Cost accounting unit 9
After reading information on the fundamentals of variance analysis in Chapter 16 of the Fundamentals of Cost Accounting text, complete the problem listed below. This problem will help you apply your knowledge of flexible budgets and manufacturing variances.
Complete the following problem:
· Problem 16-50, "Prepare Flexible Budget," page 655.
16-50. Prepare Flexible Budget
Odessa, Inc., reports the following information concerning operations for the most recent month:
|
|
Actual (based on actual of 540 units) |
Master Budget (based on budgeted 600 units) |
|
Sales revenue |
$88,320 |
$96,000 |
|
Less |
|
|
|
Manufacturing costs |
|
|
|
Direct labor |
13,632 |
14,400 |
|
Materials |
11,520 |
13,440 |
|
Variable overhead |
7,872 |
9,600 |
|
Marketing |
5,088 |
5,760 |
|
Administrative |
4,800 |
4,800 |
|
Total variable costs |
$42,912 |
$48,000 |
|
Contribution margin |
$45,408 |
$48,000 |
|
Fixed costs |
|
|
|
Manufacturing |
4,665 |
4,800 |
|
Marketing |
9,984 |
9,600 |
|
Administrative |
9,561 |
9,600 |
|
Total fixed costs |
$24,210 |
$24,000 |
|
Operating profits |
$21,198 |
$24,000 |
There are no inventories.
Required
Prepare a flexible budget for Odessa, Inc.
After reading information on activity-based costing and design of a balanced scorecard in Chapter 16 of the Principles of Cost Accounting text, complete the problem listed below. This problem will help you apply your knowledge of activity-based costing techniques for a service-based business, and your knowledge of the application of a balanced scorecard for performance evaluation.
Complete the following problem:
· Problem 16-59, "Manufacturing Variances," page 657.
16-59. Manufacturing Variances
Delta Products prepares its budgets on the basis of standard costs. A responsibility report is prepared monthly showing the differences between master budget and actual results. Variances are analyzed and reported separately. There are no materials inventories.
The following information relates to the current period:
|
Standard costs (per unit of output) |
|
|
Direct materials, 6 gallons @ $2.00 per gallon |
$12 |
|
Direct labor, 3 hours @ $36 per hour |
108 |
|
Factory overhead |
|
|
Variable (25% of direct labor cost) |
27 |
|
Total standard cost per unit |
$147 |
Actual costs and activities for the month follow:
|
Materials used |
15,120 gallons at $1.80 per gallon |
|
Output |
2,280 units |
|
Actual labor costs |
6,400 hours at $40 per hour |
|
Actual variable overhead |
$60,750 |
Required
Prepare a cost variance analysis for the variable costs.