Sheet7 page 7 palermo statuary manufactures bust

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Cornerstones of Cost Management
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Chapter 20 / Exercise 1
Cornerstones of Cost Management
Hansen/Mowen
Expert Verified
Sheet7Palermo Statuary manufactures bust statutes of famous historicalDuring 2011, actual number of units produced and sold wasfigures. All statues are the same size. Each unit requires the5200 . Actual costs of direct materials used was 693550 , basedsame amount of resources. The following information is from theon71500 pounds purchased at9.7 per pound. Directstatic budget for 2011.manufacturing labor-hours actually used were 18000 , at the rate of32.4 per hour. As a result, actual direct manufacturing laborExpected Production and sales6400costs were583200 . Actual fixed costs were 1170000 . ThereDirect materials68000were no beginning or ending inventories.Direct manufacturing labor19000Total fixed costs1500000Some quantities, standard prices, and standard unit costsfollow the direct materials and direct manufacturing labor.Standard QtyStandard PriceStandard unit costDirect materials1211132Direct manufacturing labor3.830114Requirement 1: Calculate the sales-volume variances and flexible-budget variance for operating income.Page 7ActualFlex-VarFlex-budSales VolStaticOutput units5200052001200 U6400Direct materials6935507150U686400158400 F844800Direct manufacturing labor5832009600F592800136800 F729600Fixed costs1170000330000F150000001500000Total costs2446750332450F2779200295200 F3074400All positiveAll positive92950 F69355078650068640043200 U583200540000592800100100 F52800 U
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Cornerstones of Cost Management
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Chapter 20 / Exercise 1
Cornerstones of Cost Management
Hansen/Mowen
Expert Verified
Sheet8Page 8Consider the following data collected for Great Homes, Inc.Direct MaterialsDirect manufacturing laborCosts incurred: actual inputs x actual prices20000090000Actual inputs x standard prices21400086000Standard inputs allowed for actual output22500080000x standard pricesRequirement: Compute the price, efficiency, and flexible-budget variances for direct materials and direct manufacturing labor.
Sheet9Page 9MaryDee, Inc., designs and manufactures T-shirts. It sells its T-shirts to brand-name clothes retailers in lots of one dozen. MaryDee's May 2011 static budget and actual results for direct inputs are as follows:Static Budget500Number of T-shirt lots (1 lot = 1 dozen)Per Lot of T-Shirts111.819.8Requirements: 2.00% Less Direct MaterialsDirect materials2.17.816.385.00% Less Direct Materials PriceDirect manufacturing labor2.00% Less Direct Manuf. LaborActual Results6575.81.9475Number of T-shirt lots sold5501.95 <---CHANGE THIS ONE ROUNDED FROM J9Total Direct Inputs1078Direct Materials67102.0513755.5Direct manufacturing labor11007.98690MaryDee has a policy of analyzing all input variances when they add up to more than10.00% of the total cost of materials and labor in theflexible budget, and this is true in May 2011. The production manager discusses the sources of the variances: “A new type of materialwas purchased in May. This led to faster cutting and sewing, but the workers used more material than usual as they learned to workwith it. For now, the standards are fine”May '11Actual Res.Price Var.CostEfficiency V.Flexible BudUnits550UU550Direct Materials13755.51677.5 U120781188 F10890Direct manufacturing labor8690110 U8580-429 U9009Total variances1787.5759ALL POSITIVES2546.5UNFAVORABLE12.79712548 %May '11Actual Res.Price Var.CostEfficiency V.Flexible BudUnits550550Direct Materials12822.81986.37U11836.44946.44 U10890

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