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8/19/2019 Post Midterm chapters Hilton answers (1).xlsx
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P5-46 1. Unit manufacturing costs:
Predetermined overhead rate $ 32
Standard
Total cost $ 157
2. Activity-based overhead application rates:
Application
Activity Rate
Order processing $ 3
!achine processing $ 14
Prod"ct inspection $ #
Standard Enhanced
irect material $ 25 $ 4
irect la%or 36 4&
Activity Overhead 12 11
Total cost $ 1&1 $ 1#&
ost Activity
P5-47 !river ost for
"uantity for #roduct
Activity #roduct $ine $ine
!achine 5' $ 135'
(elated 4&' 12#'6
17' 45'#
115' $ 31'5
!aterial 4 $ 21'
)andling 4 21'
2 1'5
1 $ 52'5
P"rchasing 1 $ 25'
#6 24'14 26'
3 $ 75'
*et"p 4 $ 34'
4 34'
2 17'
1 $ &5'
+nspection 4 $ 1'
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4 1'
3 7'5
1'1 $ 27'5
*hipping 5 $ 3'
4 24'
2 12'
1'1 $ 66',ngineering 25 $ 12'5
2 1'
2 1'
65 $ 32'5
acility 5' $ 25'
4&' 24'
17' &5'
115' $ 575'
.rand Total $ 1'224'
P5-4# /"rrent O) system
+nchon P"san
irect material $35 $6
irect la%or 2 2
!an"0act"ring overhead 16 12
Total cost per "nit $215 $2
nder A/ +nchon P"san
irect material $35 $6
irect la%or 2 2
1&&5 14&
Total cost per "nit $2435 $1&4&
P5-52 1. %verhead to be assigned to &itrogen #lus order:
Activity ost #ool Assigned %
!achine set"ps $ 1'
!aterial handling 2'
!an"0act"ring set"p' machineprocessing' and o"tgoingshipments
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)aardo"s handling 1'
"ality control 75
Other overhead costs 5'
Total $ 45'75
2. %verhead cost per bo' of chemicals $ 4575
(. #redetermined overhead rate $ 3125
). %verhead to be assigned given a single predetermined over
a Total overhead assigned $ 15'625
% Overhead cost per %o $ 15625
P5-53 cost per "nit $ 2&25
*ee net sheet 0or 5-54
P5-55 the total contribution margin e'pected from the *! board is +
sing A/' the contri%"tion margin o0 * oard $2'557'1
P5-56 Traditional 8ona
"ll prod"ct cost $5
!ar9"p :3;< 15
*elling price $65
A/ cost $746
P5-57 see tet%oo9 0or sol"tion
P5-5#$1'31'
1% T"= *t"= "nit cost $2&
("= *t"= "nit cost $375
1 a
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>
>
3 T"= *t"= "nit cost $357("= *t"= "nit cost $34#&
P5-6 see sheet 2
irect-la%or rate? $&' per 1'ho"rs
$& perho"r
Overhead rate? $35' per 1'ho"rs
$35 perho"r
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Enhanced
$ 216
Activity
ost
per Unit
of #roduct
$ 27
324
45#
42
525
15
5
626
6&
&5
17
2
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25
75
6
6
12
25
25
1
5
6
&5
*ee net sheet 0or 5-5
erhead ost
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head rate:
,/,///.
!alaysian
$6
1&
$7&
$4&2
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Pro% 5-54
Activities 0raceable costs
*oldering #42
*hipments &6
"ality control 124
P"rchase orders #54
!ach po@er 576!ach *et"p 75
4&
ost per model Royal
irect !aterial 2336
irect a%or 16&
!achine "sage 2&&
!an"0act"ring O)
*oldering 231
*hipments 1634
"ality control 34&
P"rchase orders 54##
!ach po@er 4&
!ach *et"p 35
/O.* 4431#
ProBta%ility analysis Royal*ales 456
/O.* 4431#
.ross margin 12&1
.ross margin ; 2&1;
.ross margin per "nit 3225
, 5-5
2Allocation o0 administrative cost %ased on %illa%le ho
+n0 *ys services
illings 3&75
ess ? costs
Pro0essional sta= cost 13#5
Allocation o0 Admin cost 2124
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ProBt 35#6
ProBt ; #2&;
3Allocation %ased on A/
Activity /ost
*ta= *"pport 1&+n-ho"se comp"ting 1364
!isc oCce charges 256
+n0 *ys services
illings 3&75
ess ? costs
Pro0essional sta= cost 13#5
Allocation o0 Admin cost
*ta= *"pport 144+n-ho"se comp"ting &6
!isc oCce charges 124
ProBt 1316
ProBt ; 34;
/ase 5-6
Pdt .
1Target Price 2&65Act"al selling price 213
/"rrent prod"ct cost 1#1
ProBt 22
4 Percentage o0 (a@ materia Pdt .
(a@ material cost per "nit 35
Dol"me &
Total (! cost 2&
(a@ material cost ; 25;
5
Pdt .
irect material 35
irect la%or 16
!achine set"p 13
!achinery 3&2&
+nspection #&4
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!aterial handling 2734
,ngineering 15&
Total 1416&
Target price %ased on ne@ 21252
/"rrent selling price 213
ProBt %ased on A/ cost 7132
P5-66 DATA INPUT
Customer-Related Activities Cost Driver Base
Sales activity *ales visits
Order taking P"rchase orders
*pecial handling nits handled
Special shipping *hipments
Customer-Related Activities Krondor
Sales activity 16
Order taking 30
*pecial handling 800
Special shipping 9
Krondor Sales revenue $ 2'
Cost of goods sold #'
General selling costs 24'
General administrative costs 1#'
SOLUTION
1 Customer-!ro"ita#ilit$ anal$sis%
Krondor Sales revenue $ 2'
Cost of goods sold #'
Gross margin $ 11'
Selling and administrative costs
General selling costs ! "#$000
General administrative costs 1#'
Customer%related costs
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Sales activity &'
Order taking 3'
Special handling 4'
Special shipping #'
&otal selling and administrativ ! 103$000
Operating income ! '$000
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ost driver udgeted level ost driver rat
Eoo0 solder Foints 157 6
Eoo0 shipments 2 43
Eo o0 +nspections 775 16
Eo o0 orders 1#& 5
!ach ho"rs 1#2 3Eoo0 set"ps 3 25
&ova traditional meth
(oyal
4576 Eova
3#6
316&
711
6#66
#2
45
52&
4
1131
&ova Total1#& 2436
1131 15732
&4### &62&
42#3;
3&635####1
"rs
,- comm cons"l
2375
&55
12##6
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224
#2&;
Activity driver Allocation (ate
25 clients 7244 comp hrs 31
1 client transa 256
,- comm cons"l
2375
&55
3655&
1536
44&4
1&&&;
Pdt T Pdt G
25425 1432525425 2
16#5 #55
&475 145
Pdt T Pdt G
525 175
15 4
7&75 7 11375
6#; 6;
Pdt T Pdt G
525 175
12 &
11 66
4&3 7656
1575 525
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425 1313
23 474
16374 21575
24561 32362
25425 2
#51 -1575
Cost Driver Rate
$ 5
1
5
1'
&eist
12
4
6
1
&eist$ 123'&
62'
1#'
15'
&eist$ 123'&
62'
$ 61'&
! 19$000
15'
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6'
4'
3'
1'
! 8#$000
! (""$"00)
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per *H
per shipment
per inspection
per p"rchase order
per mach hrper set"p
d O)
4
44
4&
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*ee %elo@ 0or sol"tion to 14-44' 14-45 etc *ol"tions not in the same or
P 14-47 #S
Sales 3&'
3ariable costs 22&'
ontribution margin. 152'
/! (atio 4
1 4f 5all paper operation is closed .ainsIsavings
oss o0 contri%"tion 0rom GP
+ncrease in contri%"tion 0rom carpet 65
(emodeling cost
*aving in Bed cost 1&
oss o0 contri%"tion 0rom PJ*
+ncrease in Advertisement
&3
Eet gainI loss -12'&
, 14-4#
(elevant cost
P"rchased components
Assem%ly la%or
Daria%le man"0act"ring overhead
Total relevant cost
+t sho"ld p"rchase since p"rchase price 6& is less than relevant c
, 14-53
1 +ncremental cost o0 &1
irect material
irect la%or
Daria%le overhead
Total varia%le cost per "nit
P"rchase price
oss per "nit i0 p"rchasedoss per mach hr i0 p"rchased
2P"rchase price L"oted
irect material
irect la%or
Daria%le overhead
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Total varia%le cost
Eet %eneBt o0 ma9ing
!ach hrs per "nit
eneBt 0rom mach hr
est se& "nits o0 T7#
!ach hrs reLd
alance hrs
Eo o0 "nits o0 &1 that can %e made
Eo o0 "nits o0 &1 to %e p"rchased
3!aim"m price 0or &1
Daria%le cost o0 ma9ing
ied costs avoida%le per "nit
, 14-55
8aytellMs o=er - special order
*ale price
ess ? (elevant cost
irect material 62
irect la%or 42
Daria%le man"0act"ring cost 21
*elling commission 252
(elevant proBt
/onverting into standard model
*ale price
ess ? (elevant cost
irect material 2&5
irect la%or 33
Daria%le man"0act"ring cost 165
*elling commission 125*ales disco"nt 125
(elevant proBt
*ell as is
*ale price
ess ? (elevant cost
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*ales disco"nt
8aytellMs co"nter o=er
(elevant cost
irect material 62
irect la%or 42Daria%le man"0act"ring cost 21
*elling commission
Add?minim"m contri%"tion reL"ired
*ale price
522N125N3;>
#7; 647
66713
, 14-51
(even"e 0rom 0"rther processing o0 (EA-2?
!Q-3
Pestrol
Total reven"e 0rom 0"rther processing
ess? (even"e 0rom sale o0 (EA-2+ncremental reven"e
ess?+ncremental cost
+ncremental proBt
, 14-57
!achine ho"rs reLd ept1
!7 5
T2& 4
1# 2 Total 2#
Availa%le 3
,cessIdeBciency 1
a%o"r ho"rs reLd ept1
!7 1
T2& 4
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1# 2
Total 34
Availa%le 37
,cessIdeBciency 3
!7
*elling price 1#6ess?Daria%le cost 13
/ontri%"ton P #3
/ontri%"ton per a% hr 31
in dept3
Prod"ction *ched"le "nits
T2& 4
1# 1
!7 25
/ase 14-63
-."age
nit selling price 2
nit man"0act"ring cost
irect material 31
irect a%or 4
Daria%le m0tg O) 45*hipping epenses 1
Total varia%le cost 126
/ontri%"tion 74
+ncrease in sales :"nits< 12
ecrease in sales :"nits<
+ncreaseI decrease in contri%"tion &&&
Additional cost 1*aving in cost
*egment /ontri%"tion net e=ect -112
/onti%"tion per la%or $ 1&5
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Pro% 14-44 1
nit cost i0 p"rchased 0rom o"tside s"pplier
+ncremental cost i0 man"0act"red?
irect !aterial
irect a%orDaria%le overhead
$16 - $1 per ho"r Bed
$32 - :2
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asic3 Total contri%"tion margin? $1'76'
ess? !ar9eting and advertising 13'
+ncome $1'63'
P 14-56
ATA +EPT
!onthly capacity
/"rrent prod"ction
Price per medal
Daria%le /osts
!an"0act"ringirect a%or
irect !aterial
!ar9eting
Total Daria%le /osts
ied /osts
!an"0act"ring
!ar9eting
Total ied /osts
Total /osts
Daria%le cost per "nit
ied cost per "nit
Average "nit cost
*pecial Order
The 0ollo@ing costs are not relevant to thedecision?
RSSSSSSS evelopment costss"n9
RSSSSSSS ied man"0act"ring overhead@ill %einc"rred regardless o0 @hich prod"ct isselected
RSSSSSSS *ales salariesidentical 0or %othprod"ctsRSSSSSSS !ar9et st"dys"n9
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25 medals ordered
$1 per medal
*OT+OE
nits prod"ced*ales
Daria%le costs?
irect la%or
irect material
!ar9eting
Total Daria%le /osts
ied /osts
!an"0act"ring
!ar9eting
Total ied /osts
Total /osts
+ncome %e0ore ta
/ost per "nits
Daria%le e
ied f
Average "nit cost g
a $175 75 "nitsb $1 25 "nits
c :$375 I 75 "
d :$2625 I 75 "
e Total varia%le cost
f Total Bed cost I "
g Total cost I "nits p
P14-4&
*elling price
irect material
irect la%or
Daria%le overhead
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/ontri%"tion margin per "nit
irect-la%or ho"rs reL"ired
/ontri%"tion margin per direct-la%or ho"r
(an9ing
P14-54
1 +ncremental "nit cost i0 p"rchased?
P"rchase price $15'!aterial handling $3'
Total $1&'
+ncremental "nit cost i0 man"0act"red?
irect material $U1'
!aterial handling 2
irect la%or &'
4'
Total $13'2
$U4'&
2
$4&':1 V $4'&' as comp"ted a%ove<
ess? rental reven"e 0rom idle space 25'
+ncrease in monthly cost $23'
3$52'
*avings in the cost o0 acL"iring H(63
4&'
Total varia%le cost
/ontri%"tionmargin
Daria%le man"0act"ring overhead :$12'V 1I3<
+ncrease in "nit cost i0 p"rchased :$1&' W$13'2<
+ncrease in monthly cost o0 acL"iring part H(63 i0 p"rchased
/ontri%"tion 0orgone %y not man"0act"ringalternative prod"ct
U:1 V $4'& as comp"ted in reL"irement 1
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$U4'
14-62 P"rchased
Tac9le
oes
*elling price $&6
ess?
!aterial -6&
irect la%or
!an"0act"ring overhead
:4<
/ontri%"tion margin $14
irect-la%or ho"rs per "nit /ontri%"tion per ho"r
/alc"lation o0 varia%le overhead per "nit?
Tac9le %oes?
irect-la%or ho"rs
Overhead per direct-la%or ho"r
/apacity
Total overhead
Total varia%le overhead
Daria%le overhead per ho"r
Daria%le overhead per %o
*9ate%oards?
irect-la%or ho"rs
Daria%le overhead
Prod"ction plan 175 s9ate %oard
1 tac9le %oes
Eet cost o0 "sing limited capacity to prod"cepart H(63
*elling and administrative costX
X+n calc"lating the contri%"tion margin' $6 o0 Bed overhead cost per "nit 0or0rom the selling and administrative cost
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+tem "antity
Total ho"rs
*9ate%oards 17'5
!a9e %oes 1'
"y %oes #'
Total contri%"tion
ess?/ontri%"tion 0rom man"0act"ring &' %oes
U :&' V $33<
+mprovement in contri%"tion margin
P14-45 Eet contri%"tion to proBt 34'5
Availa%le ho"rs 4'5
(eL"ired machine ho"rs :11' "nits 5< 5'5
P14-5 *avings i0 p"rchased $5'&
P14-52 +ncremental contri%"tion margin $42'#45
inear programming pro%lems not relevant 0or the eam
The optimal "se o0 *port@ayYs availa%ledirect-la%or ho"rs :)
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der as in the %oo9 %"t n"m%ered correctly
arpet 5#
46' 14'
322' 112
13&' 2&'
3 2
ossesI additional ep
2&'
124
34
25
#5'&
Total Per "nit
11' 11
3' 3
3' 3
71' 71
ost 71
375
45
225
15
135
-3-1
T7# &1
1125 135
225 375
4 45
2 225
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&25 15
3 3
25 3
12 1
2
21
7
4
15
4
145
6&4
14552
53&4&
625
13
522
52
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156
544
125
3;
522
23
23
46
3214
12
2
ept2 ept3 ept4
5 1 1
4 &
2 1 12# 2 2&
31 27 33
2 7 5
ept2 ept3 ept4
15 15 5
& &
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2 2 1
43 35 23
45 275 26
2 -75 3
T2& 1#
123 16773 #7
5 7
35
eptt 3
/P Total contri%"tion a% hrs reLd
5 2 nil
7 7 15
#3 2325 125
11325 275
,-."age (-."age
# 1&
17 5
2 6
3 64 1
71 1&
1#
5 iscontin"e
-#5
& 4
-15 4 13&
#5
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lender ,lectric !ier
2 3&
6 11
4 #
6
12
16 32
4 6
1 2
4
3
:
lender
prod"ction
5
2
3
15
2%lenders
15miers
%lenders
13miers
ic ,nhanced
$27 $35
$452
32
35
$#4 $132
$176 $21&
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,nhanced
$1'744'
2'
$1'544'
1medals per month
75medals per month
$ 175
$ 375'
$ 262'5
$ 1&7'5
$ &25'
$ 275'
$ 175'
$ 45'
$ 1'275'
$ 11
$ 6
$ 17
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/"rrent !onthly Prod"ction *pecial Order m%ined Prod"cti
75 25 1 $ 1'312'5a $25' b $ 1'562'5
$ 375' $ 125' c $ 5'
$ 262'5 $ &7'5 d $ 35'
$ 1&7'5 $ - $ 1&7'5
$ &25' $ 212'5 $ 1'37'5
$ 275' $ - $ 275'
$ 175' $ - $ 175'
$ 45' $ - $ 45'
$ 1'275' $ 212'5 $ 1'4&7'5
$ 37'5 $37'5 $ 75'
$ 11 $ &5 $ 1375
$ 6 $ - $ 45
$ 17 $ &5 $ 14&75
> $13125> $25
its< 25 "nits > $125
its< 25 "nits > $&75
"nits prod"ced > varia%le incremental cost per "nit
its prod"ced > Bed cost per "nit
od"ced > average cost per "nit
)ome el"e Pro!odel !odel !odel
$5& $65 $&
16 2 1#
1 15 2
&12
16
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$34$47
$55
$24
$1&
$25
)ome el"e Pro
!odel !odel !odel
$24 $1& $25
1 15 2
$24 $12 $125
1 3 2
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!an"0act"red
Tac9le *9ate-
oes %oards
$&6 $45
-17 -125-1&75 -75-625 -25
-11 :3<
$33 $1#5
125 5$264 $3#
$1&75 Z $15 > 125 ho"rs
$125 Z 125 > $1
$1' W $5' > $5'
$5' Z 1' > $5
$5 V 125 > $625
$75 Z $15 > 5 ho"rs
$5 V 5 > $25
s
&' %oes V 125 > 1'ho"rs
1' ho"rs V $1 per ho"r >$1'
istri%"tion m"st %e ded"cted
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) Total alance nit Total
per ) o0 /ontri- /ontri-
nit ) %"tion %"tion
1'
5 &'75 1'25 $1#5 $341'25
125 1'25 33 33'
14 126'
$5'25
264'
$236'25
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on
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,#-25
SOLUTION
1 Cas' collections in Octo#er%
(ont'o" Sale
H"ly
A"g"st
*eptem%er
Octo%er
Total
) Cas' collections in *t' +uarter "rom credit sales in *t' +uarter%
(ont' o" Sale
Octo%er
Eovem%er
ecem%er
Total
Total collections in 4th L"arter
0rom credit sales in 4th L"arter
,#-31 SOLUTION
1 Direct !ro"essional la#or #ud,et sc'edule "or t'e mont' o" une%
Office visits per month
Pro"essional services in une%
1%hour visits "*+
1," hour visits '*+
&otal direct professional la-or
.ourly rate for dental associates
&otal direct professional la-or cost
) Cas' collections durin, une "or !ro"essional services rendered durin, (a$ and une%
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1," hour visits
/illing rate
&otal -illings for 1,"%hour visits
1%hour visits/illing rate
&otal -illings for 1%hour visits
&otal -illings during the month
ercentage of months -illings collected during 2une
Collections during 2une
&otal collections in 2une
. Over'ead and administrative e/!ense #ud,et sc'edule "or t'e mont' o" une%
atient registration and records
Other overhead and adminstrative epenses
&otal overhead and adminstrative epenses
P#-32 SOLUTION
1 Com!lete sales #ud,et sc'edule%
Sales #ud,et%
Sales (in sets)
Sales price per set
Sales revenue
) Com!lete !roduction #ud,et sc'edule%
Production #ud,et%
Sales
4dd 5esired ending invent
&otal reuirements
7ess roected -eginning i
lanned production
. Com!lete ra0-material !urc'ases sc'edule%
Ra0- material !urc'ases%
lanned production (sets)
a: material reuired per
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a: material reuired for p
4dd 5esired ending invent
in -oard feet (10+ of net
&otal reuirements
7ess roected -eginning i
material$ in -oard feet (10
months reuirement)lanned purchases of ra:
Cost per -oard foot
lanned purchases of ra:
* Com!lete direct-la#or #ud,et sc'edule%
Direct-la#or #ud,et%
lanned production (sets)
5irect%la-or hours per set
5irect%la-or hours reuiredCost per hour
lanned direct%la-or cost
,#-24 Prod"ction :in "nits< reL"ired 0or the year?
*ales 0or the year 4&'
5'
&'
(eL"ired prod"ction d"ring the year 45'
2
1''
Add? esired ending inventory on ecem%er 31 45'
ed"ct? eginning inventory on Han"ary 1 35'
(eL"ired ra@-material p"rchases d"ring the year 1'1'
,#-26
1The total reL"ired prod"ction is 655'72 "nits' comp"ted as 0ollo@s?
Add? esired ending Bnished-goods inventory onecem%er 31
ed"ct? eginning Bnished-goods inventory on Han"ary 1
P"rchases o0 ra@ material :in "nits
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2Total ra@-material p"rchases d"ring third L"arter $2'645'
, #-27
!onth
H"ne
H"ly
A"g"st
Total
2 inghamton ilm /orporation
,pected /ash is%"rsements
A"g"st
H"ly p"rchases to %e paid in A"g"st $54'
ess? 2; cash disco"nt 1'&
Eet $52'#2
/ash dis%"rsements 0or epenses 14'4
Total $67'32
,#-32 Prod"ction and direct-la%or %"dgets
*pi=y *hades /orporation
"dget 0or Prod"ction and irec
or the irst "arter o0 2
Han"ary
*ales :"nits< 1'
Add? ,nding inventory 16' Total needs 26'
ed"ct? eginning inventory 16'
nits to %e prod"ced 1'
irect-la%or ho"rs per "nit VU UUUU1
Total ho"rs o0 direct la%or
time needed 1'
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irect-la%or costs?
$16'
Pension contri%"tions
:$5 per )< 5'
Gor9ersM compensationins"rance :$2 per )< 2'
,mployee medical ins"rance
:$& per )< &'
,mployerMs social sec"rity
:at 7;< 11'2
Total direct-la%or cost $1&6'2
1 percent o0 the Brst 0ollo@ing monthMs sales pl"s 5 percent o0 the second 0
,#-32
*pi=y *hades /orporation
!an"0act"ring Overhead "dget
or the irst "arter o0 21
Han"ary
*hipping and handling $2'
3'
Other overhead 7'
Total man"0act"ring overhead $12'
, #-34
Han"ary
Total cash collections $11'
Han"ary
Gages :$16 per )
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Total cash dis%"rsements $116'
Han"ary
/ash ecess :deBciency< %e0ore Bnancing $5'
inancing?
orro@ing to maintain $2' %alance 15'
oan principal repaid
oan interest paid
,nding cash %alance $2'P#-3# Prod"ction %"dget
[are
*ales 0or 22 6'
Add? +nventory' 12I31I2
:& \ 23 sales< 5'2
Total reL"ired 65'2
ed"ct? +nventory' 12I31I1
:& \ 22 sales< 4'&
(eL"ired prod"ction in 22 6'4
/onversion cost %"dget
/onversion ho"rs reL"ired? [are :6'4 \ 7< 4'22&
arol :3#'6 \ 1< 3'#6
Eore :25'4 \ 16< 4'64
Total ho"rs 12'252
/onversion cost %"dget :12'252 \ $2< $245'4
[are :6'4 \ 1< 6'4arol :3#'6 \ 7< 27'72
Eore :25'4 \ 5< 12'7
*"%total 1'&2
1'&2
*"%total 11'#2
ed"ct? +nventory' 1I1I2 :1' \ 1< 1'
3SSSSSSSSSSSSSSSSS /ash %"dget?
"antity o0 +slin reL"ired 0or prod"ction in 22:in gallons
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(eL"ired p"rchases :gallons< 1'#2
$54'51
22 prod"ction reL"irements?Philin :1'&2 \ $5 \ 12< $64'#2
+slin :1'&2 \ $5< 54'1
+ncrease in cost o0 ra@ material $1'&2
Philin :12'252 \ $2 \ #< $22'536
+slin :12'252 \ $2< 245'4
ecrease in conversion cost :$24'54<
Eet increase in prod"ction cost $76'316
P#-4
1 *ales %"dget 0or 2?
nits
ight coils 6'
)eavy coils 4'
ProFected sales
pro%lem #-4 :contin"ed<
2
ProFected sales
Add? esired inventories'
ecem%er 31' 2
Total reL"irements
ed"ct? ,pected inventories' Han"ary 1' 2Prod"ction reL"ired :"nits<
3
P"rchases %"dget :1'#2 gallons \ $5 pergallon<
/hange in material cost 0rom s"%stit"ting Philin0or +slin?
/hange in conversion cost 0rom s"%stit"tingPhilin 0or +slin?
Prod"ction %"dget :2?
(a@-material p"rch:in L"antities< 0or 2
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ight coils :65' "nits proFected
to %e prod"ced<
)eavy coils :41' "nits proFected
to %e prod"ced<
Prod"ction reL"irements
Add? esired inventories' ecem%er 31' 2
Total reL"irements
ed"ct? ,pected inventories'
Han"ary 1' 2
P"rchase reL"irements :"nits<
4(a@-material p"rch
(a@ !aterial
*heet metal
/opper @ire
Plat0orms
Total
5 irect-la%or %"dget
ight coils
)eavy coils
Total
6 !an"0act"ring overhead %"dget 0or 2?
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P"rchasing and material handling 725'
epreciation' "tilities' and inspection 16'
*hipping 1'.eneral man"0act"ring overhead 253'
Total man"0act"ring overhead
etailed sol"tion to P#-45 is attached as a separate Ble
/ost river"antity
a725' > 46#' N 256' :0rom reL 3<%16' > 65' N 41' :0rom reL 2<c1' > 6' N 4' :total "nits sold' 0rom pro%lem<d253' > 13' N 123' :0rom reL 5
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Amount Collected in Octo#er Sales Collected Collection
$ 6' 4 2'4
7' 1 7'
&' 15 12'
#' 7 63'
&4'4
Amount Collected
Credit
Sales Octo#er Novem#er Decem#er
$ #' $ 63' $ 13'5 $ #'
1' 7' 15'
&5' 5#'5
$ 63' $ &3'5 $ &3'5
$ 23'
; #8$000 , 1"
; #$000
#$000 1 hr< ; 1$000
#$000 1," hr< ; 1$*00
"$*00
! 60
! 1*0$000
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(a$
#$000 '*+ ; 3$000
! #0
1"0$000
#$000 "*+ ; 1$000! '0
! '0$000
! 190$000
10+
! 19$000
! 19$000 = ! 1'1$000 ;
#$000 visits ! ">> ! *0
! *00$000 ! 600$000 ! '*0$000
A!ril (a$ une
10$000 1"$000 1*$000
ory "$#00 3$000 3$000
1"$#00 1*$000 18$000
nventory "$000 "$#00 3$000
10$#00 1"$600 1*$000
A!ril (a$ une
10$#00 1"$600 1*$000
et (-oard feet) 0 >>> 0
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roduction (-oard feet) "$080 "$*"0 3$000
ory of ra: material$
onths reuirement) "*" 300 16$000
"$33" "$8"0 19$000
nventory of ra:
of current
"08 "*" 300aterial (-oard feet) "$1"# "$*68 18$'00
! "*0>> ! "*0> 1> ! ""
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inghamton ilm /orporation
,pected /ash /ollections
A"g"st
*ales Percent
$6' #; $5'4
7&' 2; 15'6
66' 7; 46'2
$67'2
a%or
1
!onth
e%r"ary !arch "arter
12' &' 3'
12'5 13'5 13'524'5 21'5 43'5
16' 12'5 16'
&'5 #' 27'5
VUUUUU1 VUU U75
&'5 6'75 25'25
,pected/ollections
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$136' $1&' $44'
4'25 3'375 12'625
1'7 1'35 5'5
6'& 5'4 2'2
#'52 7'56 2&'2&
$15&'27 $125'6&5 $47'155
llo@ing monthMs sales
!onth
e%r"ary !arch "arter
$24' $16' $6'
25'5 27' &2'5
5#'5 47'25 176'75
$1#' $#'25 $31#'25
e%r"ary !arch
$16'5 $17#'
e%r"ary !arch
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$121' $173'
e%r"ary !arch
$5#'5 $5'3
-15'
$44'3 $5'3
arol Eore
4' 25'
2'& 2'4
42'& 27'4
3'2 2'
3#'6 25'4
:2
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Price Total
$12 $7'2'
17 6'&'
$14''
ight /oils )eavy /oils
6' 4'
25' #'
&5' 4#'
2' &'65' 41'
n "nits< 0or
ses %"dget?
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(a@ !aterial
*heet /opper Gire
!etal Plat0orms
26' 13' ]]
25' 123' 41'
465' 253' 41'
36' 32' 7'
51' 2&5' 4&'
32' 2#' 6'
46#' 256' 42'
ses %"dget 0or 2?
(a@ !aterial (eL"ired :"nits< Anticipated P"rchase Price
Total
46#' $16 $7'54'
256' 1 $2'56'
42' 3 $126'
$1'1#'
0or 2?
ProFected )o"rs
Prod"ction per Total )o"rs
:"nits< nit (ate65' 2 13' $15
41' 3 123' 2
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"dgeted /ost
$55 $3#&'75
$4 $424'
$1 1'$3 $75#'
$1'6&1'75
/ost river(ate
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hours
hours
hours
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une
3$000
! #0
1"0$000
1$000! '0
! '0$000
! 190$000
90+
! 1'1$000
! 190$000
! 8$000
1*$000
! "3$000
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72/180
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Total
/ost$1'#5'
2'46'
$4'41'
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E' 1/-26Standard !irect labor:
"antity
(ate
Actual data:
!aterial p"rchasesPrice
Act"al costs inc"rred in the prod"ction o0?
irect la%or?
irect material?
S%$U04%&
1. !irect-material price variance
!irect-material 7uantity variance
* >
!irect-labor rate variance
A( >
!irect-labor rate variance
*) >
#1/-)2
/ontrol valves man"0act"red in Han"ary?
Actual costs:
irect la%or
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irect material p"rchased
irect material "sed
Standard prime costs:
irect material
irect la%or
*tandard prime cost per "nit
S%$U04%&
18 Schedule of standard production costs, based
irect material
irect la%or
Total standard prod"ction costs
28 3ariances:
a8 !irect-material price variance
b8 !irect-material 7uantity variance
* >
c8 !irect-labor rate variance
d8 !irect-labor e=ciency variance
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*) >
#1/->/
a%or /lass +++a%or /lass ++
a%or /lass +
a%or /lass +++
a%or /lass ++
a%or /lass +
S%$U04%&
18 3ariances ?U denotes unfavorable@ ; denotes f
a8 !irect-labor rate variance for each labor class:
$abor lass
+++++
+
Total
b8 !irect-labor e=ciency variance for each labor
$abor lass
+++
+++
Total
E'ercise 1/-(
.iven AprilMs o"tp"t o0 prod"ction
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!irect $abor !irect <
*tandard price or rate per "nit o0 inp"t $2 p
*tandard L"antity per "nit o0 o"tp"t 4 hrs
Act"al L"antity "sed per "nit o0 o"tp"t
irect-material L"antity variance
irect-la%or rate variance $ 35'
#1/-)(
!irect
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"uantity variance:
Standard 7uantity
Actual 7uantity
hours ' +C.//DDDDDDDDD
!irect-labor rate varianceDDDDDDD
E=ciency variance:
Actual hours used ' standard rate
1> hours ' +C.//DDDDDDDDD.
Standard hours allo9ed ' standard rate
!irect-labor e=ciency varianceDDDD.
2( hours ' >> clients ' applications
0otal variance
#1/-)
Prod"ction
Actual costs:
irect la%or
irect material p"rchased
irect material "sed
Standard prime costs:
irect materialirect la%or
*tandard prime cost per "nit
S%$U04%&
irect material
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irect la%or
Total standard prod"ction costs
28 3ariances:
a8 !irect-material price variance
b8 !irect-material 7uantity variance
* >
c8 !irect-labor rate variance
d8 !irect-labor e=ciency variance
*) >
#1/-)6
Prod"ction
Actual costs:
irect la%or
irect material p"rchased
irect material "sed
Standard prime costs:
irect materialirect la%or
*tandard prime cost per "nit
S%$U04%&
irect material
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irect la%or
Total standard prod"ction costs
28 3ariances:
a8 !irect-material price variance
b8 !irect-material 7uantity variance
* >
c8 !irect-labor rate variance
d8 !irect-labor e=ciency variance
*) >
#1/->irect-la%or rate variance
$3'76 ^ 36'5 ho"rs
irect-la%or eCciency variance
*tandard allo@ed direct-la%or ho"rs?
/ompleted "nits
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Partially completed
"nits
Total standard
ho"rs allo@ed
Act"al L"antity o0 material "sed?
irect-material L"antity variance
AQ
*tandard L"antity o0 material allo@ed?
/ompleted "nits
Partially completed
"nits
Total standard
L"antity allo@ed
d Act"al price paid per 9ilogram o0 direct material?
e irect-material and direct-la%or cost trans0erred to Bnis
0 irect-material and direct-la%or cost in Eovem%er 3 %
There0ore? $5: AQ W 51'2<
AQ W 51'2
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ase 1/-2
1*tandard cost o0 lots 22' 23' and 24?
ot
22
2324
*tandard cost o0 prod"ction
*tandard material cost pl"s & percent o0 standard co
$264 N :&;
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*tandard yards?
oes in lot
*tandard yards
per %o
Total standard
L"antityAct"al yards "sed
Dariance in yards
*tandard price
irect-material
L"antity variance
Parentheses denote 0avora%le variance
*tandard rate
irect-la%or
eCciency variance
Parentheses denote 0avora%le variance
irect-la%or rate variance?
Act"al ho"rs @or9ed
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(ate paid in ecess o0 standard
:$15 W $147<
Dariance
+gnore the Fo"rnal entries
+nterpret the variances as 0avo"ra%le and "n0avo"ra%leo not "se MNM or M-M signs
tet%oo9s "ses the 0orm"la di=erently 0rom @hat is dis
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Standard !irect material:
25 ho"r "antity 4
$ 16 per ho"r Price $ &
24' 9ilograms $ &1 per 9ilogram
5' "nits @ere as 0ollo@s?
$ 211'# 0or 13' ho"rs
$ 17'1 0or 21' 9ilograms
F #" ' ?A#
> 24' $ &1
> $ 2'4 n0avora%le
F S# ' ?A"
> $ & 21'
> $ &' n0avora%le
2' 9gs > 5' "nits
F A* ' ?AR> 13' $ 163
> $ 3'# n0avora%le
$ 211'# I $ 13' > $ 163
F SR ' ?A*
> $ 16 13'
> $ &' n0avora%le
12'5 hrs > 5' "nits
7'&
4'1 hr at $ 146
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12'5 l% at $ 26
11'55 l%
2 l%s at $ 5 per l%
5 hrs at $ 15 per hr
on actual production of ,6// units:
&e9 ersey 3alve ompany
amden #lant
Schedule of Standard #roduction osts
ased on ,6// Units
;or the $ :3'< avora%le
> ?A" ' S#8 -
> 11'55 $ 5 -
> :75< avora%le
7'& "nits 2 l%s per "nit
F ?A* ' AR8 -> 4'1 $ 146 -
> :16'4< avora%le
F ?A* ' SR8 -
> 4'1 $ 15 -
> 16'5 n0avora%le
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7'& "nits 5 hrs per "nit
Standard Standard
!irect-$abor !irect-$abor *ours
Rate per *our Allo9ed, Given April %utput
$ 16 514 5
1 5
Actual Actual
!irect-$abor !irect-$abor
Rate per *our *ours
$ 172 55
15 65
1& 375
avorable8:
Actual Standard !iHerence Actual Rate
Rate Rate in Rates *ours 3ariance
$ 172 $ 16 $ 12 55 $ 6615 14 1 65 $ 65
1& 1 & 375 $ 3
$ 1'61
class:
Actual Standard !iHerence Standard E=ciency
*ours *ours in *ours Rate 3ariance
55 5 5 $ 16 $ &
65 5 15 14 $ 2'1375 5 :125< 1 $ :1'25<
$ 1'65
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aterial
r hr
per "nit 275 l%s per "nit
3 l%s per "nit
$2'
4nitial Unit
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))//
+(,C//
)2/ avo"ra%le
16C.>
1,)6>.//
)12.>/ n0avo"ra%le
+1,)6>.//
1,C6/.//
+)C>.// avo"ra%le
$&525
#'5
2'# hr at $ 16
22'5 l% at $ 154
22'5 l%
2 l%s at $ 176 per l%26 hrs at $ 14 per hr
#'5 "nits 2 l%s $ 176
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#'5 "nits 3 hrs $ 14
F ?#" ' A#8 -
> 22'5 $ 154 -> $ :4#'5< avora%le
> ?A" ' S#8 -
> 22'5 $ 176 -
> 44'&& n0avora%le
#'5 "nits 2 l%s per "nit
F ?A* ' AR8 -
> 2'# $ 16 -
> 41'& n0avora%le
F ?A* ' SR8 -
> 2'# $ 14 -
> :53'2< avora%le
#'5 "nits 3 hrs per "nit
1#'
5' hr at $ 756
16' l% at $ 1#
142'5 l%
& l%s at $ 175 per l%25 hrs at $ & per hr
1#' "nits & l%s $ 175
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1#' "nits hrs $ &
F ?#" ' A#8 -
> 16' $ 1# -> $ 24' n0avora%le
> ?A" ' S#8 -
> 142'5 $ 175 -
> :16'625< avora%le
1#' "nits & l%s per "nit
F ?A* ' AR8 -
> 5' $ 756 -
> :2'2< avora%le
F ?A* ' SR8 -
> 5' $ & -
> 2' n0avora%le
1#' "nits hrs per "nit
>
> :36'5 V $&24< W :36'5 V $&2<
> $1'46 n0avora%le
>
> :36'5 V $&2< W :37'2 V $&2<
> $5'74 avora%le
5'6 "nits V 6 ho"rs per "nit 33'6 ho"rs
(AH ´ AR) W(AH ´ SR)
(AH ´ SR) W(SH ´ SR)
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& "nits V 75; V 6 ho"rs per "nit
>>
>
> $1'5
> 3
>
Act"al price > $24#'25I5'
> $4#&5 per 9ilogram
hed goods?
irect-material
cost trans0erred 5'6
irect-la%or
cost trans0erred 5'6 " Total cost trans0erred
lance o0 Gor9-in-Process +nventory?
irect material & "nits V $4 per "nit
irect la%or & "nits V 75; V $4#2
3'6 ho"rs
37'2 ho"rs
(AQ ´ SP) W: AQ V $5<
$1'5n0avora%le
51'5
5'6 "nits V & 44'&
& "nits V & 6'4
51'2
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Total cost in ending
Gor9-in-Process +nventory
,"ropean *tyles' +nc
*tandard /ost o0 Prod"ction
or Eovem%er
*tandard /ost per
"antity :%oes<
1'
1'71'2 #4&
t o0 la%or and overhead?
$16'4
14'5
$ U 1'#
,"ropean *tyles' +nc
irect-!aterial and irect-a%or Dariances
or Eovem%er
ot no
22 23
$165
165
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1' 1'7
VUU24 VUUU24
24' 4'&24'1 4'44
1 -36
V$11 V $11
$U11 $U:3#6<
ot no
22 23
irect-la%or eCciency variance?
*tandard ho"rs?
oes in lot 1' 1'7
*tandard ho"rs
per %o VUU 3 VUU 3
Total 3' 5'1
Total standard ho"rs 3' 5'1
Act"al ho"rs @or9ed 2'#& 5'13
Dariance in ho"rs -2 3
:$2#4< $441
ot no
22 23 2
2'#& 5'13 2'
Percentage o0
completion
V 1;U U V 1;
V$147 V$147
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$ $1'53# $&67
"ssed in class
V$ 3 V$ 3 V$ 3
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9ilograms
per 9ilogram
- S#8
- $ &
- S"8
- 2'
4 9gs per "nit
- SR8- $ 16
- S*8
- 12'5
25 hrs per "nit
"nits
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$ 75
75
$ &25
Standard
osts
> $ 5&'5
> $ 5&5'
$ 643'5
?#" ' S#812'5 $ 5
?S" ' S#8
11'7 $ 5
> 11'7 l%s
?A* ' SR8 4'1 $ 15
?S* ' SR8
3#' $ 15
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> 3#' hrs
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25
525
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"nits
$ 36#6364
$ 7336
Standard
osts
> $ 351'12
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> $ 345'&
$ 6#6'#2
?#" ' S#8
22'5 $ 176
?S" ' S#8
1#'#5 $ 176
> 1#'#5 l%s
?A* ' SR8
2'# $ 14
?S* ' SR8
24'7 $ 14
> 24'7 hrs
"nits
$ 142
$ 16
Standard
osts
> $ 266'
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> $ 3&'
$ 34'
?#" ' S#8
16' $ 175
?S" ' S#8
152' $ 175
> 152' l%s
?A* ' SR8
5' $ &
?S* ' SR8
4'75 $ &
> 4'75 hrs
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"nits V $4 $224'
its V $4#2 275'52$4##'52
$32'
2#'52
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$61'52
o Total *tandard /ost
$16'5
1&1'51&'576
$3#6'126
24 Total
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1'2 3'#
V UU24 V UU 24
2&'& #3'62&'&25 #3'365
25 -235
V$11 VU$11
$275 :$25&5<
24 Total
1'2
VUU 3
3'6
2'&& 1'#&
2' 11'
1 2
$147 $2#4
Total
11'
VU&;
V$147 V$147
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$3'3
V$ 3
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EB-11-2
Act"al o"tp"t
Act"al varia%le overhead :Act"al DO)<
Act"al Bed overhead :act"al O)<
Act"al machine time
*tandard varia%le-overhead rate*tandard L"antity o0 machine ho"rs
"dgeted Bed overhead :%"dgeted O)<
"dgeted o"tp"t
*OT+OE
1< Daria%le-overhead spending variance
2< Daria%le-overhead eCciency variance
3< ied-overhead %"dget variance
Act"al o"tp"t
Act"al varia%le overhead :Act"al DO)<
Act"al Bed overhead :act"al O)<
Act"al la%o"r ho"rs
*tandard varia%le-overhead rate
*tandard L"antity o0 la%o"r ho"rs
"dgeted Bed overhead :%"dgeted O)<"dgeted o"tp"t
*OT+OE
1< Daria%le-overhead spending variance
*) >
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2< Daria%le-overhead eCciency variance
3< ied-overhead %"dget variance
E'11-(/ *tandard machine ho"rs per "nit o0 o"tp"t
*tandard varia%le-overhead rate per machine ho"r
Act"al varia%le-overhead rate per machine ho"r
Act"al machine ho"rs per "nit o0 o"tp"t
"dgeted Bed overhead
Act"al Bed overhead
"dgeted prod"ction in "nits
Act"al prod"ction in "nits
Daria%le-overhead spending variance
Daria%le-overhead eCciency variance
ied-overhead %"dget variance
ied-overhead vol"me variance
Total act"al overhead
Total %"dgeted overhead :`ei%le %"dget<
Total %"dgeted overhead :static %"dget<
Total applied overhead
E' 11-(2 Daria%le-overhead spending variance
Daria%le-overhead eCciency variance
*) >
SH > 56' "nits V 5 ho"rs per "nit
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ied-overhead %"dget variance
"dgeted Bed overhead > 3' ho"rs V $12 per ho
ied-overhead vol"me variance
Applied Bed overhead > $12 per ho"r V 5 ho"rs per "n
E' 11-()
$115 > $13'5 ^ #'
*ales !argin vol"me variance is more relevant than sale
*ales !argin Dol"me variance> :Act"al *ales vol"me-
:#-1 $12' Z 1'
actual budgetedSales-price variance sales sales
price price
÷ ×
÷
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*OT+OE
1< Daria%le-overhead spending variance
2< Daria%le-overhead eCciency variance
3< ied-overhead %"dget variance
#11-( 1
:%"dgeted overhead per "nit at epected level o0o"tp"t
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nits sold
(even"e
Daria%le cost
/ontri%"tion margin
ied overheadied general and adminstrative cost
Operating income
nit costs?
irect material
irect la%or
varia%le overhead
varia%le selling costs
Total varia%le costs?
irect material
irect la%or
Daria%le overhead
Daria%le selling epenes
*OT+OE
1< lei%le %"dget 0or the month o0 !ay' %ased on 4'&
(even"e
ed"ct? Daria%le costs?
irect material
irect la%or
Daria%le overhead Daria%le selling
Total varia%le costs
/ontri%"tion margin
ed"ct? ied costs?
ied overhead
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ied general and administrative
Operating income
2< lei%le-%"dget variances are as 0ollo@s?
nits
(even"e
Daria%le costs
irect material
irect la%or
Daria%le overhead
Daria%le selling
ed"ct? Total varia%le costs
/ontri%"tion margin
ied costs?
ied overhead
ied general and administrative
ed"ct? Total Bed costsOperating income
#11-)) /ase A
2
(
C
1/
$7a per ho"r
$#5% per ho"r
$#&'5c
$2'5 d
$3' e
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11
12
1(
1
1C
2/
#11-)C
/ontainers :cases< o0 0roen 0ood prod"ced
Act"al costs?
Daria%le overhead
ied overhead
Act"al la%or cost
Act"al material cost
*tandard costs per case?
irect la%or
irect material
Daria%le overhead
ied overhead
Ann"al %"dget in0ormation
Daria%le overhead
ied overheadPlanned activity 0or year
*OT+OE
irect-material price variance
$:42'< :Eegative
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AP
irect-material L"antity variance
*
irect-la%or rate variance
A(
irect-la%or eCciency variance
*)
Daria%le-overhead spending variance
Daria%le-overhead eCciency variance
ied-overhead %"dget variance
%"dgeted O)
1 *tandard machine ho"rs per "nit
2 Act"al cost o0 direct material per "nit
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( *tandard direct-material cost per machine ho"r
) *tandard direct-la%or cost per "nit
> *tandard varia%le-overhead rate per machine ho"r
Total %"dgeted overhead at 3' ho"rs
Total %"dgeted Bed overhead
*tandard Bed-overhead rate per machine ho"r
irst' comp"te act"al varia%le overhead as 0ollo@s?
Total act"al overhead
Total Bed overhead :given<
Total varia%le overhead
Daria%le-overhead spending variance
6 Daria%le-overhead eCciency variance
irst' contin"e "sing the high-lo@ method to determinetotal %"dgeted Bed overhead as 0ollo@s?
Total %"dgeted varia%le overhead at 3' ho"rs:3' V $11<
2,30,000-32,000
$627,000-$647,200=
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C ied-overhead %"dget variance
EB11->2 *ales price variance
Act"al sales price > $24'I5'
2 *ales vol"me variance
>
>
*ales !argin vol"me variance
>
>
E'11->(
*ales-Price
Dariance
"siness
(esidential
Total
*tandard allo@ed machine ho"rs > 6'2 "nits V 5
X"dgeted sales price > $3'I6'
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*ales-Dol"me
Dariance
"siness
(esidential Total
ase 11->)
1 Planned prod"ction > 5' "nits
The reasoning is as 0ollo@s?
:a<
:%<
2 Act"al prod"ction
( Act"al Bed overhead
ied overhead
%"dget variance
$3'25
There0ore' planned direct-la%or ho"rs (X) eL"als 1'
There0ore' act"al Bed overhead (X) eL"als $43'25
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4 Total standard allo@ed direct-la%or ho"rs
5 Act"al direct-la%or rate
irect-la%or rate variance
$&'&
6 *tandard varia%le-overhead rate
Daria%le-overhead eCciency variance
7 Act"al varia%le-overhead rate
$2'64
& *tandardirect-material L"antity variance
$6'
SQ
irect-material price variance
# standard Bed-overhead rate V standard allo@ed ho"rs
1 Applied Bed overhead
There0ore' AVR > $63 per hr
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11 ied-overhead vol"me variance
ase 11->> !aterial Price variance
Type o0 !aterial
/oo9ie mi
!il9 chocolate
Almonds
Total
!aterial L"antity variance
Type o0 !aterial
/oo9ie mi
!il9 chocolate
Almonds
Total
a%o"r rate variance
a%o"r eCciency variance Type o0 a%or
!iing
a9ing
Total
Daria%le-overhead spending varianceact"al varia%le overhead - :A) V *D(<
> $75' - :1'25'I6< V $324b
> $75'
Daria%le-overhead eCciency variance
Total act"al minutes o0 direct la%or
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> $324
> $54'
*ales-price variance
> :$7# - $&< V 45'
> $45'
Act"al sales price > $3'5
*"mmary o0 variances?
irect-material price variance
irect-material L"antity variance
irect-la%or rate variance
irect-la%or eCciency variance
Daria%le-overhead spending variance
Daria%le-overhead eCciency variance
*ales-price variance Total
> SVR: AH - SH<
SH > :3 min"tes per "nit' or po"nd V 45' "nits' or
1, 250, 000 3 450, 000
60 60
÷
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#'
$ 45'
$ 122'
4'5
$ #4
$ 12'
1'
> act"al DO) -
> $ 45' -
> $ 4'5 n0avora%le
> *D(
> $ #
> $ 4'5 n0avora%le
36' hrs > #'
> act"al O) -
> $ 122' -
> $ 2' n0avora%le
2'
$ 32'
$ ##'
5'
$ 61
2
$ 1'25'
> act"al DO) -
> $ 32' -
> $ 15' n0avora%le
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> *D(
> $ 61
> $ 61' n0avora%le
4' hrs > 2'
> act"al O) -
> $ ##' -
> $ :1'< avora%le
4 ho"rs
$&
U$5' U
25'
$72'U
$1#2'U
$15'U
$713'
$&16'
>
>
>
>
>
>
$#%
3d
$65'a
24'c
$2'g:positive<
$&1&'e
$&5'0
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> act"al Bed overhead W %"dget
> $3'75' W $3'6'
> $15'
r
> %"dgeted Bed overhead W app
> $3'6' W $3'36'
>
it V 56' "nits
act"al salesvol"me
vol"me varince
dgeted *ales vol"me< %"dgeted c/ontri%"tion
7 "n0avo"ara%le
&'
$ 511'5
$ &6'
165'
$ 3
2
$ #'
#'
$24' :positive
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> act"al DO) -
> $ 511'5 -
> $ 16'5 n0avora%le
> *D( > $ 3
> $ 15' n0avora%le
16' hrs > &'
> act"al O) -
> $ &6' -
> $ :4'< avora%le
66'
$3#6'
a@nmate /ompa
Operating (es"lts
or the !onth o0 !
U ×$6
$ UUUU15
6' U
&'&5UU
1&'3X
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!aster "dget Act"al
5' 4'&
$ 1'2' $ 1'152'
76' 7&'
$ 44' $ 372'
1&' 14' 135'
$ 12' $ 57'
$ 6
$ 44
$ 36
$ 12
$ 7&'
$ 32'
$ 1#2'
$ 176'
$ #2'
"nits' sho@ing separate varia%le cost %"dget is as 0ol
a@nmate /ompany
lei%ile "dget
or the !onth o0 !ay
4'& $ 1'2'
4'&
4'&
4'& 4'&
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a@nmate /ompanylei%le-"dget Dariances
or the !onth o0 !ay
lei%le
Act"al "dget
4'& 4'&
$ 1'152' $ 1'152'
$ 32' $ 2&&'
1#2' 211'2
176' 172'&
#2' 57'6
$ 7&' $ 72#'6
$ 372' $ 422'4
$ 1&' $ 1&'
135' 14'
$ 315' $ 32'$ 57' $ 12'4
1
2
4
5
6
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7
12
13
14
16
1#
2
&' direct-la%or h
3' po"nds p"rch
5 ho"rs at $ 1&
2 po"nds at $ 2
5 ho"rs at $ 15
5 ho"rs at $ 3
> P
> 3'
> $ 6' n0avora%le
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> $ 66' I
> *P
> $ 2
> $ 2' n0avora%le
> 1'45
> A)
> &'
> $ 7'2 n0avora%le
> $ 151'2 I
> *(
> $ 1&
> $ 13'5 n0avora%le
> 1'45 "nits
> act"al DO) -
> $ 11' -
> $ :1'< avora%le
> *D( > $ 15
> $ 1'125 n0avora%le
> act"al O) -
> $ 26' -
> $ 1' n0avora%le
> $ 3' I
>
> 5 ho"rs per "n
>
> $56#4 per "ni
probudgeted
machbudgeted
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>
> $11 per machi
>
>
>
$627'
33'
$324'
>
> $1& per ho"r
>
>
>
$11 permachine ho"r
hours00
20,200
hours30,000
$324,000
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>
>
> act"al Bed overhead W %"dget
>
> :Act"al sales p
>
:Act"al sales vol"me W %"dgeted sales vol"me< V %"d
:5' W 6'< V $5 > $5' n0avora%le
:Act"al sales vol"me W %"dgeted sales vol"me< V %"d
:5' W 6'< V $2 > $2' n0avora%le
Act"al "dgeted
*ales *ales Price
Price Price i=erence
$115 $12 $5
5# 6 1
(AH × *D(< W :*)× *D(<
:32' V
$324' W
:$4& W $5X< V
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Act"al "dgeted
*ales *ales Dol"me
Dol"me Dol"me i=erence
74' &' 6'
&6' 12' 34'
ied-overhead rate p>
$4 per hr >
ed direct-la%or ho"rs > planned prod"
1' hr >
> planned prod"ction W 5 "nits
> 5' "nits W 5 "nits
> 4'5 "nits
> $43'25
>
>
o"rs
X V 2 hr per "
There0ore' planned prod"ction (X) eL"als 5' "nits
X W $4'
direcplanned
i!budgeted
X
$40,000
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4'5 "nits prod"ced V 2 hr pe
#' hr
>
>
>
> $6 per direct-la%or ho"r
$1'2 >
>
Daria%le-overhead spending variance
$63 per dire
> AH(AVR – SVR)
>
irect-material L"antity per "nit
> SP(AQ – SQ)
>
> 13'5 9g
> PQ(AP – SP)
14':$135 W $12<
$21'
$4 per hr V #' hr
$36'
>
>
> %"dgeted Bed overhead W app
There0ore' AR > $15
There0ore' SVR > $6 per hr
&'&: AVR W $6<
$12:14' W SQ
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$4' W $36'
> $4' :Positive
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5' ^ 45' "nits sold
$133'
7#'5
3'
75'
54'
o"nds< ^ 6 min"tes
45' $24&'5
actual budgetedsales price sales price
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cases
machine ho"rs
per machine ho"rho"rs per case o0 marshmallo@s
per month
cases per month
:A) *D(<
4'5 $ #
:A) - *)<
4'5 - 36'
cases 4 hrs per case
%"dgeted O)
$ 12'
"nits
la% ho"rs
per ho"r
ho"rs per "nit
"nits
:A) *D(<
5' $ 61
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:A) - *)<
5' - 4'
cases 2 hrs per case
%"dgeted O)
$ 1'
$2'34' W :275' V $&<
$14'
SVR (AH – SH)
$& :275' W 2&'<
$4'
act"al varia%le overhead W (AH ´ SVR)
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ed Bed overhead
lied Bed overhead
%"dge
> :#' W 1'< V $12 > $12' n0avora%le
argin
"nits
la% ho"rs
per ho"r
ho"rs per "nit
"nits
×
volume
sales
budgeted
volume
sales
actual
variancevolume-Sales
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:A) *D(<
165' $ 3
:A) - *)< 165' - 16'
cases 2 hrs per case
%"dgeted O)
$ #'
y
y
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Dariance
2
$ 4&'
:2'<
$ 6&'
-5'
$ 63'
lo@s?
I 5' >
$ 6 > $ 2&&'
$ 44 > 211'2
$ 36 > 172'&$ 12 > 57'6
1&'
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14'
lei%le-"dget
Dariance
-
$ -
$ 32'
:1#'2<
3'2
34'4
$ 5'4
$ :5'4<
$ -
:5'<
$ :5'< $ :45'4<
/ase
$4a per ho"r
$#% per ho"r
$6'4c
$1&'d
$&'e
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1'45
$ 11'
26'
"rs 151'2
sed and "sed 66'
$ #
4
75
15
$ 1525
$ 15'
$ 3'1' direct-la%or ho"rs
:AP - *P<
$ 22 - $ 2
$1#'&0
$1'6 "nderappliedg
$4'6& "nderappliedh
1' "nitsi
& "nits F
$6'49
$14'4l
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3' > $ 22
:A - *<
3' - 2#'
2 l%s per "nit > 2#'
:A( - *(<
$ 1&# - $ 1&
&' > $ 1&#
:A) - *)<
&' - 7'25
5 hrs per "nit > 7'25
:A) *D(<
&' $ 15
:A) - *)< &' - 7'25
%"dgeted O)
$ 25'
12 > $ 25'
it
t :ro"nded<
uction
hoursne6,00030,000
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ed Bed overhead
rice W %"dgeted sales price< V act"al sales vol"me
geted sales price
3
geted contri%"tion margin
Act"al *ales-
*ales Price
Dol"me Dariance
74'$37'
&6'
5' > $1' n0avora%le
&6'
$456'
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*ales-
"dgeted *ales Price Dol"me
Dariance
$12 $ 72'
6
tion V standard ho"rs per "nit
act"al Bed overhead W %"dgeted Bed overhead
2'4' $2'76'
it
hourslabor-
overheadd
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r "nit
$15 per ho"r
AH(AR – SR)
SVR(AH – SH)
t-la%or ho"r
lied Bed overhead
&'&: AR W $14<
SVR:&'& W #'
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152/180
actualsales volume
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153/180
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154/180
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ted sales price
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156/180
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157/180
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158/180
32'
$ 12'4
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159/180
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160/180
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000
$7",000+
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>
>
> 3 9g
unitsinproductionactualal%uatit&material-directstandardtotal
units4,500
'(g#13,500
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lo$ed
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