135.
Barrymore Corporation, which makes landing gears, has provided the following data for a
recent month:
Budgeted production
1,200
gears
Standard machine-hours
per gear
5.9
machine-
hours
Budgeted supplies cost
$6.50
per machine-
hour
Actual production
1,300
gears
Actual machine-hours
7,950
machine-
hours
Actual supplies cost
(total)
$49,742
17-142
precision drills for oil exploration:
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
17-143
137.
Tallon & Associates is a consulting firm specializing in business location studies. The
results for last year, along with the budget, are as follows:
Actual
Budget
Billable hours
25,200
24,000
Revenue
$2,772,000
$2,400,000
Professional salaries (variable)
1,310,000
1,200,000
Other variable costs
488,000
400,000
Fixed costs
492,000
450,000
Office management salaries (fixed)
317,000
225,000
Operating profit
$165,000
$125,000
Billable hours
Professional salaries (variable)
Other variable costs
Contribution margin
138.
139.
140.
141.
142.
143.
17-149
144.
145.
The Halcion Company uses a standard cost system in which manufacturing overhead
costs are applied to units of the company’s single product on the basis of standard direct
labor-hours (DLHs). The standard cost card for the product follows:
Standard Cost Card-per unit of product
17-150
Direct Materials, 4 yards at $3.50 per yard
$14
Direct Labor, 1.5 DLHs at $8 per DLH
12
Variable Overhead, 1.5 DLHs at $2 per DLH
3
Fixed Overhead, 1.5 DLHs at $6 per DLH
9
Standard cost per unit
$38
The following data pertain to last year’s activities:
•
The company manufactured 18,000 units of
product during the year. A total of 70,200 yards
of material was purchased during the year at a
cost of $3.75 per yard. All of this material was
used to manufacture the 18,000 units.
•
The company worked 29,250 direct labor-hours
during the year at a cost of $7.80 per hour.
•
The denominator activity level was 22,500
direct labor-hours.
•
Budgeted fixed manufacturing overhead costs
were $135,000 while actual manufacturing
overhead costs were $133,200.
•
Actual variable overhead costs were $61,425.
146.
Advantage Co. sells two types of drives—standard and specialty. The budget is based on a
combination of last year’s information as well as forecasted industry sales and the
company’s market share. The following information is provided for June:
Budgeted
Actual
Standard
Specialty
Standard
Specialty
Selling price
per drive
$50
$70
$52
$70
Variable
price per
drive
24
40
24
42
Contribution
margin
$26
$30
$28
$28
Sales
(units)
5,000
1,000
4,500
1,500
Fixed costs
$60,000
$63,000
Sales revenue
Variable cost
Contribution margin