connect assignent

1.Huron Company produces a commercial cleaning compound known as Zoom. The direct materials and direct labor standards for one unit of Zoom are given below:

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Standard Quantity or Hours

Standard Price
or Rate

Standard Cost

Direct materials

6.4

pounds

$

3.00

per pound

$

19.20

Direct labor

0.4

hours

$

11.00

per hour

$

4.40


During the most recent month, the following activity was recorded:

a.

Twelve thousand four hundred pounds of material were purchased at a cost of $2.90 per pound.

b.

The company produced only 1,240 units, using 11,160 pounds of material. (The rest of the material purchased remained in raw materials inventory.)

c.

Five hundred and ninety six hours of direct labor time were recorded at a total labor cost of $7,152.

Required:

Compute the materials price and quantity variances for the month. (Indicate the effect of each variance by selecting “F” for favorable, “U” for unfavorable, and “None” for no effect (i.e., zero variance). Do not round intermediate calculations.)

Direct materials price variance

Direct materials quantity variance

2. SkyChefs, Inc., prepares in-flight meals for a number of major airlines. One of the company’s products is grilled salmon in dill sauce with baby new potatoes and spring vegetables. During the most recent week, the company prepared 7,200 of these meals using 3,500 direct labor-hours. The company paid these direct labor workers a total of $31,500 for this work, or $9.00 per hour.

According to the standard cost card for this meal, it should require 0.50 direct labor-hours at a cost of $8.50 per hour.

Required:

1.

According to the standards, what direct labor cost should have been incurred to prepare 7,200 meals? How much does this differ from the actual direct labor cost? (Round labor-hours per meal and labor cost per hour to 2 decimal places.)

Number of meals prepared

Standard direct labor-hours per meal

Total direct labor-hours allowed

Standard direct labor cost per hour

Total standard direct labor cost

Actual cost incurred

Total standard direct labor cost

Total direct labor variance

2.

Break down the difference computed in (1) above into a labor rate variance and a labor efficiency variance. (Indicate the effect of each variance by selecting “F” for favorable, “U” for unfavorable, and “None” for no effect (i.e., zero variance).)

Labor rate variance

Labor efficiency variance

3.Dawson Toys, Ltd., produces a toy called the Maze. The company has recently established a standard cost system to help control costs and has established the following standards for the Maze toy:

Direct materials: 7 microns per toy at $0.32 per micron

Direct labor: 1.5 hours per toy at $6.80 per hour

During July, the company produced 4,900 Maze toys. Production data for the month on the toy follow:

Direct materials: 80,000 microns were purchased at a cost of $0.30 per micron. 37,125 of these microns were still in inventory at the end of the month.

Direct labor: 7,850 direct labor-hours were worked at a cost of $58,875.

Required:

1.

Compute the following variances for July: (Indicate the effect of each variance by selecting “F” for favorable, “U” for unfavorable, and “None” for no effect (i.e., zero variance). Do not round intermediate calculations. Round final answer to the nearest whole dollar.)

a.

The materials price and quantity variances.

Material price variance

Material quantity variance

b.

The labor rate and efficiency variances.

Labor rate variance

Labor efficiency variance

4.Logistics Solutions provides order fulfillment services for dot.com merchants. The company maintains warehouses that stock items carried by its dot.com clients. When a client receives an order from a customer, the order is forwarded to Logistics Solutions, which pulls the item from storage, packs it, and ships it to the customer. The company uses a predetermined variable overhead rate based on direct labor-hours.

In the most recent month, 150,000 items were shipped to customers using 5,900 direct labor-hours. The company incurred a total of $18,290 in variable overhead costs.

According to the company’s standards, 0.03 direct labor-hours are required to fulfill an order for one item and the variable overhead rate is $3.15 per direct labor-hour.

Required:

1.

According to the standards, what variable overhead cost should have been incurred to fill the orders for the 150,000 items? How much does this differ from the actual variable overhead cost? (Round labor-hours per item and overhead cost per hour to 2 decimal places.)

Number of items shipped

Standard direct labor-hours per item

Total direct labor-hours allowed

Standard variable overhead cost per hour

Total standard variable overhead cost

Actual variable overhead cost incurred

Total standard variable overhead cost

Total variable overhead variance

2.

Break down the difference computed in (1) above into a variable overhead rate variance and a variable overhead efficiency variance. (Indicate the effect of each variance by selecting “F” for favorable, “U” for unfavorable, and “None” for no effect (i.e., zero variance).)

Variable overhead rate variance

Variable overhead efficiency variance

5.Purchase of poor quality materials may cause a favorable materials price variance and an unfavorable labor efficiency variance.

oTrue

oFalse

Part 2

1.The following costs were incurred in September:

Direct materials

$43,500

Direct labor

$29,100

Manufacturing overhead

$26,100

Selling expenses

$18,800

Administrative expenses

$37,700

Conversion costs during the month totaled:

o$55,200

o$69,600

o$155,200

o$72,600

2.A soft drink bottler incurred the following factory utility cost: $3,836 for 1,000 cases bottled and $3,900 for 1,300 cases bottled. Factory utility cost is a mixed cost containing both fixed and variable components. The variable factory utility cost per case bottled is closest to:

$3.84

$0.21

$3.00

$2.95

3.The following cost data pertain to the operations of Swestka Department Stores, Inc., for the month of July.

Corporate headquarters building lease

$82,600

Cosmetics Department sales commissions–Northridge Store

$5,160

Corporate legal office salaries

$60,100

Store manager’s salary-Northridge Store

$11,300

Heating-Northridge Store

$13,500

Cosmetics Department cost of sales–Northridge Store

$31,300

Central warehouse lease cost

$15,500

Store security-Northridge Store

$20,400

Cosmetics Department manager’s salary–Northridge Store

$4,240

The Northridge Store is just one of many stores owned and operated by the company. The Cosmetics Department is one of many departments at the Northridge Store. The central warehouse serves all of the company’s stores.

What is the total amount of the costs listed above that are direct costs of the Cosmetics Department?

$40,700

$94,340

$36,460

$31,300

4.Erkkila Inc. reports that at an activity level of 6,700 machine-hours in a month, its total variable inspection cost is $424,130 and its total fixed inspection cost is $166,530.

What would be the average fixed inspection cost per unit at an activity level of 7,000 machine-hours in a month? Assume that this level of activity is within the relevant range.

$23.79

$88.16

$24.86

$38.45

5.Nikkel Corporation, a merchandising company, reported the following results for July:

Sales

$413,000

Cost of goods sold (all variable)

$173,100

Total variable selling expense

$23,000

Total fixed selling expense

$19,300

Total variable administrative expense

$17,400

Total fixed administrative expense

$31,000

The contribution margin for July is:

$362,700

$149,200

$199,500

$239,900

6.Job 593 was recently completed. The following data have been recorded on its job cost sheet:

Direct materials

$2,491

Direct labor-hours

74

labor-hours

Direct labor wage rate

$ 20

per labor-hour

Machine-hours

129

machine-hours

The Corporation applies manufacturing overhead on the basis of machine-hours. The predetermined overhead rate is $21 per machine-hour. The total cost that would be recorded on the job cost sheet for Job 593 would be:

$7,520

$6,680

$3,971

$4,004

7.The Assembly Department started the month with 18,500 units in its beginning work in process inventory. An additional 286,500 units were transferred in from the prior department during the month to begin processing in the Assembly Department. There were 37,250 units in the ending work in process inventory of the Assembly Department.

How many units were transferred to the next processing department during the month?

305,250

267,750

305,000

342,250

8.Lasseter Corporation has provided its contribution format income statement for August. The company produces and sells a single product.

Sales (4,300 units)

$

150,500

Variable expenses

73,100



Contribution margin

77,400

Fixed expenses

44,600



Net operating income

$

32,800





If the company sells 4,400 units, its total contribution margin should be closest to:

$33,563

$77,400

$79,200

$80,900

9.Olds Inc., which produces a single product, has provided the following data for its most recent month of operations:

Number of units produced

7,000

Variable costs per unit:

Direct materials

$87

Direct labor

$75

Variable manufacturing overhead

$5

Variable selling and administrative expense

$10

Fixed costs:

Fixed manufacturing overhead

$273,000

Fixed selling and administrative expense

$497,000

There were no beginning or ending inventories. The absorption costing unit product cost was:

$162 per unit

$206 per unit

$167 per unit

$287 per unit

10.Zurasky Corporation is considering two alternatives: A and B. Costs associated with the alternatives are listed below:

Alternative A

Alternative B

Materials costs

$39,000

$50,000

Processing costs

$45,000

$45,000

Equipment rental

$10,800

$28,400

Occupancy costs

$19,400

$29,800

What is the differential cost of Alternative B over Alternative A, including all of the relevant costs?

$39,000

$153,200

$114,200

$142,400

11.Bossie Corporation uses an activity-based costing system with three activity cost pools. The company has provided the following data concerning its costs and its activity based costing system:

Costs:

Wages and salaries

$285,000

Depreciation

243,000

Utilities

170,000

Total

$698,000

Distribution of resource consumption:

Activity Cost Pools

Assembly

Setting up

Other

Total

Wages and salaries

55%

35%

10%

100%

Depreciation

10%

20%

70%

100%

Utilities

15%

55%

30%

100%

How much cost, in total, would be allocated in the first-stage allocation to the Assembly activity cost pool?

o$193,883

o$206,550

o$383,900

o$104,700

12.The cash budget is usually prepared after the budgeted income statement.

oTrue

oFalse

13.Cadavieco Detailing’s cost formula for its materials and supplies is $1,890 per month plus $8 per vehicle. For the month of November, the company planned for activity of 84 vehicles, but the actual level of activity was 49 vehicles. The actual materials and supplies for the month was $2,450.

The materials and supplies in the planning budget for November would be closest to:

o$4,153

o$2,450

o$2,562

o$2,282

14.Aide Industries is a division of a major corporation. Data concerning the most recent year appears below:

Sales

$17,570,000

Net operating income

$860,930

Average operating assets

$4,950,000

The division’s return on investment (ROI) is closest to: (Round your answer to 2 decimal places.)

o4.90%

o17.39%

o13.54%

o1.90%

15.Blue Corporation’s standards call for 7,800 direct labor-hours to produce 1,950 units of product. During May 1,300 units were produced and the company worked 1,850 direct labor-hours. The standard hours allowed for May production would be:

o7,800 hours

o1,850 hours

o5,200 hours

o6,500 hours

16.The following standards for variable manufacturing overhead have been established for a company that makes only one product:

Standard hours per unit of output

8.4

hours

Standard variable overhead rate

$14.80

per hour

The following data pertain to operations for the last month:

Actual hours

2,900

hours

Actual total variable manufacturing overhead cost

$43,670

Actual output

250

units

What is the variable overhead efficiency variance for the month?

o$12,590 U

o$11,840 U

o$750 F

o$31,080 F

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17.Wyly Inc. produces and sells a single product. The selling price of the product is $185.00 per unit and its variable cost is $55.50 per unit. The fixed expense is $404,670 per month.

The break-even in monthly dollar sales is closest to: (Round your intermediate calculations to 2 decimal places.)

$1,348,900

$944,230

$578,100

$404,670

18.Part O43 is used in one of Scheetz Corporation’s products. The company’s Accounting Department reports the following costs of producing the 16,700 units of the part that are needed every year.

Per Unit

Direct materials

$3.90

Direct labor

$4.60

Variable overhead

$7.60

Supervisor’s salary

$8.30

Depreciation of special equipment

$8.90

Allocated general overhead

$5.90


An outside supplier has offered to make the part and sell it to the company for $32.00 each. If this offer is accepted, the supervisor’s salary and all of the variable costs, including direct labor, can be avoided. The special equipment used to make the part was purchased many years ago and has no salvage value or other use. The allocated general overhead represents fixed costs of the entire company. If the outside supplier’s offer were accepted, only $22,700 of these allocated general overhead costs would be avoided.

Required:

a.

Prepare a report that shows the effect on the company’s total net operating income of buying part O43 from the supplier rather than continuing to make it inside the company. (Input the amount as a positive value. Omit the “$” sign in your response.)

Net operating income would be by $ .

b.

Which alternative should the company choose?

Buy

Make

19.Activity rates from Quattrone Corporation’s activity-based costing system are listed below. The company uses the activity rates to assign overhead costs to products:

Activity Cost Pools

Activity Rate

Processing customer orders

$97.55

per customer order

Assembling products

$1.54

per assembly hour

Setting up batches

$61.11

per batch

Last year, Product F76D involved 7 customer orders, 449 assembly hours, and 20 batches. How much overhead cost would be assigned to Product F76D using the activity-based costing system?

$2,596.51

$67,505.35

$1,222.20

$743.20

20.The Gasson Company uses the weighted-average method in its process costing system. The company’s ending work in process inventory consists of 16,000 units, The ending work in process inventory is 100% complete with respect to materials and 80% complete with respect to labor and overhead. If the costs per equivalent unit for the period $3.20 for the materials and $2.30 for labor and overhead, whatis the balance of the ending work in process inventory account would be: (Do not round Cost per equivalent unit)

$72,140

$80,640

$88,000

$50,700

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