Accounting Chapter 16 Which The Following Not Alternative Name

subject Type Homework Help
subject Pages 14
subject Words 548
subject Authors Michael Maher, Shannon Anderson, William Lanen

Unlock document.

This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
page-pf1
105.
Which of the following is not an alternative name for the production volume variance?
page-pf2
106.
The production volume variance must be computed when a company uses:
107.
Which of these variances is least significant for cost control?
page-pf3
108.
A debit balance in the labor-efficiency variance account indicates that:
109.
If materials are carried in the direct materials inventory account at standard cost, then it is
reasonable to assume that the:
page-pf4
16-84
Essay Questions
page-pf5
16-85
110.
The Elon Company had great difficulty in controlling overhead costs. At a recent
convention, the president heard about a control device for overhead costs known as a
flexible budget and she has hired you to implement this budgeting program. After some
effort, you develop the following cost formulas for the company's machining department.
These costs are based on a normal operating range of 15,000 to 23,000 machine-hours per
month:
Machine setup
$0.20 per machine-hour
Lubricants
$1.00 per machine-hour plus $8,000 per month
Utilities
$0.70 per machine-hour
Indirect labor
$0.60 per machine-hour plus $20,000 per month
Depreciation
$32,000 per month
During March, the first month after your preparation of the above data, the machining
department worked 18,000 machine-hours and produced 9,000 units of product. The
actual costs of this production were:
Machine set-up
$4,800
Lubricants
24,500
Utilities
12,000
Indirect labor
32,500
Depreciation
32,500
$106,300
The department had originally been budgeted to work 19,000 machine-hours during
March.
Required:
Prepare a performance report for the machining department for the month of March
including columns for the (a) actual results, (b) flexible budget, (c) flexible budget
variance, (d) master budget, and (e) sales activity variance.
page-pf6
16-86
page-pf7
page-pf8
16-88
111.
The Ornate Company has the following information pertaining to the month of March:
Units of output, actual
$21,000
Fixed costs, actual
$497,000
Operating profit, master budget
$220,000
Sales price variance
$84,000
U
Beginning and ending inventories
0
Sales volume variance, revenue
$300,000
U
Budgeted selling price per unit
$100
Variable costs, master budget
$1,680,000
Contribution margin, actual
$516,000
Required:
Prepare a performance report for March including columns for the (a) actual results, (b)
flexible budget, (c) flexible budget variance, (d) master budget, and (e) sales activity
variance.
page-pf9
page-pfa
16-90
112.
Fargo Company manufactures special electrical equipment and parts. Eastern employs a
standard cost accounting system with separate standards established for each product.
A special transformer is manufactured in the Transformer Department. Production volume
is measured by direct labor hours in this department and a flexible budget system is used
to plan and control department overhead. Standard costs for the special transformer are
determined annually in September for the coming year. The standard cost of a transformer
was computed at $67.00 as shown below.
Direct materials:
Iron
5 sheets
@ $2.00
$10.00
Copper
3 spools
@ $3.00
9.00
Direct labor
4 hours
@ $7.00
28.00
Variable overhead
4 hours
@ $3.00
12.00
Fixed overhead
4 hours
@ $2.00
8.00
Total
$67.00
Overhead rates were based upon normal and expected monthly capacity, both of which
were 4,000 direct labor hours. Practical capacity for this department is 5,000 direct labor
hours per month. Variable overhead costs are expected to vary with the number of direct
labor hours actually used. During October, 800 transformers were produced. This was
below expectations because a work stoppage occurred at the copper supplier and
shipments were delayed.
The following costs were incurred in October:
page-pfb
page-pfc
113.
page-pfd
16-93
114.
The Rogers Company uses a standard cost accounting system and estimates production
for the year to be 60,000 units. At this volume, the company's variable overhead costs are
$0.50 per direct labor hour.
The company's single product has a standard cost of $30.00 per unit. Included in the
$30.00 is $13.20 for direct materials (3 yards) and $12.00 of direct labor (2 hours).
Production information for the month of March follows:
Number of units produced
6,000
Materials purchased (18,500 yards)
$88,800
Materials used in production (yards)
18,500
Direct labor cost incurred ($6.50/hour)
$75,400
page-pfe
16-94
115.
The Atlas Company has developed standard overhead costs based upon a capacity of
180,000 direct labor hours:
Standard costs per unit:
Variable portion
2 hours @ $3 =
$6
Fixed portion
2 hours @ $5 =
10
$16
116.
Horton Company adopted a standard cost system several years ago. The standard costs
for the prime costs of its single product are as follows:
Material: 8 kilograms @ $5 per kilogram
$40.00
Labor: 6 hours @ $8.20 per hour
$49.20
The following operating data were taken from the records for November:
page-pff
16-95
Units completed
5,600 units
Budgeted output
6,000 units
Purchase of materials
50,000 kilograms
Total actual labor costs
$300,760
Actual labor hours
36,500 hours
Material efficiency (quantity)
variance
$1,500
unfavorable
Total material variance
$750 unfavorable
page-pf10
16-96
117.
The following standards have been established for a raw material used to make product
JN36:
Standard quantity of the
material per unit of output
6.3
pounds
Standard price of the material
$15.50
per
pound
The following data pertain to a recent month's operations:
Actual material
purchased
6,700
pounds
Actual cost of material
purchased
$100,500
Actual material used in
production
6,400
pounds
Actual output
920
units of
product JN36
page-pf11
16-97
118.
The data below relate to a product of Bellingham Company.
Standard costs:
Materials, 2 pounds at $6 per
pound
$12
per
unit
Labor, 3 hours at $15 per hour
$45
per
unit
Actual results were:
Production
3,600
Units
Material purchased & used,
7,300 pounds
$42,340
Labor, 10,360 hours
$160,580
119.
The following data have been provided by Vegas Corporation:
page-pf12
16-98
Budgeted production
8,300
units
Standard machine-
hours per unit
4.5
machine-
hours
Standard lubricants
$5.10
per machine-
hour
Standard supplies
$2.90
per machine-
hour
Actual production
8,600
units
Actual machine-hours
38,270
machine-
hours
Actual lubricants (total)
$211,801
Actual supplies (total)
$107,566
120.
The following data for November have been provided by Mazzio Corporation, a producer of
precision drills for oil exploration:
page-pf13
16-99
Budgeted production
4,000
drills
Standard machine-
hours per drill
8.4
machine-
hours
Standard indirect labor
$9.40
per machine-
hour
Standard power
$2.90
per machine-
hour
Actual production
4,300
drills
Actual machine-hours
36,530
machine-
hours
Actual indirect labor
$362,756
Actual power
$97,693
121.
Shum Company manufactures special electrical equipment and parts. Shum employs a
standard cost accounting system with separate standards established for each product.
page-pf14
16-100
A special transformer is manufactured in the Transformer Department. Production volume
is measured by direct labor hours in this department and a flexible budget system is used
to plan and control department overhead. Standard costs for the special transformer are
determined annually in September for the coming year. The standard cost of a transformer
was computed at $67.00 as shown below.
Direct materials:
Iron
5 sheets
@ $2.00
$10.00
Copper
3 spools
@ $3.00
9.00
Direct labor
4 hours
@ $7.00
28.00
Variable overhead
4 hours
@ $3.00
12.00
Fixed overhead
4 hours
@ $2.00
8.00
Total
$67.00
Overhead rates were based upon normal and expected monthly capacity, both of which
were 4,000 direct labor hours. Practical capacity for this department is 5,000 direct labor
hours per month. Variable overhead costs are expected to vary with the number of direct
labor hours actually used. During October, 800 transformers were produced. This was
below expectations because a work stoppage occurred at the copper supplier and
shipments were delayed.
Direct
materials:
Iron:
purchased 5,000 sheets @
$2.00/sheet
Used: 3,900 sheets
Copper:
purchased 2,200 spools @ $3.10
Used: 2,600 spools
Direct labor:
3,400 hours
Total payroll: $24,080
Overhead:

Trusted by Thousands of
Students

Here are what students say about us.

Copyright ©2022 All rights reserved. | CoursePaper is not sponsored or endorsed by any college or university.