Homework Answers
| Manufacturing equipment depreciation is a fixed overhead. | |||||||
| 1) | Equipment depreciation is a fixed cost. | ||||||
| Flexible budget foe fixed cost does not changes with scale of production. | |||||||
| Therefore flexible budget for the month of September is equal to | |||||||
| =$288000/12 | |||||||
| =$24000 | |||||||
| 2) | Spending variance = Budgeted Overhead - Actual Overhead | ||||||
| =$24000-24900 | |||||||
| =$900 (U) | |||||||
| 3) | Volume variance = Overhead Abosorbed (applied) - Budgeted Overhead | ||||||
| =($288000/96000*8000) -24000 | |||||||
| =$24000-24000 | |||||||
| =0 | |||||||
| Let me know the wrong answer. | |||||||
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Clark Company's master budget includes $288,000 for equipment depreciation. The master budget was prepared for an...
Clark Company's master budget includes $300,000 for equipment depreciation. The master budget was prepared for an...
Clark Company's master budget includes $300,000 for equipment depreciation. The master budget was prepared for an annual volume of 75,000 chargeable hours. This volume is expected to occur uniformly throughout the year. During September, Clark performed 5,500 chargeable hours and recorded $21,500 of depreciation. Required: 1. Determine the flexible-budget amount for equipment depreciation in September. 2. Compute the spending variance for the depreciation on equipment. Was the variance favorable (F) or unfavorable (U)? (Leave no cell blank; if there is...
Clark Company’s master budget includes $432,000 for equipment depreciation. The master budget was prepared for an...
Clark Company’s master budget includes $432,000 for equipment depreciation. The master budget was prepared for an annual volume of 86,400 chargeable hours. This volume is expected to occur uniformly throughout the year. During September, Clark performed 7,200 chargeable hours and recorded $36,800 of depreciation. Required: 1. Determine the flexible-budget amount for equipment depreciation in September. 2. Compute the spending variance for the depreciation on equipment. Was the variance favorable (F) or unfavorable (U)? (Leave no cell blank; if there is...
Walkenhorst Company’s machining department prepared its 2019 budget based on the following data: Practical capacity 40,000...
Walkenhorst Company’s machining department prepared its 2019 budget based on the following data: Practical capacity 40,000 units Standard machine hours per unit 2 Standard variable factory overhead $3.00 per machine hour Budgeted fixed factory overhead $ 376,000 The department uses machine hours to apply factory overhead to production. In 2019, the department used 85,200 machine hours and incurred $637,000 in total manufacturing overhead cost to manufacture 42,010 units. Actual fixed overhead cost for the year was $386,000. Required: Determine for...
Walkenhorst Company's machining department prepared its 2019 budget based on the following data: 40,000 units 2...
Walkenhorst Company's machining department prepared its 2019 budget based on the following data: 40,000 units 2 Practical capacity Standard machine hours per unit Standard variable factory overhead Budgeted fixed factory overhead $3.00 per machine hour $424,000 The department uses machine hours to apply factory overhead to production. In 2019, the department used 85,800 machine hours and incurred $689,000 in total manufacturing overhead cost to manufacture 42,070 units. Actual fixed overhead cost for the year was $437,000. Required: Determine for the...
As the new accountant for Cohen & Co., you have been asked to provide a succinct...
As the new accountant for Cohen & Co., you have been asked
to provide a succinct analysis of financial performance for the
year just ended. You obtain the following information that pertains
to the company’s sole product:
Actual
Master (Static) Budget
Units sold
40,000
45,000
Sales
$
380,000
$
450,000
Variable costs
210,000
270,000
Fixed costs
145,000
135,000
Required:
1. What was the actual operating income for the period?
2. What was the company’s master (static) budget operating
income for...
Walkenhorst Company's machining department prepared its 2019 budget based on the following data: Practical capacity Standard...
Walkenhorst Company's machining department prepared its 2019 budget based on the following data: Practical capacity Standard machine hours per unit Standard variable factory overhead Budgeted fixed factory overhead 40,000 units 2 $3.00 per machine hour $352,000 The department uses machine hours to apply factory overhead to production. In 2019, the department used 87,000 machine hours and incurred $619,000 in total manufacturing overhead cost to manufacture 42,190 units. Actual fixed overhead cost for the year was $371,000. Required: Determine for the...
Walkenhorst Company's machining department prepared its 2019 budget based on the following data: 40,000 units Practical...
Walkenhorst Company's machining department prepared its 2019 budget based on the following data: 40,000 units Practical capacity Standard machine hours per unit Standard variable factory overhead Budgeted fixed factory overhead $3.00 per machine hour $368,000 The department uses machine hours to apply factory overhead to production. In 2019, the department used 88,000 machine hours and incurred $636,000 in total manufacturing overhead cost to manufacture 43,000 units. Actual fixed overhead cost for the year was $380,000. Required: Determine for the year:...
As the new accountant for Cohen & Co., you have been asked to provide a succinct...
As the new accountant for Cohen & Co., you have been asked
to provide a succinct analysis of financial performance for the
year just ended. You obtain the following information that pertains
to the company’s sole product:
Actual
Master (Static) Budget
Units sold
25,000
30,000
Sales
$
402,000
$
456,000
Variable costs
232,000
276,000
Fixed costs
161,000
141,000
Required:
1. What was the actual operating income for the period?
2. What was the company’s master (static) budget operating
income for...
As the new accountant for Cohen & Co., you have been asked to provide a succinct...
As the new accountant for Cohen & Co., you have been asked to provide a succinct analysis of financial performance for the year just ended. You obtain the following information that pertains to the company's sole product: Master (Static) Budget 50,000 $458,000 278,000 143,000 Actual 45,000 $412,000 242,000 Units sold Sales Variable costs Fixed costs 151,000 Required: 1. What was the actual operating income for the period? 2. What was the company's master (static) budget operating income for the period?...
As the new accountant for Cohen & Co., you have been asked to provide a succinct analysis of financial performance...
As the new accountant for Cohen & Co., you have been asked to provide a succinct analysis of financial performance for the year just ended. You obtain the following information that pertains to the company's sole product: Units sold Sales Variable costs Fixed costs Actual 25,000 $ 408,000 238,000 161,000 Master (Static) Budget 30,000 $ 456,000 276,000 141,000 Required: 1. What was the actual operating income for the period? 2. What was the company's master (static) budget operating income for...
Clark Company's master budget includes $300,000 for equipment depreciation. The master budget was prepared for an annual volume of 75,000 chargeable hours. This volume is expected to occur uniformly throughout the year. During September, Clark performed 5,500 chargeable hours and recorded $21,500 of depreciation. Required: 1. Determine the flexible-budget amount for equipment depreciation in September. 2. Compute the spending variance for the depreciation on equipment. Was the variance favorable (F) or unfavorable (U)? (Leave no cell blank; if there is...
Walkenhorst Company's machining department prepared its 2019 budget based on the following data: 40,000 units 2 Practical capacity Standard machine hours per unit Standard variable factory overhead Budgeted fixed factory overhead $3.00 per machine hour $424,000 The department uses machine hours to apply factory overhead to production. In 2019, the department used 85,800 machine hours and incurred $689,000 in total manufacturing overhead cost to manufacture 42,070 units. Actual fixed overhead cost for the year was $437,000. Required: Determine for the...
As the new accountant for Cohen & Co., you have been asked
to provide a succinct analysis of financial performance for the
year just ended. You obtain the following information that pertains
to the company’s sole product:
Actual
Master (Static) Budget
Units sold
40,000
45,000
Sales
$
380,000
$
450,000
Variable costs
210,000
270,000
Fixed costs
145,000
135,000
Required:
1. What was the actual operating income for the period?
2. What was the company’s master (static) budget operating
income for...
Walkenhorst Company's machining department prepared its 2019 budget based on the following data: Practical capacity Standard machine hours per unit Standard variable factory overhead Budgeted fixed factory overhead 40,000 units 2 $3.00 per machine hour $352,000 The department uses machine hours to apply factory overhead to production. In 2019, the department used 87,000 machine hours and incurred $619,000 in total manufacturing overhead cost to manufacture 42,190 units. Actual fixed overhead cost for the year was $371,000. Required: Determine for the...
Walkenhorst Company's machining department prepared its 2019 budget based on the following data: 40,000 units Practical capacity Standard machine hours per unit Standard variable factory overhead Budgeted fixed factory overhead $3.00 per machine hour $368,000 The department uses machine hours to apply factory overhead to production. In 2019, the department used 88,000 machine hours and incurred $636,000 in total manufacturing overhead cost to manufacture 43,000 units. Actual fixed overhead cost for the year was $380,000. Required: Determine for the year:...
As the new accountant for Cohen & Co., you have been asked
to provide a succinct analysis of financial performance for the
year just ended. You obtain the following information that pertains
to the company’s sole product:
Actual
Master (Static) Budget
Units sold
25,000
30,000
Sales
$
402,000
$
456,000
Variable costs
232,000
276,000
Fixed costs
161,000
141,000
Required:
1. What was the actual operating income for the period?
2. What was the company’s master (static) budget operating
income for...
As the new accountant for Cohen & Co., you have been asked to provide a succinct analysis of financial performance for the year just ended. You obtain the following information that pertains to the company's sole product: Master (Static) Budget 50,000 $458,000 278,000 143,000 Actual 45,000 $412,000 242,000 Units sold Sales Variable costs Fixed costs 151,000 Required: 1. What was the actual operating income for the period? 2. What was the company's master (static) budget operating income for the period?...
As the new accountant for Cohen & Co., you have been asked to provide a succinct analysis of financial performance for the year just ended. You obtain the following information that pertains to the company's sole product: Units sold Sales Variable costs Fixed costs Actual 25,000 $ 408,000 238,000 161,000 Master (Static) Budget 30,000 $ 456,000 276,000 141,000 Required: 1. What was the actual operating income for the period? 2. What was the company's master (static) budget operating income for...
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