Homework Answers
Answer-27-
| Item | Budget | Actual | Variance | Effect |
| Selling and administrative expenses | $29,000 | $47,000 | 18,000 | Unfavorable |
| Sales revenue | 370,000 | 325,000 | 45,000 | Unfavorable |
| Materials Price | $2.00 per lb. | $2.20 per lb | $0.20 per lb. | Unfavorable |
| Cost of goods sold | $125,000 | $100,000 | 25,000 | Favorable |
| Material Purchases | $250,000 | $265,000 | 15,000 | Unfavorable |
| Materials Usage | 6,000 lbs. | 5,800 lbs. | 200 | Favorable |
| Sales Price | $550 each | $500 each | 50 | Unfavorable |
| Labor Rate | $8.10 per hour | $7.95 per hour | 0.15 | Favorable |
| Production Volume | 950 units | 900 units | 50 | Unfavorable |
| Labor usage | $1,066,000 | $97,000 | 969,000 | Unfavorable |
| Research and Development expenses | $22,000 | $22,000 | 0 | No Variance |
28 The payback period for the van = Cost of the van / The amount of expected revenue per year
a- =$24,000/$12,000
=2 years
The payback period for the car = Cost of the car / The amount of expected revenue per year
=$16,000/$10,000
=1.6 years
b-Average annual profit over the expected useful life of van =Expected revenue- Depreciation on van
=$12,000- ($24,000/ 5)
=$12,000-$4,800
=$7,200
Average amount of investment in the van= $24,000/2
=$12,000
Therefore, Unadjusted rate of return based on the average cost of investment= $7,200/ $12,000 *100
=60%
-Average annual profit over the expected useful life of car =Expected revenue- Depreciation on car
=$10,000- ($16,000/ 3)
=$10,000-$5,333
=$4667
Average amount of investment in the car= $16,000/2
=$8,000
Therefore, Unadjusted rate of return based on the average cost of investment= $4,667/ $8,000 *100
=58.34%
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27. Compute variances for the items shown in the following list and indicate whether each variance...
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Compute variances for the following items and indicate whether each variance is favorable (F) or unfavorable (U). Item Budget Actual Variance For U Sales price $400 $390 Sales revenue $360,000 $390,000 $ 192,500 $180,000 Cost of goods sold Material purchases at 5,000 pounds $137,500 $140,000 Materials usage $90,000 $89,000 Production volume 950 units 900 units Wages at 4,000 hours $30,000 $29,350 Labor usage at $12 per hour $48,000 $48,500 Research and development expense $11,000 $12,500 Selling and administrative expenses $24,500...
Required Compute variances for the following items and indicate whether each variance is favorable (F) or...
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Compute the direct labor rate variance and the direct labor
efficiency variance. Indicate whether each variance is favorable or
unfavorable.
Use the following information for the Exercises below. [The following information applies to the questions displayed below.] A manufactured product has the following information for June. Actual a lbs. @ $8.20 per Direct materials 60,700 lb. Direct labor Standard (7 lbs. @ $8 per lb.) (2 hrs. @ $16 per hr.) (2 hrs. @ $12 per hr.) 16.999 hrs. @...
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Required Indicate whether each of the following variances is favorable (F) or unfavorable (U). The first one has been done as an example. (Select "None" if there is no effect (i.e., zero variance).) Type of Variance Item to Classify Sales volume Sales price Materials cost Materials usage Labor cost Labor usage Fixed cost spending Fixed cost per unit (volume) Standard 40,900 units 3.69 per unit $ 3.80 per pound 91,900 pounds 10.90 per hour 61,900 hours $ 409,000 $ 3.29...
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