Decision Making 12-1
The executive team at Current Designs has gathered to evaluate
the company’s operations for the last month. One of the topics on
the agenda is a special order to produce a batch of 20 kayaks for a
client.
Mike Cichanowski asked the others if the special order caused any
particular problems in the production process. Dave Thill, the
production manager, made the following comments: “Since we wanted
to complete this order quickly and make a good first impression on
this new customer, we had some of our most experienced type I
workers run the rotomould oven and do the trimming. They were very
efficient and were able to complete that part of the manufacturing
process even more quickly than the regular crew. However, the
finishing on these kayaks required a different technique than what
we usually use, so our type II workers took a little longer than
usual for that part of the process.”
Deb Welch, who is in charge of the purchasing function, said, “We
had to pay a little more for the polyethylene powder for this order
because the customer wanted a colour that we don’t usually stock.
We also ordered a little extra since we wanted to make sure that we
had enough to allow us to calibrate the equipment. The calibration
was a little tricky, and we used all of the powder that we had
purchased. Since the number of kayaks in the order was fairly
small, we were able to use some rope and other parts that were left
over from last year’s production in the finishing kits. We’ve seen
a price increase for these components in the last year, so using
the parts that we already had in inventory cut our costs for the
finishing kits.”
Diane Buswell examined some of the accounting records and
reported that Current Designs purchased 1,330 kg of pellets for
this order at a total cost of $3,591. Twenty finishing kits were
assembled at a total cost of $3,280. The payroll records showed
that the type I employees worked 37 hours on this project at a
total cost of $703. The type II finishing employees worked 66 hours
at a total cost of $1,072.50. A total of 20 kayaks were produced
for this order.
The standards that had been developed for this model of kayak are
as follows for each kayak:
I really appreciate it!
First we will calculate :
Standard | Actual | |||
Price | Quantity | Price | Quantity | |
Polyethylene powder | 2.5 | 1180 | 2.7 | 1330 |
Finishing kit | 175 | 20 | 164 | 20 |
Standard | Actual | |||
Hours | Rate | Hours | Rate | |
Worker I | 40 | 19 | 37 | 19 |
Worker II | 60 | 16 | 66 | 16.25 |
Working notes:
Calculation of Actual | |
Price of polythelene powder | 3591/1330 =2.7 |
Price of Finishing kit | 3280/20 = 164 |
Calculation of Standard | |
Hours for worker I | 2 X 20 = 40 |
Hours for worker II | 3 X 20 = 60 |
Now using formulas:
Quantity variance of Polythelene powder | (375) | (A) |
Price variance of Polythelene powder | (266) | (A) |
Quantity variance of Finishing kit | 0 | |
Price varianceof Finishing kit | 200 | F |
Quantity variance of Worker I | 57 | F |
Price variance of Worker I | 0 | |
Quantity variance of Worker II | (96) | (A) |
Price variance of Worker II | (16.5) | (A) |
Formula
Material | labour | |
Quantity variance | standard price(standard quantity-actual quantity) | Standard rate(Standard hours-Actual Hours) |
Price variance | Actual quantity(Standard price-Actual price) | Actual hours(Standard rate-Actual rate) |
Decision Making 12-1 The executive team at Current Designs has gathered to evaluate the company’s operations...
Diane Buswell examined some of the accounting records and reported that Current Designs purchased 1,200 pounds of pellets for this order at a total cost of $2,040.20 finishing kits were assembled at a total cost of $3,240. The payroll records showed that the type I employees worked 38 hours on this project at a total cost of $570. The type II finishing employees worked 65 hours at a total cost of $796.25. A total of 20 kayaks were produced for...
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Quarter 1 Quarter 2 Quarter 3 Quarter 4 1,000 kayaks 1,500 kayaks 750 kayaks 750 kayaksCurrent Designs’ policy is to have finished goods ending inventory in a quarter equal to 20% of the next quarter’s anticipated sales. Preliminary sales projections for 2021 are 1,100 units for the first quarter and 1,500 units for the second quarter. Ending inventory of finished goods at December 31, 2019, will be 200 rotomolded kayaks.Production of each kayak requires 54 pounds of polyethylene powder and...
ašes Current Designs Excel CD9 Diane Buswell is preparing the 2020 budget for one of Current Designs' rotomolded kayaks. Extensive meetings with members of the sales department and executive team have resulted in the fol- lowing unit sales projections for 2020 1,000 kayaks 1,500 kayaks 750 kayaks 750 kayaks Quarter Quarter 2 Quarter 3 Quarter 4 Current Designs' policy is to have finished goods ending inventory in a quarter equal to 20 % of the next quarter's anticipated sales. Preliminary...
Current Designs CD9 Diane Buswell is preparing the 2020 budget for one of Current Designs' rotomolded Extensive meetings with members of the sales department and executive team have resulted in the lowing unit sales projections for 2020. Quarter 1 1,000 kayaks Quarter 2 1,500 kayaks Quarter 3 750 kayaks Quarter 4 750 kayaks Current Designs' policy is to have finished goods ending inventory in a quarter equal to 20% of the next quarter's anticipated sales. Preliminary sales projections for 2021...
Current Designs CD9 Diane Buswell is preparing the 2020 budget for one of Current Designs' rotomolded Extensive meetings with members of the sales department and executive team have resulted in the lowing unit sales projections for 2020. Quarter 1 1,000 kayaks Quarter 2 1,500 kayaks Quarter 3 750 kayaks Quarter 4 750 kayaks Current Designs' policy is to have finished goods ending inventory in a quarter equal to 20% of the next quarter's anticipated sales. Preliminary sales projections for 2021...
4 А в 1 CD2 - Excel Tutorial 3 CURRENT DESIGNS 4) Juegel Hollow Resort has ordered 20 rotomolded kayaks from Current Designs. Each kayak will be formed in 5 the rotomolded oven, cooled, and then the excess plastic trimmed away. Then, the hatches, seat, ropes, and tungees 6 will be attached to the kayak. 7 Dave Thill, the kayak plant manager, knows that manufacturing each kayak requires 54 pounds of polyethylene 8 powder and a finishing kit (rope, seat,...
Quarter 11,200 kayaksQuarter 21,500 kayaksQuarter 3750 kayaksQuarter 4700 kayaksKK’s policy is to have finished goods ending inventory in a quarter equal to 20% of the next quarter's anticipated sales. Preliminary sales projections for 2022 are 1,100 units for the first quarter and 1,500 units for the second quarter. Ending inventory of finished goods at December 31, 2020, will be 200 kayaks. Production of each kayak requires 54 pounds of polyethylene powder and a finishing kit (rope, seat, hardware, etc.). Company policy...
Diane Buswell is preparing the 2020 budget for one of Current Designs' rotomolded kayaks. Extensive meetings with members of the sales department and executive team have Quarter 1 Quarter 2 Quarter 3 Quarter 4 1,900 kayaks 2,600 kayaks 1,550 kayaks 1,550 kayaks Current Designs' polRY to have finished goods ending inventory in a quarter equal to 15% of the next quarter's anticipated sales, preliminary sales project ons for 2021 are 1,100 units for the first quarter and 2,600 units for...
Resort ormed in be attached to the kayak kayaks from Current Designs. Each kayak will t then the sacess each kayak requires 4 pounds of polyethee used in those kayaks and a finishing kit peat hardware, etc.). The polyethylone powder kayak wil skilled tyoe l rom people who oven and tim and seat and other hardware. Theo abor from people who es of this problem, assume that Overhead is allocated to all jobs at a rane or f order Idensty...