Walkenhorst Company’s machining department prepared its 2019 budget based on the following data:
| Practical capacity | 40,000 | units | |
| Standard machine hours per unit | 2 | ||
| Standard variable factory overhead | $3.00 | per machine hour | |
| Budgeted fixed factory overhead | $ | 368,000 | |
The department uses machine hours to apply factory overhead to production. In 2019, the department used 88,000 machine hours and incurred $636,000 in total manufacturing overhead cost to manufacture 43,000 units. Actual fixed overhead cost for the year was $380,000.
Required:
Determine for the year:
1. The fixed, variable, and total factory overhead application rates (per machine hour). (Round your answers to 2 decimal places.)
2. The total flexible budget, for factory overhead cost based on output achieved in 2019.
3. The production volume variance. State whether this variance was favorable (F) or unfavorable (U).
4. The total overhead spending variance. State whether this variance was favorable (F) or unfavorable (U).
5. The overhead efficiency variance. State whether this variance was favorable (F) or unfavorable (U).
6. The variable overhead spending variance and the fixed overhead spending variance. State whether each variance is favorable (F) or unfavorable (U).
In: Accounting
3) Training Programs, Revisited As part of a quality improvement initiative, Consolidated Elec- tronics employees complete a three-day training program on teaming and a two-day training program on problem solving. The manager of quality improvement requested that at least 10 training programs on teaming and at least 10 training programs on problem solving be offered during the next six months. In addition, senior-level management specified that at least a total of 25 training programs must be offered during this period. Consolidated Electronics uses a consultant to teach the training programs. During the next six months, the consultant has 64 days of training time available. Each training program on teaming costs $12,000 and each training program on problem solving costs $6,000.
(a) How many training programs of each type should be offered? What would be the total cost of this? (3 points)
(b) Would the optimal number of training programs for each type change if the cost of problem solving trainings went up by $5000? Why or why not? (2 points).
(c) If management decided to relax the total number of trainings necessary by 3 to only 22 total trainings, what would you expect the reduction in cost to be? (2 points)
In: Accounting
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You work for Thunderduck Custom Tables Inc. This is the first month of operations. The company designs and manufactures specialty tables. Each table is specially customized for the customer. This month, you have been asked to develop and manufacture two new tables for customers. You will design and build the tables. This is a no nail, no screw, and no glue manufacturing ( no indirect materials used). You will be keeping track of the costs incurred to manufacture the tables using Job #1 Cost Sheet and Job #2 Cost Sheet. |
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| The cost of the direct materials that can be used to manufacture the table are as follows. These cost are on a per unit basis. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Table Top | $1,400.00 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Table Leg | $400.00 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Drawer | $340.00 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| The company uses a job order costing system and applies manufacturing overhead to jobs based on direct labor hours. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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The company estimates that there will be 12 direct labor hours worked during the month.
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| The estimated manufacturing overhead cost for the month is: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| a. | Factory supervisor salary per month | $4,500.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| b. | Rent for the factory per month | $900.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| c. | Depreciation of factory equipment per month | $600.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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What is the predetermined manufacturing overhead rate?
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Total Estimated manufacturing overhead |
$6,000.00 |
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In: Accounting
During the month of August, Shelly sold 26 units and reports the following inventory and purchase information:
| Date | Explanation | Units | Unit Cost | Total Cost |
| August 1 | Beginning inventory | 12 | $250 | $3,000 |
| August 13 | Purchase | 13 | 300 | 3,900 |
| August 22 | Purchase | 10 | 310 | 3,100 |
| August 29 | Purchase | 20 | 320 | 6,400 |
In: Accounting
MEMBED Ltd has been in business for the past 20 years. In the last meeting of the Board of Directors, it was proposed that a cost accounting system be established and a Cost Accountant employed. However, the Managing Director disputed this proposal on the grounds that there is no need for a cost accounting system. He also argued that there is no need for a Cost Accountant as the Accountant of the company is enough for all accounting functions. You are a trainee accountant who has just joined the company as an intern. Required: Write a report to the MD explaining what a cost accounting system is and discuss the argument by the Managing Director. (Total 20 marks)
In: Accounting
Crane Company uses a periodic inventory system. For October,
when the company sold 1,690 units, the following information is
available.
| Units | Unit Cost | Total Cost | ||||
|---|---|---|---|---|---|---|
| October 1 inventory | 580 | $22 | $12,760 | |||
| October 8 purchase | 1,160 | 23 | 26,680 | |||
| October 25 purchase | 580 | 26 | 15,080 | |||
| 2,320 | $54,520 |
Compute the October 31 inventory and the October cost of goods sold
using the FIFO method.
| Ending inventory | $enter the ending inventory in dollars | |
|---|---|---|
| Cost of goods sold | $enter the cost of goods sold in dollars |
In: Accounting
During 2021, a company sells 500 units of inventory for $88
each. The company has the following inventory purchase transactions
for 2021:
| Date | Transaction | Number of Units |
Unit Cost |
Total Cost | |||||||||
| Jan. | 1 | Beginning inventory | 73 | $ | 78 | $ | 5,694 | ||||||
| May | 5 | Purchase | 262 | 79 | 20,698 | ||||||||
| Nov. | 3 | Purchase | 184 | 81 | 14,904 | ||||||||
| 519 | $ | 41,296 | |||||||||||
Calculate cost of goods sold and ending inventory for 2021 assuming
the company uses the weighted-average cost method.
Cost of goods sold:?
ending inventory:?
In: Accounting
Sheffield Skateshop Ltd. reports the following inventory transactions for its skateboards for the month of April. The company uses a perpetual inventory system. Date Explanation Units Unit Cost Total Cost Apr. 1 Beginning inventory 30 $54 $1,620 6 Purchases 15 46 690 9 Sales (35 ) 14 Purchases 20 43 860 20 Sales (25 ) 28 Purchases 20 32 640 (a) Determine the cost of goods sold and cost of ending inventory using FIFO. Cost of Goods Sold $ Ending Inventory $
In: Accounting
The following amounts were selected from the production report of Chandelier Limited: Actual units in production 42 000 Equivalent units (materials) 42 000 Equivalent units (conversion cost) 39 000 Cost per equivalent unit (materials) R1.10 Cost per equivalent unit (conversion cost) R0.90
Chandelier Limited uses the weighted average method in preparing its production reports. Chandelier Limited's total production cost to be accounted for is: (2) a. R81 300 b. R84 000 c. R89 100 d. R72 900
In: Accounting
SimpsonSimpson Company's inventory records for the most recent year contain the following data:
Quantity Unit Cost
Beginning inventory 2,000 $8.00
Purchases during year 18,000 $10.00
Simpson Company sold a total of 19,800 units during this year.
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1. Using the average- cost method, compute the cost of goods sold and the ending inventory of the year. 2. Using the FIFO method, compute the cost of goods sold and the ending inventory of the year. 3. Using the LIFO method, compute the cost of goods sold and the ending inventory of the year |
In: Accounting