Cost Management Problem

project.xlsx

Home >Business & Finance homework help >Accounting homework help >Cost Management Problem

Mina's Cost Analysis

DL: Production- rate/hr			10		Std's for biscuit- Production=/bis.min				60
Inspection- rate/ hr			20			Inspection=hours/batch			2
a)inspections/batch.			300	std at actual:		5,000	hrs of production
Actual DL cost:						2,000	hrs of inspection
Pro:	4,900	Hrs	$ 52,150	10.6428571429
Insp:	2,200	Hrs	$ 43,000	19.5454545455	batches inspected		1,000
Units:	300,000				SR	10.43
	7,100					21.5
										150	2,000
DL Rate Variance
	AR		X	AH		SR	X	AH
	$ 10.64			4,900		$ 10.43		4,900
	$ 19.55			2,200		$ 21.50		2,200
			$ 52,150				$ 51,107
			$ 43,000				$ 47,300
					1,043	U
					$ (4,300)	F
				a)	(3,257)	F
	The DL rate Variance is Favorable overall, but actual production cost more than std allowed.
DL Efficiency Variance
	AH	X	SR		SH	X	SR
	4,900		$ 10.43		5,000		$ 10.43
	2,200		$ 21.50		2,000		$ 21.50
		$ 51,107				$ 52,150
		$ 47,300				$ 43,000
				(1,043)	F
				4,300	U
			b)	3,257	U
	Total DL Variance		- 0
	DL mix Variance
	Actual Input Proportions
											DL Yield Variance
				Act-std								SR	X	(Actual Quantity - Standard Quantity)			X	Standard Proportion
											Dl-P	$ 10.43		4,900		5,000		71.43%
		StandardRate		5,000	0.71	4,900	0.69				DL-I	$ 21.50		2,200		2,000		28.57%
	DL-Pro	$ 10.43		2,000	0.29	2,200	0.31
	DL-Insp	$ 21.50		7,000		7,100						(745)	F
												1,229	U
			(1,788)	F								484	U
			3,686	U
			1,898	U
				Act-std
							Act total Q
		StandardRate		64%	60%				198,000	64%
	DM-Pro	$ 0.30		36%	40%		311000		113,000	36%
	DM-Insp	$ 0.60		1					311,000
			- 0	F		3,732	U
			- 0	U		(7,464.00)	F
			- 0	U		(3,732.00)
	DM Yield Variance
		SP	X	(Actual Quantity - Standard Quantity)				X	Standard Proportion
	DM P	$ 0.30		311,000		300000			60.00%
	DM I	$ 0.60		311,000		300000			40.00%
			1,980
			2,640
			4,620	U
				units	per unit
Dm: Peanut butter			stds=	0.6	$ 0.30
Bacon				0.4	$ 0.60
Actual Costs:					Used
120,000	units	0.65	per uni	$ 78,000	113,000
200,000	units	0.28	per unit	$ 56,000	198,000
												- 0	U
												- 0	U
DM Price Variance
	AQ*	X	AP		AQ*	X	SP
B	120,000		$ 0.65		120,000		$ 0.60
PB	200,000		$ 0.28		200,000		$ 0.30					Mina’s Tricks ‘N Treats has the following standard overhead rates:
		$ 78,000				$ 72,000							Standard variable overhead rate………………………. $6.00 per direct-labor hour
		$ 56,000				$ 60,000							Standard quantity of direct labor………………………. .02 hours per unit of output
				6,000	U								Budgeted fixed overhead………………………………….. $100,000
				(4,000)	F								Budgeted output……………………………………………….. 310,000 biscuits
				2,000	U
												During the current month the actual overhead results were as follows:
DM Quantity Variance													Actual variable overhead……………………………………. $50,000
	AQ^	X	SP		SQ	X	SP						Actual fixed overhead………………………………………… $63,000
	198,000		$ 0.60		180,000		$ 0.60		300,000	0.6			Actual direct labor………………………………………………. 7,100 hours
	113,000		$ 0.30		120,000		$ 0.30			0.4
		118800				108000									7100
		33900				36000									63000
				10,800	U										50000
				(2,100)	F										0.02
				8,700	U
	Actual Variable Overhead								Flexible Budget: Variable OH				Variable OH Applied
	AH	X	AVR		AH	X	SVR		SH	X	SVR		SH	X	SVR
	7,100		$ 7.04		7,100		$ 6.00		6,000		$ 6.00		6,000		$ 6.00
		$ 50,000				$ 42,600				$ 36,000				$ 36,000
				$ 7,400	U			$ 6,600	U
			Variable OH Spending Variance				Variable OH Efficiency Variance
	Actual Fixed OH				Budgeted Fixed OH				Fixed OH Applied
												Standard hours* unit output
		$ 63,000				$ 100,000				$ 120
												6,000
												0.02
												120
				$ 37,000	F			$ 99,880	U
			Fixed OH Budget Variance				Fixed OH Volume Variance
	Standard quantity of direct labor………………………. .02 hours per unit of output
	Budgeted fixed overhead………………………………….. $100,000
	Budgeted output……………………………………………….. 310,000 biscuits
During the current month the actual overhead results were as follows:
	Actual variable overhead……………………………………. $50,000
	Actual fixed overhead………………………………………… $63,000
	Actual direct labor………………………………………………. 7,100 hours
Required:
Prepare variance analysis based on the above information for each of the listed variances.
a. Direct labor rate variance
b. Direct labor efficiency variance
c. Direct labor mix variance
d. Direct labor yield variance
e. Direct material price variance
f. Direct material quantity variance
g. Direct material mix variance
h. Direct material yield variance
i. Variable overhead spending variance
j. Variable overhead efficiency variance
k. Fixed overhead budget variance
l. Fixed overhead volume variance