View the step-by-step solution to:

Question 1) Arlon Co. manufactures three types of cookies. Fluffs, Crinkles, and Snaps.

Question 1)
Arlon Co. manufactures three types of cookies.  Fluffs, Crinkles, and Snaps.  The production process is relatively simple, and factory overhead costs are allocated to products using a single plant-wide factory rate based on direct labor hours.  Information for the month of May 2008, Arlon's first month of operations, follows:
                                    Budgeted                     Direct Labor
                                    Unit Volume               Hours per unit
Fluffs                          80,000 boxes                           0.10
Crinkles                      60,000 boxes                           0.20
Snaps                          20,000 boxes                           1.00
Arlon has budgeted direct labor costs for May at $4.50 per hour.  Budgeted direct materials costs for May are:  Fluffs, $0.85/unit: Crinkles $0.40/unit; and Snaps $0.30/unit.
Arlon's budgeted overhead costs for May are:
Indirect labor                                      $280,000
Utilities                                                   65,000
Supplies                                                  45,000
Depreciation                                          30,000
            Total                                       $420,000
Assume that Arlon sells all the boxes it produces in May.
a)  compute Arlon's plant-wide factory overhead rate for May.
b)  compute May's product cost for each type of cookie.
c)  does Arlon's use of a plant-wide factory overhead rate in any way distort May's product costs?
Question 2)
Prepare a flexible budget for Dandy Jeans Company using production levels of 16,000, 18,000, and 20,000 units produced.  The following is additional information necessary to complete the budget:
Variable costs:
Direct Labor ($6.00 per unit)
            Direct Materials ($8.00 per unit)
            Variable Manufacturing Costs ($2.50 per unit)
Fixed costs:
            Supervisor's Salaries             $80,000
            Rent                                        $12,000
            Depreciation on Equipment   $24,000
Question 3)
Standard and actual cost for direct materials for the manufacture of 1,000 units of product were as follows:
Actual costs                1,550 lbs. @ $9.10
Standard costs            1,600 lbs. @ $9.00
Determine the following:
a)  quantity variance
b)  price variance
c)  direct materials cost variance

Recently Asked Questions

Why Join Course Hero?

Course Hero has all the homework and study help you need to succeed! We’ve got course-specific notes, study guides, and practice tests along with expert tutors.


Educational Resources
  • -

    Study Documents

    Find the best study resources around, tagged to your specific courses. Share your own to gain free Course Hero access.

    Browse Documents
  • -

    Question & Answers

    Get one-on-one homework help from our expert tutors—available online 24/7. Ask your own questions or browse existing Q&A threads. Satisfaction guaranteed!

    Ask a Question