14,750 $17,850 $32,600
Estimated variable manufacturing overhead per machine-hour
$3.30 $4.10

Job P Job Q
Direct materials
$32,000 $17,500
Direct labor cost
$36,200 $15,100
Actual machine-hours used:
Molding
3,600 2,700
Fabrication
2,500 2,800
Total
6,100 5,500

Sweeten Company had no underapplied or overapplied manufacturing overhead costs during the month.
Required:
For questions 1-8, assume that Sweeten Company uses a plantwide predetermined overhead rate with machine-hours as the allocation base. For questions 9-15, assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both departments.

6. If Job Q included 30 units, what was its unit product cost?
7. Assume that Sweeten Company used cost-plus pricing (and a markup percentage of 80% of total manufacturing cost) to establish selling prices for all of its jobs. What selling price would the company have established for Jobs P and Q? What are the selling prices for both jobs when stated on a per unit basis assuming 20 units were produced for Job P and 30 units were produced for Job Q?

8. What was Sweeten Company’s cost of goods sold for March?

9. What were the company’s predetermined overhead rates in the Molding Department and the Fabrication Department?

10. How much manufacturing overhead was applied from the Molding Department to Job P and how much was applied to Job Q?

11. How much manufacturing overhead was applied from the Fabrication Department to Job P and how much was applied to Job Q?

12. If Job P included 20 units, what was its unit product cost?

13. If Job Q included 30 units, what was its unit product cost?

14. Assume that Sweeten Company used cost-plus pricing (and a markup percentage of 80% of total manufacturing cost) to establish selling prices for all of its jobs. What selling price would the company have established for Jobs P and Q? What are the selling prices for both jobs when stated on a per unit basis assuming 20 units were produced for Job P and 30 units were produced for Job Q?

15. What was Sweeten Company’s cost of goods sold for March?


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In: Accounting