Our initial plan was to make and sell 500 wrenches. We budgeted 2 lbs. of steel...
Our initial plan was to make and sell 500 wrenches. We budgeted 2 lbs. of steel for each wrench, and expected to pay $1.50 per pound for the steel. We budgeted $20 per hour for labor, and expected it to take 3 hours to make each tool. Our initial plan was to sell the 500 wrenches for $120 each. We budgeted $8000 for insurance (fixed overhead), and we decided to use labor hours as the driver for allocating utilities costs (variable overhead). We expected to have $12,000 in utilities costs. ACTUAL RESULTS (1) We receive an order for 550 units at $125.00 each (2) We purchase 1,400 lbs. of materials., paying 1,960.00, or $1.40 per lb. (3) We drawdown 1250 lbs. materials to produce 550 wrenches . (4) We drawdown (pay) $21.00 hr. for 1640 hours of labor to produce the 550 wrenches. (5) We incur variable overhead expenses (ex. - utilities) of $11,890.00. Variable overhead is applied using the budgeted Var. OH application rate. (6) Fixed overhead (insurance)costs are $7,800. Fixed overhead is deemed to be a period expense. (7) We sell all 550 units at $125 each. PART ONE: Required Prepare in good order a Master Budget Income Statement. Prepare in good order a Flexible Budget Income Statement, based on actual production. Prepare in good order an Actual Results Income Statement.
Homework Answers
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| Workings for Master Budget, Flexible Budget and Actual Income Statement |
| Sales Revenue |
 Master |
Flexible | Actual |
Note |
| 500.00 | 550.00 | 550.00 | A | |
| Sell price per unit | 120.00 | 120.00 | 125.00 | B |
| Sales Revenue | 60,000.00 | 66,000.00 | 68,750.00 | C=A*B |
| Cost of Direct Material used |
Master |
Flexible | Actual | |
| Sales units | 500.00 | 550.00 | See A | |
| Steel required per unit | 2.00 | 2.00 | D | |
| Steel required/ used | 1,000.00 | 1,100.00 | 1,250.00 | E=A*D |
| Cost per pound | 1.50 | 1.50 | 1.40 | F |
| Cost of Direct Material used | 1,500.00 | 1,650.00 | 1,750.00 | G=E*F |
| Direct Labor cost |
Master |
Flexible | Actual | |
| Sales units | 500.00 | 550.00 | See A | |
| Direct Labor hour per unit | 3.00 | 3.00 | H | |
| Direct Labor hour required | 1,500.00 | 1,650.00 | 1,640.00 | I=A*H |
| Labor Cost per hour | 20.00 | 20.00 | 21.00 | J |
| Direct Labor cost | 30,000.00 | 33,000.00 | 34,440.00 | K=I*J |
| Variable manufacturing overhead per unit |
|
|
||
| Utilities costs | 12,000.00 |
|
||
| Direct Labor hours- Master Budget | 1,500.00 |
|
||
| Variable manufacturing overhead per hour | 8.00 |
|
||
| Flexible Direct Labor hours | 1,650.00 |
|
||
| Flexible Variable manufacturing overhead | 13,200.00 |
|
| Variable manufacturing overhead |
|
Flexible | Actual | ||
| Utilities costs | 12,000.00 | 13,200.00 | 11,890.00 | See workings above | |
| Variable manufacturing overhead | 12,000.00 | 13,200.00 | 11,890.00 | ||
| Fixed manufacturing overhead |
|
Flexible | Actual | ||
| Insurance | 8,000.00 | 8,000.00 | 7,800.00 | ||
| Fixed manufacturing overhead | 8,000.00 | 8,000.00 | 7,800.00 |
| Master Budget Income Statement |
|
|
|||||
| Sales | 60,000.00 |
|
|||||
| Less: Variable cost |
|
||||||
| Cost of Direct Material used | 1,500.00 | See G | |||||
| Direct Labor cost | 30,000.00 |
|
|||||
| Variable manufacturing overhead | 12,000.00 |
|
|||||
| Total Variable cost | 43,500.00 | ||||||
| Contribution margin | 16,500.00 | ||||||
| Less: Fixed manufacturing overhead | 8,000.00 | ||||||
| Budgeted Income | 8,500.00 | ||||||
| Flexible Budget Income Statement |
|
|
|||||
| Sales | 66,000.00 |
|
|||||
| Less: Variable cost | |||||||
| Cost of Direct Material used | 1,650.00 |
|
|||||
| Direct Labor cost | 33,000.00 |
|
|||||
| Variable manufacturing overhead | 13,200.00 |
|
|||||
| Total Variable cost |
|
||||||
| Contribution margin | 18,150.00 | ||||||
| Less: Fixed manufacturing overhead | 8,000.00 | ||||||
| Flexible Budget Income | 10,150.00 | ||||||
| Actual Income Statement |
|
|
|||||
| Sales | 68,750.00 |
|
|||||
| Less: Variable cost | |||||||
| Cost of Direct Material used | 1,750.00 |
|
|||||
| Direct Labor cost | 34,440.00 |
|
|||||
| Variable manufacturing overhead | 11,890.00 |
|
|||||
| Total Variable cost | 48,080.00 | ||||||
| Contribution margin |
|
||||||
| Less: Fixed manufacturing overhead | 7,800.00 | ||||||
| Actual Income | 12,870.00 |
Add Answer to:
Our initial plan was to make and sell 500 wrenches. We budgeted
2 lbs. of steel...
INITIAL BUDGET INFORMATION Our initial plan was to make and sell 500 wrenches. We budgeted 2...
INITIAL BUDGET INFORMATION Our initial plan was to make and sell 500 wrenches. We budgeted 2 lbs. of steel for each wrench, and expected to pay $1.50 per pound for the steel. We budgeted $20 per hour for labor, and expected it to take 3 hours to make each tool. Our initial plan was to sell the 500 wrenches for $120 each. We budgeted $8000 for insurance (fixed overhead), and we decided to use labor hours as the driver for...
updated 021119 TIDEWATER WRENCH COMPANY, LLC TRACKING COST VARIANCES & SALES VARIANCES INITIAL BUDGET INFORMATION Our...
updated 021119 TIDEWATER WRENCH COMPANY, LLC TRACKING COST VARIANCES & SALES VARIANCES INITIAL BUDGET INFORMATION Our initial plan was to make and sell 500 wrenches. We budgeted 2 lbs. of steel for each wrench, and expected to pay $1.50 per pound for the steel. We budgeted $20 per hour for labor, and expected it to take 3 hours to make each tool. Our initial plan was to sell the 500 wrenches for $120 each. We budgeted $8000 for insurance (fixed...
fill in the varience sheets based off of budgests Master Budget Income Statement Detail 500 wrenches...
fill in the varience sheets based off of budgests
Master Budget Income Statement Detail 500 wrenches at $120 each Revenue Summary $60,000 COGS Materials Labor Variable OH Total Var. Contr. Margin Less: Fixed OH Net Income (500*2 lbs $1.5 per lbs) (500*3 labor hours $20) ($12,000/1500) $8 per labor hour $1,500 $30,000 $12,000 $43,500 $16,500 $8,000 $8,500 Flexible Budget Income Statement Detail 550 wrenches at $120 each Summary $66,000 Revenue COGS Materials Labor Variable OH Total Var. Contr. Margin Less:...
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shedule 3 2 2018 BUDGETED DATA FOR THE ADVISORY SERVICE Budgeted billable hours 5000 hours of...
shedule 3
2 2018 BUDGETED DATA FOR THE ADVISORY SERVICE Budgeted billable hours 5000 hours of billable work Charge out rate per hour S Professional labour $ Variable overhead $ Fixed overhead $ 95. 60,000 142,000 210.00 per billable hour 00 per billable hour see 'overhead' note below 8 Overhead costs: Budgeted Variable and Fixed overhead rates are determined by dividing the budgeted (fixed or variable) overhead by the budgeted billable hours. This rate is used to opply overhead to...
songsu Co. is struggling to control costs. we are hired as consultants to determine why the company's actual costs exce...
songsu Co. is struggling to control costs. we are hired as
consultants to determine why the company's actual costs exceed
budgeted costs. The tableau dashboard is provided for our
analysis.
OVERHEAD- ACTUAL COSTS
variable overhead: 101,000
fixed overhead: 68,000
OVERHEAD- STANDART COSTS
variable overhead- $12 per hour , 2 hours per unit.
fixed overhead - 6 per hour , 2 hours per unit.
ACTUAL UNITS MANUFATURED: 5,100 units
Tableau DA 8-3: Mini-Case, Direct labor variances and overhead variances LO P2,...
updated 021119 TIDEWATER WRENCH COMPANY, LLC TRACKING COST VARIANCES & SALES VARIANCES INITIAL BUDGET INFORMATION Our initial plan was to make and sell 500 wrenches. We budgeted 2 lbs. of steel for each wrench, and expected to pay $1.50 per pound for the steel. We budgeted $20 per hour for labor, and expected it to take 3 hours to make each tool. Our initial plan was to sell the 500 wrenches for $120 each. We budgeted $8000 for insurance (fixed...
fill in the varience sheets based off of budgests
Master Budget Income Statement Detail 500 wrenches at $120 each Revenue Summary $60,000 COGS Materials Labor Variable OH Total Var. Contr. Margin Less: Fixed OH Net Income (500*2 lbs $1.5 per lbs) (500*3 labor hours $20) ($12,000/1500) $8 per labor hour $1,500 $30,000 $12,000 $43,500 $16,500 $8,000 $8,500 Flexible Budget Income Statement Detail 550 wrenches at $120 each Summary $66,000 Revenue COGS Materials Labor Variable OH Total Var. Contr. Margin Less:...
We make and sell inexpensive "lab-on-chip" laboratory kits for medical testing. We currently make the microchips used in the laboratory kits. Our absorption unit cost for microchips is detailed below: Direct Materials (DM) $ 1.00 Direct Labor (DL) 10.00 Variable Manufacturing Overhead (VOH) 5.00 Fixed Manufacturing Overhead (FOH) 8.00 $24.00 Total An external supplier offers to sell us 10,000 of the microchips for $22.00 per chip. If we accept this proposal, $50,000 of our fixed overhead will be avoided. Which...
We make and sell a single product. Our selling price is $2.50 per unit. Variable cost per unit is $1.00. We expect fixed costs to total $18,000 for next year. What would our total sales dollars have to be next year in order to generate $45,000 of net income? A. $45,000 B. $18,000 Oc. $42,000 OD. $105,000 Reset Selection
shedule 3
2 2018 BUDGETED DATA FOR THE ADVISORY SERVICE Budgeted billable hours 5000 hours of billable work Charge out rate per hour S Professional labour $ Variable overhead $ Fixed overhead $ 95. 60,000 142,000 210.00 per billable hour 00 per billable hour see 'overhead' note below 8 Overhead costs: Budgeted Variable and Fixed overhead rates are determined by dividing the budgeted (fixed or variable) overhead by the budgeted billable hours. This rate is used to opply overhead to...
songsu Co. is struggling to control costs. we are hired as
consultants to determine why the company's actual costs exceed
budgeted costs. The tableau dashboard is provided for our
analysis.
OVERHEAD- ACTUAL COSTS
variable overhead: 101,000
fixed overhead: 68,000
OVERHEAD- STANDART COSTS
variable overhead- $12 per hour , 2 hours per unit.
fixed overhead - 6 per hour , 2 hours per unit.
ACTUAL UNITS MANUFATURED: 5,100 units
Tableau DA 8-3: Mini-Case, Direct labor variances and overhead variances LO P2,...
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