Quiz 09 & 10_Solution

Quiz 09 & 10_Solution - 6A:130 Fall 2007 Quiz 9 & 10...

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6A:130 – Fall 2007 Quiz 9 & 10 1 of 8 This quiz is worth 20 points total. It will be subdivided into two 10 point quizzes. This is due in my office by 4:00pm on TUESDAY, NOVEMBER 27. Solution will be available at 5:00pm on Tuesday (11/27). To receive credit you must show your work . STU Company is a manufacturer of high-end walking/hiking staffs. They make the sticks out of two types of material – titanium and aluminum. The owner of the company is pleased that they made a profit; however, she is curious as to what caused the operating income to be $845,000 lower than plan. In addition, she would like your suggestions on the underlying causes of the variances and a course of action for improvement. Actua l Budget Difference Sales revenue 5,130,000 $ 5,600,000 $ 470,000 $ U Costs 4,795,000 4,420,000 375,000 U Operating profits 335,000 $ 1,180,000 $ 845,000 $ U Additional detail information follows: STU Company Master Description Budget Actual Market size 80,000 60,000 Market share 25% 30% Sales volume 20,000 18,000 TI Staffs 4,000 5,400 AL Staffs 16,000 12,600 Total sales volume 20,000 18,000 Selling price: TI Staffs 400.00 $ 390.00 $ AL Staffs 250.00 $ 240.00 $ Variable costs (inputs) Titanium Staffs DM -- Units/product 1.0 2.0 DM -- Price/u 50.00 $ 30.00 $ DL -- Hours/product 3.0 4.0 DL -- Rate/hour 25.00 $ 30.00 $ VMOH -- DLH/product 3.0 4.0 VMOH -- Rate/hour 45.00 $ 50.00 $ Aluminum Staffs DM -- Units/product 2.0 3.0 DM -- Price/u 20.00 $ 12.00 $ DL -- Hours/product 2.0 1.8 DL -- Rate/hour 25.00 $ 30.00 $ VMOH -- DLH/product 2.0 1.8 VMOH -- Rate/hour 45.00 $ 50.00 $ FMOH 500,000 $ 475,000 $
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6A:130 – Fall 2007 Quiz 9 & 10 2 of 8 Required A. QUIZ 9 ( 10 points total) > Perform the following – make sure all variances are marked as F (favorable)or U (unfavorable); all activity is for the year ended June 30: SEE ATTACHED SCHEDULES FOR SOLUTION SUPPORT 1. Develop an income statement (through contribution margin) detailing STU Company’s Master Budget, Flexible Budget and actual results for the year ending June 30. STU Company Flexible Master Actual Budget Budget Sales volume TI Staffs 5,400 0 5,400 1,400 U 4,000 AL Staffs 12,600 0 12,600 (3,400) F 16,000 Total sales volume 18,000 0 18,000 (2,000) F 20,000 Sales revenue TI Staffs 2,106,000 $ (54,000) U 2,160,000 $ 560,000 $ F 1,600,000 $ AL Staffs 3,024,000 (126,000) U 3,150,000 (850,000) U 4,000,000 Total sales revenue 5,130,000 (180,000) U 5,310,000 (290,000) U 5,600,000 Variable costs: Direct materials TI Staffs 324,000 54,000 U 270,000 70,000 U 200,000 AL Staffs 453,600 (50,400) F 504,000 (136,000) F 640,000 Total DM 777,600 3,600 U 774,000 (66,000) F 840,000 Direct labor TI Staffs 648,000 243,000 U 405,000 105,000 U 300,000 AL Staffs 680,400 50,400 U 630,000 (170,000) F 800,000 Total DL 1,328,400 293,400 U 1,035,000 (65,000) F 1,100,000 VMOH TI Staffs 1,080,000 351,000 U 729,000 189,000
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This test prep was uploaded on 04/07/2008 for the course ACCT 130 taught by Professor Hartman during the Fall '07 term at University of Iowa.

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Quiz 09 & 10_Solution - 6A:130 Fall 2007 Quiz 9 & 10...

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