Managerial Accounting

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1. Antique Reproductions, Inc. estimates its manufacturing costs as follows:

Variable Costs
Direct material	$5.50/unit
Direct labor	2.40/unit
Variable overhead	1.00/unit

Fixed Costs
Supervisor’s salary	$15,000
Production facility depreciation	7,500
Other production costs	1,400

Estimate manufacturing costs for manufacturing levels of 9,000 units, 11,000 units, and 13,000 units.

2. Southern Pecan Company grows and sells pecans. The company harvested 10,000 bags of pecans in May and sold everything that it harvested. The company’s flexible budget for May was:

Bags sold	10,000
Revenue ($10/bag)		$100,000
Expenses:
Bags ($.50 each)	$ 5,000
Pecan orchard maintenance	$ 10,000
Wages and salaries ($2,400 + $.50 per bag)	$ 7,400
Shipping ($.40 per bag)	$ 4,000
Other expenses ($1,000 + $.45 per bag)	$ 5,500
Total Expenses		$ 31,900
Net operating income		$ 68,100

The actual results for May were:

Bags sold	10,000
Revenue ($10/bag)		$105,000
Expenses:
Bags ($.50 each)	$ 5,100
Pecan orchard maintenance	$ 9,000
Wages and salaries ($2,400 + $.50 per bag)	$ 7,900
Shipping ($.40 per bag)	$ 5,000
Other expenses ($1,000 + $.45 per bag)	$ 5,600
Total Expenses		$ 32,600
Net operating income		$ 72,400

Prepare a report detailing the company’s revenue and spending variances of May.

3. Tiger Company makes a product and uses the following standard unit costs for that product:

Direct material quantity standard	6 pound per unit
Direct material price standard	$ 9 per pound
Direct labor time standard	3.5 hours per unit
Direct labor rate standard	$12 per hour
Variable manufacturing overhead rate standard	$ 6 per machine hour
Fixed manufacturing overhead rate standard	$ 5 per machine hour
Machine hours standard	3 hours per unit