Post on 30-Dec-2015
description
Chapter 23
Exercises
Flexible Budgets and Standard
Cost Systems
Flexible BudgetsFlexible BudgetsFlexible BudgetsFlexible Budgets
In-Class Exercises:
Exercise No. Page E23-15 1451 Flexible Budget
In-Class Exercises:
Exercise No. Page E23-15 1451 Flexible Budget
(Use the format, as reflected on the next slide, to complete the exercise)
Flexible BudgetFlexible BudgetFlexible BudgetFlexible Budget
ExerciseExercise PagePage E23-15 1451 Flexible BudgetE23-15 1451 Flexible Budget
ExerciseExercise PagePage E23-15 1451 Flexible BudgetE23-15 1451 Flexible Budget
OfficePlus sells its main product, ergonomic mouse pads and provides the following information:
(1) Selling price of each pad…..$12.00
(2) Variable cost per pat………..$ 5.20
(3) Fixed costs up to 65,000 pads……$205,000
(4) Fixed costs above 65,000 pads…..$280,000
OfficePlus sells its main product, ergonomic mouse pads and provides the following information:
(1) Selling price of each pad…..$12.00
(2) Variable cost per pat………..$ 5.20
(3) Fixed costs up to 65,000 pads……$205,000
(4) Fixed costs above 65,000 pads…..$280,000
Flexible BudgetFlexible BudgetFlexible BudgetFlexible Budget
Prepare a monthly flexible budget for the product, showing sales revenue, variable costs, fixed costs, and income for volume levels of 45,000, 55,000, and 75,000 pads.
Prepare a monthly flexible budget for the product, showing sales revenue, variable costs, fixed costs, and income for volume levels of 45,000, 55,000, and 75,000 pads.
Flexible BudgetFlexible BudgetFlexible BudgetFlexible Budget
Compute the Sales Revenue:Compute the Sales Revenue: 45,000 x $12 = $540,000 45,000 x $12 = $540,000
Compute the Sales Revenue:Compute the Sales Revenue: 45,000 x $12 = $540,000 45,000 x $12 = $540,000
Flexible BudgetFlexible BudgetFlexible BudgetFlexible Budget
Flexible BudgetFlexible BudgetFlexible BudgetFlexible Budget
Flexible BudgetFlexible BudgetFlexible BudgetFlexible Budget
Flexible BudgetFlexible BudgetFlexible BudgetFlexible Budget
First two volume levels have First two volume levels have the same fixed costs.the same fixed costs.
First two volume levels have First two volume levels have the same fixed costs.the same fixed costs.
Flexible BudgetFlexible BudgetFlexible BudgetFlexible Budget
Fixed costs increase at the Fixed costs increase at the 75,000 volume level.75,000 volume level.
Fixed costs increase at the Fixed costs increase at the 75,000 volume level.75,000 volume level.
Flexible BudgetFlexible BudgetFlexible BudgetFlexible Budget
End of ExerciseEnd of Exercise
Flexible BudgetFlexible BudgetFlexible BudgetFlexible Budget
In-Class Exercises:
Exercise No. Page E23-19 1452 Material & Labor Variances
In-Class Exercises:
Exercise No. Page E23-19 1452 Material & Labor Variances
Material & Labor VariancesMaterial & Labor VariancesMaterial & Labor VariancesMaterial & Labor Variances
Material & Labor VariancesMaterial & Labor VariancesMaterial & Labor VariancesMaterial & Labor Variances
Exercise E23-19:
Great Fender uses a standard cost accounting system and manufactures boat fenders. The following data is presented for 2014.
(1) Manufactured 20,000 boat fenders.
(2) Used 144,000 square feet of extruded vinyl, purchased at $1.05 per square foot.
(3) Production required 420 direct labor hours at $13.50 per hour.
(4) The direct materials standard was 7 sq. ft. of vinyl per fender, at a standard cost of $1.10 per sq. ft.
(5) The labor standard was 0.025 direct labor hour per fender, at a standard cost of $12.50 per hour.
Use this information to compute the cost and efficiency variances for direct materials and direct labor.
Exercise E23-19:
Great Fender uses a standard cost accounting system and manufactures boat fenders. The following data is presented for 2014.
(1) Manufactured 20,000 boat fenders.
(2) Used 144,000 square feet of extruded vinyl, purchased at $1.05 per square foot.
(3) Production required 420 direct labor hours at $13.50 per hour.
(4) The direct materials standard was 7 sq. ft. of vinyl per fender, at a standard cost of $1.10 per sq. ft.
(5) The labor standard was 0.025 direct labor hour per fender, at a standard cost of $12.50 per hour.
Use this information to compute the cost and efficiency variances for direct materials and direct labor.
Material & Labor VariancesMaterial & Labor VariancesMaterial & Labor VariancesMaterial & Labor Variances
Direct Material VariancesDirect Material VariancesDirect Material VariancesDirect Material Variances
Direct Material VariancesDirect Material VariancesDirect Material VariancesDirect Material Variances
Preliminary data/computations:
(1) Actual quantity…………144,000 sq ft (given)
(2) Standard quantity…….. 20,000units x 7 sq ft/unit = 140,000 sq ft
(3) Actual price…………….. $1.05/sq ft (given)
(4) Standard price…………. $1.10/sq ft (given)
Preliminary data/computations:
(1) Actual quantity…………144,000 sq ft (given)
(2) Standard quantity…….. 20,000units x 7 sq ft/unit = 140,000 sq ft
(3) Actual price…………….. $1.05/sq ft (given)
(4) Standard price…………. $1.10/sq ft (given)
Direct Material VariancesDirect Material VariancesDirect Material VariancesDirect Material Variances
Preliminary data/computations:
(1) Actual quantity…………144,000 sq ft (given)
(2) Standard quantity…….. 20,000units x 7 sq ft/unit = 140,000 sq ft
(3) Actual price…………….. $1.05/sq ft (given)
(4) Standard price…………. $1.10/sq ft (given)
Preliminary data/computations:
(1) Actual quantity…………144,000 sq ft (given)
(2) Standard quantity…….. 20,000units x 7 sq ft/unit = 140,000 sq ft
(3) Actual price…………….. $1.05/sq ft (given)
(4) Standard price…………. $1.10/sq ft (given)
This item requires a computation based on the This item requires a computation based on the data presented.data presented.(20,000 units produced requiring 7 sq ft each)(20,000 units produced requiring 7 sq ft each)
This item requires a computation based on the This item requires a computation based on the data presented.data presented.(20,000 units produced requiring 7 sq ft each)(20,000 units produced requiring 7 sq ft each)
Direct Material VariancesDirect Material VariancesDirect Material VariancesDirect Material Variances
Preliminary data/computations:
(1) Actual quantity…………144,000 sq ft (given)
(2) Standard quantity…….. 20,000units x 7 sq ft/unit = 140,000 sq ft
(3) Actual price…………….. $1.05/sq ft (given)
(4) Standard price…………. $1.10/sq ft (given)
Preliminary data/computations:
(1) Actual quantity…………144,000 sq ft (given)
(2) Standard quantity…….. 20,000units x 7 sq ft/unit = 140,000 sq ft
(3) Actual price…………….. $1.05/sq ft (given)
(4) Standard price…………. $1.10/sq ft (given)
Direct Material VariancesDirect Material VariancesDirect Material VariancesDirect Material Variances
Preliminary data/computations:
(1) Actual quantity…………144,000 sq ft (given)
(2) Standard quantity…….. 20,000units x 7 sq ft/unit = 140,000 sq ft
(3) Actual price…………….. $1.05/sq ft (given)
(4) Standard price…………. $1.10/sq ft (given)
Preliminary data/computations:
(1) Actual quantity…………144,000 sq ft (given)
(2) Standard quantity…….. 20,000units x 7 sq ft/unit = 140,000 sq ft
(3) Actual price…………….. $1.05/sq ft (given)
(4) Standard price…………. $1.10/sq ft (given)
General Model MethodGeneral Model MethodGeneral Model MethodGeneral Model Method
Direct Material VariancesDirect Material VariancesDirect Material VariancesDirect Material Variances
Direct Material VariancesDirect Material VariancesDirect Material VariancesDirect Material Variances
Formula MethodFormula MethodFormula MethodFormula Method
Direct Material VariancesDirect Material VariancesDirect Material VariancesDirect Material Variances
Direct Material VariancesDirect Material VariancesDirect Material VariancesDirect Material Variances
Material & Labor VariancesMaterial & Labor VariancesMaterial & Labor VariancesMaterial & Labor Variances
Direct Labor VariancesDirect Labor VariancesDirect Labor VariancesDirect Labor Variances
Material & Labor VariancesMaterial & Labor VariancesMaterial & Labor VariancesMaterial & Labor Variances
Exercise E23-19:
Great Fender uses a standard cost accounting system and manufactures boat fenders. The following data is presented for 2014.
(1) Manufactured 20,000 boat fenders.
(2) Used 144,000 square feet of extruded vinyl, purchased at $1.05 per square foot.
(3) Production required 420 direct labor hours at $13.50 per hour.
(4) The direct materials standard was 7 sq. ft. of vinyl per fender, at a standard cost of $1.10 per sq. ft.
(5) The labor standard was 0.025 direct labor hour per fender, at a standard cost of $12.50 per hour.
Use this information to compute the cost and efficiency variances for direct materials and direct labor.
Exercise E23-19:
Great Fender uses a standard cost accounting system and manufactures boat fenders. The following data is presented for 2014.
(1) Manufactured 20,000 boat fenders.
(2) Used 144,000 square feet of extruded vinyl, purchased at $1.05 per square foot.
(3) Production required 420 direct labor hours at $13.50 per hour.
(4) The direct materials standard was 7 sq. ft. of vinyl per fender, at a standard cost of $1.10 per sq. ft.
(5) The labor standard was 0.025 direct labor hour per fender, at a standard cost of $12.50 per hour.
Use this information to compute the cost and efficiency variances for direct materials and direct labor.
Direct Labor VariancesDirect Labor VariancesDirect Labor VariancesDirect Labor Variances
Preliminary data/computations:
(1) Actual quantity……… 420 hours (given)
(2) Standard quantity….. 20,000 units x .025 hours/unit = 500 hours
(3) Actual price…………. $13.50/hour (given)
(4) Standard price……… $12.50/hour (given)
Preliminary data/computations:
(1) Actual quantity……… 420 hours (given)
(2) Standard quantity….. 20,000 units x .025 hours/unit = 500 hours
(3) Actual price…………. $13.50/hour (given)
(4) Standard price……… $12.50/hour (given)
Direct Labor VariancesDirect Labor VariancesDirect Labor VariancesDirect Labor Variances
Preliminary data/computations:
(1) Actual quantity……… 420 hours (given)
(2) Standard quantity….. 20,000 units x .025 hours/unit = 500 hours
(3) Actual price…………. $13.50/hour (given)
(4) Standard price……… $12.50/hour (given)
Preliminary data/computations:
(1) Actual quantity……… 420 hours (given)
(2) Standard quantity….. 20,000 units x .025 hours/unit = 500 hours
(3) Actual price…………. $13.50/hour (given)
(4) Standard price……… $12.50/hour (given)
This item requires a computation based on the This item requires a computation based on the data presented.data presented.(20,000 units produced using .025 hours each)(20,000 units produced using .025 hours each)
This item requires a computation based on the This item requires a computation based on the data presented.data presented.(20,000 units produced using .025 hours each)(20,000 units produced using .025 hours each)
Direct Labor VariancesDirect Labor VariancesDirect Labor VariancesDirect Labor Variances
Preliminary data/computations:
(1) Actual quantity……… 420 hours (given)
(2) Standard quantity….. 20,000 units x .025 hours/unit = 500 hours
(3) Actual price…………. $13.50/hour (given)
(4) Standard price……… $12.50/hour (given)
Preliminary data/computations:
(1) Actual quantity……… 420 hours (given)
(2) Standard quantity….. 20,000 units x .025 hours/unit = 500 hours
(3) Actual price…………. $13.50/hour (given)
(4) Standard price……… $12.50/hour (given)
Direct Labor VariancesDirect Labor VariancesDirect Labor VariancesDirect Labor Variances
Preliminary data/computations:
(1) Actual quantity……… 420 hours (given)
(2) Standard quantity….. 20,000 units x .025 hours/unit = 500 hours
(3) Actual price…………. $13.50/hour (given)
(4) Standard price……… $12.50/hour (given)
Preliminary data/computations:
(1) Actual quantity……… 420 hours (given)
(2) Standard quantity….. 20,000 units x .025 hours/unit = 500 hours
(3) Actual price…………. $13.50/hour (given)
(4) Standard price……… $12.50/hour (given)
General Model MethodGeneral Model MethodGeneral Model MethodGeneral Model Method
Direct Labor VariancesDirect Labor VariancesDirect Labor VariancesDirect Labor Variances
Direct Labor VariancesDirect Labor VariancesDirect Labor VariancesDirect Labor Variances
Formula MethodFormula MethodFormula MethodFormula Method
Direct Labor VariancesDirect Labor VariancesDirect Labor VariancesDirect Labor Variances
Direct Labor VariancesDirect Labor VariancesDirect Labor VariancesDirect Labor Variances
End of ExerciseEnd of Exercise
Direct Labor VariancesDirect Labor VariancesDirect Labor VariancesDirect Labor Variances