Discuss the advantages of flexible budgets used by a company over static budgets as a tool for planning and as a tool for control.
Discuss the merits of each advantage. Please include examples so that we can assess your knowledge.
(2) Management systems have three basic components : Planning, control, and feedback. In your response determine their relevance to management.
(3) The following data relates to Merrick Ltd., a single product company who manufactures vaccines:
Variances for October:
DIRECT MATERIAL QUANTITY VARIANCE 2400 UNFAVORABLE
MATERIALS VARIANCE (TOTAL) 600 FAVORABLE
DIRECT LABOR EFFICIENCY VARIANCE 9000 FAVORABLE
Actual materials and labor costs for October:
Direct materials purchased: 6,000 pounds @ $5.50 per pound | $33,000 |
Direct labor cost: ? hours @ ? per hour | $57,000 |
Materials and labor standards to manufacture one unit of vaccine:
Quantity/hours | Price/rate | Standard cost | |
Direct materials | ? pounds | ? per pounds | ? pounds |
Direct labor | 2.5 hours | $18 per hour | $45 |
Merrick Ltd. manufactured and sold 1,400 units of vaccines during October. There were no materials and finished goods inventories at the start and end of the October.
Required:
Discuss the advantages of flexible budgets used by a company over static budgets as a tool...
tem. In 2020, the company produced 27,900 units. Each unit took several pounds of direct materials ndard hourly rate of $13.00. Normal capacity was 49,700 direct labor hours. During the year, 1.30.300 pounds and 1.6 standard hours of direct labor at a purchased at $0.93 per pound. All materials purchased were used during the year What was the standard cost per unit of product? (Round answer to 2 decimal places, e-g. 2.75. $ Standard cost per unit If the 2.75.)...
Jones Company has the following standards for its single product: standard quantity standard price direct materials 11 pounds per unit $4.25 per pound direct labor 8 hours per unit $14.00 per hour variable overhead 8 hours per unit ?????? per hour Jones Company reported the following information for the month of October: 1. 9,140 units were produced. 2. The direct material quantity variance was $36,295 favorable. 3. The variable overhead spending variance was $1,520 favorable. 4. The total direct labor...
Bovar Company began the manufacture of new paging machines. The company installed a standard costing system to account for manufacturing costs. The standard cost per unit is: Direct materials 3 pound @ $5 per pound Direct labor .5 hours @ $20 per direct labor hour Variable overhead 75% of direct labor cost Actual production was 4,000 units; actual sales were 2,500 units. There is no beginning inventory for direct materials. Other data are: Materials price variance is...
Amber Company produces iron table and chair sets. During October, Amber's costs were as follows: Actual purchase price Actual direct labor rate Standard purchase price Standard quantity for sets produced Standard direct labor hours allowed Actual quantity purchased in October Actual direct labor hours Actual quantity used in October Direct labor rate variance $ 1.30 per lb. $ 6.50 per hour $ 1.10 per lb. 870,000 lbs. 15,000 1,015,000 lbs. 7,000 900,000 lbs. $4,500 F Required: 1. Calculate the total...
Amber Company produces iron table and chair sets. During October, Amber's costs were as follows: Actual purchase price Actual direct labor rate Standard purchase price Standard quantity for sets produced Standard direct labor hours allowed Actual quantity purchased in October Actual direct labor hours Actual quantity used in October Direct labor rate variance $ 1.90 per lb. $7.10 per hour $ 1.70 per lb. 930,000 lbs. 15,000 1,075,000 lbs. 8,000 960,000 lbs. $5,100 F Required: 1. Calculate the total cost...
Amber Company produces iron table and chair sets. During October, Amber's costs were as follows: Actual purchase price Actual direct labor rate Standard purchase price Standard quantity for sets produced Standard direct labor hours allowed Actual quantity purchased in October Actual direct labor hours Actual quantity used in October Direct labor rate variance $ 1.30 per lb. $ 6.50 per hour $ 1.10 per lb. 870,000 lbs. 15,000 1,015,000 lbs. 7,000 900,000 lbs. $4,500 F Required: 1. Calculate the total...
Amber Company produces iron table and chair sets. During October, Amber's costs were as follows: Actual purchase price Actual direct labor Standard purchase price Standard quantity for sets produced Standard direct labor hours allowed Actual quantity purchased in October Actual direct labor hours Actual quantity used in October Direct labor rate variance $ 2.60 per lb. $ 7.80 per hour $ 2.40 per lb. 1,000,000 lbs. 17,000 1,175,000 lbs. 13,000 1,030,000 lbs. $5,800 F Required: 1. Calculate the total cost...
1 Preble Company manufactures one product. Its variable manufacturing overhead is applied to production based on direct labor- hours and its standard cost card per unit is as follows: 2 3 4. 5 6 7 (1) (2) Standard Standard Quantity Price or Hours or Rate 5 pounds $8.00 per pound 2 hours $14 per hour 2 hours $5 per hour 8 Inputs Direct materials Direct labor Variable overhead Total standard cost per unit Standard Cost (1) (2) $40.00 28.00 10.00...
Amber Company produces iron table and chair sets. During October, Amber's costs were as follows: $ 2.10 per lb $7.30 per hour $1.90 per lb. 950,000 lbs. 15,000 1,095,000 lbs 10,000 980.000 lbs. $5,300 F Actual purchase price Actual direct labor rate Standard purchase price Standard quantity for sets produced Standard direct labor hours allowed Actual quantity purchased in October Actual direct labor hours Actual quantity used in October Direct labor rate variance Required: 1. Calculate the total cost of...
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