{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

midterm2_08 - Economics 137B Fall 2008 Student Name...

Info iconThis preview shows pages 1–6. Sign up to view the full content.

View Full Document Right Arrow Icon
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Background image of page 2
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Background image of page 4
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Background image of page 6
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Economics 137B Fall 2008 Student Name Instructor — Lisa Maass Perm # Midterm 2 — Version 1 Instructions: This exam is worth a total of 275 points. Point and suggested time allocations are specified at the beginning of each problem. All of your answers and supporting calculations must be written on the solutions pages provided at the back of this exam. You must show your work in order to receive credit for your answers. Problem 1 (150 pts., suggested time — 40 min.) Adiamo Company prepares its budgets on the basis of standard costs. For 2008, the Company used the following standard costs per unit for direct materials and direct labor: Direct materials: 3 kilograms @ $.90 per kilogram $ 2.70 Direct labor: 2 hours at $6.00 per hour $12.00 Actual data for the month of October 2008 follows: Direct materials purchased 9,000 kilograms at $.85 per kilogram Production 2,000 units, using 5,600 kilograms of direct materials and 3,900 hours of direct labor The total direct labor variance for October 2008 was $1 ,350 unfavorable. Required: 1. Compute the direct materials price and quantity variances for the month of October 2008. 2. Compute the direct labor rate and efficiency variances for the month of October 2008. 3. Prepare thejournal entries to record the activity relating to direct materials and direct labor, and all of the related variances, for the month of October 2008. 4. Suggest a plausible reason for the direct labor rate and efficiency variances computed in 2. above. Explain your answer. Problem 2 (125 pts., suggested time — 35 min.) The Brady Company manufactures a fuel additive that has a selling price of $110 per drum. The Company’s standard monthly production and sales volume is 100,000 drums. During the month of October 2008, the Company produced and sold only 80,000 drums due to the loss of a government contract. The Company’s cost accountant has provided the following information: Standard costs per drum of product manufactured for 2008: Materials: 8 gallons of Miracle Mix $32.00 1 empty drum 2.00 Direct labor — 2 hours 18.00 Manufacturing overhead: Variable 5.40 Fixed 12.60 Overhead is applied using a predetermined rate based on direct labor hours. Actual costs for the month of October 2008: Miracle Mix: _ 500,000 gallons purchased at a cost of $1,900,000; 650,000 gallons used , Empty drums: 94,000 purchased at a cost of $188,000; 80,000 used Direct labor: 164,000 hours worked at a cost of $1 ,656,400 Manufacturing overhead: Variable $ 420,000 Fixed $1,225,000 Required: 1. Compute the following variances for October 2008: a. Variable overhead spending variance b. Variable overhead efficiency variance 0. Fixed overhead budget variance d. Fixed overhead volume variance 2. Explain what each of the variances computed in 1. above indicates about the manufacturing department’s performance for the month of October 2008. You do not need to suggest reasons for these variances. 3. Prepare thejournal entry to record the variable and fixed overhead applied to work in process and to record each of the overhead variances for October 2008. CD (a ECle'éV/f‘ $454+ch Z %1 % —Maa55 Vmblw\ (:50 (As) (“ML h. 3 l y/M pmce Var (AQxAP) CAQXSF) ? (q 000x$E§S)r(q 000x490) —, lb $7,230 — 8,(OO = $450? y__¢6_\@:r m (AQg§3€>< ”>st (Ceoox 4m [(7,000 @5381: 4 W “752 MM (AH r0 (Auxsm {e ( (Hooxé’fes-or (”0024600) = ilfi‘S—OOt “H (50 (q) (H? (Li) ”:— I/ome p/z. m :(AHxML) C3HX5K>= hawk) (3,-qooxAK) [22,.1000x23x46001 Juzyo Cd c.)\ 0M0“? V 000 / 3,0100A2— $2Lf'ooo= 4mg) Lowe/ha = izsyzgo A Q = 4g.§o® ”if“ > 3. D/Méggxfii’a‘é 8,loo ‘3 D/M WmQch‘. %QO 7/ A/P (9.?fgx4.§r§g ‘ 7,;5‘0 Li :P (ego); 1:30) g, 400 5’ P/MQ ;chr 3630 7., .3 PM ($593357) $040 9 {Cowkom Mgr? [93. > )H x 5K 3. L01? @899dffl970 7,1000 Q P/L RcA-e ox. / h9g0 7/ 35L gaging/qr. AH x ML (000 7/ 5 25 S Q) 0‘3” Ana 9/ (WW; "5 0 (20 (+27} 4. {he Compakd have, useAl Mag: Luafgkggmsbflggfl C4 More hagdgH'OgE) workers “HAM (cum . ’flm‘s uJOIAcL resd JV M 6L Lfis‘Aef [NM-MK YOE’L ’HkCuA MSQM. fi'k' QoJAL also requJV .‘uk ()VOCLOQJfiofi 4-‘uMl. [061'qu (€55 ‘HAQM bucifrd—{él . @ Fmbtg.Mz/((L§f\3.) ”We (m7 l. a.xZ}.:=fl-a17ke, 0/14 :{Motyg «g C. -. (AHx/uo (lambda): 4‘ 920,000 — (IQ! 00 x $2.703 : 4 21300 F ‘f' H) W) a ,___ 5K: *S.‘-IO</$;x£+-} ZKk;5./uw+ ‘ $7.770/(Ap ‘0- CL ‘0. (a Alecia“ Var. :(Afix5&>; (SHXSRX : (prgpx #3ng —[:($'c§350(xt)x #2901 = 7 7/0 $‘~HL,8’OO —— ‘éo'oczfgztooo = JHOfB’OOQLf C. R‘ O \Ou JV Var. ‘. Ac—l—uo.\ — 6-43 +€%: %5&ox$&%®: 43080 W 5-5: LZIOPOO] “260,000 fi.;.:q$§_g0 F1 &. Freak 01H: yak/we Var. j'. guAfi—kol' A7 [6 5‘7/ q, ) ihzgo‘ooo- (goféOOx§(z.c.o) = $251000 0 ‘ m l, ooaooo ’— Cch—L. otA KQX'k‘ ()3) (7/6 (737 Z /L\Q,’F Jo 0‘th «an alak O/H Vafiauce/ (MJACO F w 1:41va jg Vmbkgm 'Z/ (Cow-L.) “Aik ccr'klcu‘m Vosm‘cflo‘e 06* mil: +64 [A643 J; wt irtcjf‘ door were. 0W (A 2, our a 9M, Jam, 0231. W98 (0 We; aweawralde Vaha'okc Q/H Jé‘m MVQHQJLce/E Q) IMQOMS more, 7/L [Ms wart M’Wauw \afl‘afimfi 4A5 hVovab‘e. ‘5‘ng O/Hr Ljai + Vamklocce mew/L} E 7 4041‘ fixwu 0/H m; {359 “mm tie/Mud- We vaavOo’obKe fixécg 0/1“? VokumeVQI/Icwce .5 (LL 7 Jm 0;th eyookudmyx bug Les; W fkauuecy. 07$ (‘3 00(3 (3» (73‘9“?) 3. WIPfG SW. 60 x8 800001 1,440,000 Q (a VMOVHQ. O/H’ Eflliq‘wfl VCU’ [Q'goo 7’ F‘xenfl O/H \10( umeVax ZSzpoO 7’ ‘/Oq/\‘a,b\e, O/H M Var. - 11,300 7" FRAI O/H @wQae, EV. [vizqo'ooo] 7,3000 2‘— O/H (him 232an 000+“; 233000) “cfigooo g [33: l “ow 0003 [4.3; l,é.£(o,0003 ...
View Full Document

{[ snackBarMessage ]}