Forsyth Company uses estimated direct labor hours of 150,000 and estimated overhead costs of $337,500 in establishing its 2012 predetermined manufacturing overhead rate. Actually result showed:
Actual manufacturing overhead $346,500
Allocated manufacturing overhead $343,800
The number of direct labor hours worked during the period was :
A. 146,000
B. 152,800
C. 154,000
D. 150,000
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Problem 24-4A |
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Your answer is correct. |
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Johnson Manufacturing Inc. operates the Patio Furniture Division as a profit center. Operating data for this division for the year ended December 31, 2012, are as shown below.
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Budget |
Difference |
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Sales |
$2,500,000 |
$60,000 |
F |
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Cost of goods sold |
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Variable |
1,300,000 |
41,000 |
F |
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Controllable fixed |
200,000 |
6,000 |
U |
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Selling and administrative |
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Variable |
220,000 |
7,000 |
U |
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Controllable fixed |
50,000 |
2,000 |
U |
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Noncontrollable fixed costs |
70,000 |
4,000 |
U |
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In addition, Johnson Manufacturing incurs $180,000 of indirect fixed costs
that were budgeted at $175,000. Twenty percent (20%) of these costs are
allocated to the Patio Furniture Division.
Prepare a responsibility report for the Patio Furniture Division for the year.
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Problem 24-1A |
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Chamberlin Company estimates that 360,000 direct labor hours will be worked during the coming year, 2012, in the Packaging Department. On this basis, the following budgeted manufacturing overhead cost data are computed for the year.
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Fixed Overhead Costs |
Variable Overhead Costs |
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Supervision |
$90,000 |
Indirect labor |
$126,000 |
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Depreciation |
60,000 |
Indirect materials |
90,000 |
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Insurance |
30,000 |
Repairs |
54,000 |
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Rent |
24,000 |
Utilities |
72,000 |
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Property taxes |
18,000 |
Lubricants |
18,000 |
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$222,000 |
$360,000 |
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It is estimated that direct labor hours worked each month will range
from 27,000 to 36,000 hours.
During October, 27,000 direct labor hours were worked and the
following overhead costs were incurred.
Fixed overhead costs: Supervision $7,500, Depreciation $5,000, Insurance
$2,470, Rent $2,000, and Property taxes $1,500.
Variable overhead costs: Indirect labor $10,360, Indirect materials,
$6,400, Repairs $4,000, Utilities $5,700, and Lubricants $1,640.
Prepare a monthly manufacturing overhead flexible budget for each increment of 3,000 direct labor hours over the relevant range for the year ending December 31, 2012.
Prepare a flexible budget report for October.
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Problem 24-1A |
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Chamberlin Company estimates that 360,000 direct labor hours will be worked during the coming year, 2012, in the Packaging Department. On this basis, the following budgeted manufacturing overhead cost data are computed for the year.
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Fixed Overhead Costs |
Variable Overhead Costs |
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Supervision |
$90,000 |
Indirect labor |
$126,000 |
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Depreciation |
60,000 |
Indirect materials |
90,000 |
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Insurance |
30,000 |
Repairs |
54,000 |
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Rent |
24,000 |
Utilities |
72,000 |
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Property taxes |
18,000 |
Lubricants |
18,000 |
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$222,000 |
$360,000 |
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It is estimated that direct labor hours worked each month will range
from 27,000 to 36,000 hours.
During October, 27,000 direct labor hours were worked and the
following overhead costs were incurred.
Fixed overhead costs: Supervision $7,500, Depreciation $5,000, Insurance
$2,470, Rent $2,000, and Property taxes $1,500.
Variable overhead costs: Indirect labor $10,360, Indirect materials,
$6,400, Repairs $4,000, Utilities $5,700, and Lubricants $1,640.
Prepare a monthly manufacturing overhead flexible budget for each increment of 3,000 direct labor hours over the relevant range for the year ending December 31, 2012.
Prepare a flexible budget report for October.
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Problem 23-4A |
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Singh Company prepares monthly cash budgets. Relevant data from operating budgets for 2013 are:
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January |
February |
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Sales |
$350,000 |
$400,000 |
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Direct materials purchases |
110,000 |
130,000 |
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Direct labor |
90,000 |
100,000 |
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Manufacturing overhead |
70,000 |
75,000 |
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Selling and administrative expenses |
79,000 |
86,000 |
All sales are on account. Collections are expected to be 50% in the month
of sale, 30% in the first month following the sale, and 20% in the
second month following the sale. Sixty percent (60%) of direct materials
purchases are paid in cash in the month of purchase, and the balance due is
paid in the month following the purchase. All other items above are paid in the
month incurred except for selling and administrative expenses that include
$1,000 of depreciation per month.
Other data:
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1. |
Credit sales: November 2012, $260,000; December 2012, $320,000. |
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2. |
Purchases of direct materials: December 2012, $100,000. |
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3. |
Other receipts: January—Collection of December 31, 2012, notes receivable $15,000; February—Proceeds from sale of securities $6,000. |
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4. |
Other disbursements: February—Withdrawal of $5,000 cash for personal use of owner, Dwight Yocum. |
The company’s cash balance on January 1, 2013, is expected to be $60,000. The
company wants to maintain a minimum cash balance of $50,000.
Prepare schedules for (1) expected collections from customers and (2) expected payments for direct materials purchases.
Prepare a cash budget for January and February in columnar form. (If answer is 0 then please enter 0. Do not leave any fields blank.)
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Problem 23-3A |
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Remington Industries had sales in
2012 of $6,400,000 and gross profit of $1,100,000. Management is
considering two alternative budget plans to increase its gross profit in 2013.
Plan A would increase the selling price per unit from $8 to $8.40. Sales
volume would decrease by 5% from its 2012 level. Plan B would decrease the
selling price per unit by $0.50. The marketing department expects that the
sales volume would increase by 150,000 units.
At the end of 2012, Remington has 40,000 units of inventory on hand.
If Plan A is accepted, the 2013 ending inventory should be equal to 5% of
the 2013 sales. If Plan B is accepted, the ending inventory should be equal
to 50,000 units. Each unit produced will cost $1.80 in direct
labor, $2.00 in direct materials, and $1.20 in variable overhead. The
fixed overhead for 2013 should be $1,895,000.
Prepare a sales budget for 2013 under each plan.
Prepare a production budget for 2013 under each plan.
Compute the production cost per unit under each plan. (Round Unit cost to 2 decimal places, e.g. $25.28.)
Calculate the gross profit for each plan. (Round answers to 0 decimal places, e.g. $2,520.)
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Problem 23-1A |
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Greene Farm Supply Company manufactures and sells a pesticide called Snare. The following data are available for preparing budgets for Snare for the first 2 quarters of 2013.
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1. |
Sales: Quarter 1, 28,000 bags; quarter 2, 42,000 bags. Selling price is $60 per bag. |
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2. |
Direct materials: Each bag of Snare requires 4 pounds of Gumm at a cost of $4 per pound and 6 pounds of Tarr at $1.50 per pound. |
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3. |
Desired inventory levels: |
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Type of Inventory |
January 1 |
April 1 |
July 1 |
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Snare (bags) |
8,000 |
12,000 |
18,000 |
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Gumm (pounds) |
9,000 |
10,000 |
13,000 |
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Tarr (pounds) |
14,000 |
20,000 |
25,000 |
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4. |
Direct labor: Direct labor time is 15 minutes per bag at an hourly rate of $14 per hour. |
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5. |
Selling and administrative expenses are expected to be 15% of sales plus $175,000 per quarter. |
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6. |
Income taxes are expected to be 30% of income from operations. |
Your assistant has prepared two budgets: (1) The manufacturing overhead budget
shows expected costs to be 150% of direct labor cost. (2) The direct
materials budget for Tarr shows the cost of Tarr purchases to be
$297,000 in quarter 1 and $421,500 in quarter 2.
Prepare the sales budget.
Prepare the production budget.
Prepare the direct materials budget for Gumm.
Prepare the direct labor budget. (Round hours per unit to 2 decimal places, e.g. 0.20.)
Prepare the selling and administrative expense budget. (Note: Use variable and fixed in the selling and administrative expense budget.)
Compute the cost per bag. (Round Unit cost to 2 decimal places, e.g. $25.28.)
Prepare the budgeted income statement for the first 6 months.
