1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Andreas93 [3]
3 years ago
14

MILLS ALLOCATES MANUFACTURING OVERHEAD TO PRODUCTION BASED ON STANDARD DIRECT LABOR HOURS. MILLS REPORTED THE FOLLOWING ACTUAL R

ESULTS FOR 2018:ACTUAL NUMBER OF UNITS PRODUCED: 1,000ACTUAL VARIABLE OVERHEAD: $4000ACTUAL FIXED OVERHEAD: $3,100ACTUAL DIRECT LABOR HOURS: 1,600Note: 1. VOH Coat Var. $1,600U(RE-POST EDIT) Info from E23-18 Murr, Inc. produced 1,000 units of the company's product in 2018, The standard quantity of direct materials was three yards of cloth per unit at a standard cost of $1.35 per yard. The accounting records showed that 2,500 yards of cloth were used and the company paid $1.40 per yard. Standard time was two direct labor hours per unit at a standard rate of$10.00 per direct labor hour. Employees worked 1,700 hours and were paid $9.50 per hourMills Inc. Is a competitor of murry, Inc. from exercise E23-18. Mills also uses a standard cost system and provides the following info.Static budget variable overhead $1,200Static budget fixed overhead $1,600Static budget direct labor hours 800 hoursStatic budget number of units 400 unitsStandard direct labor hours 2 hours per unitFigure out and analyze:1. Compute the variable overhead cost and efficiency variances and fixed overhead cost and volume variances.2. EXPLAIN (as best you can) why the variances are favorable or unfavorable. Based on cost and efficiency budget standards.
Business
1 answer:
tekilochka [14]3 years ago
5 0

Answer:

1. Compute the variable overhead cost and efficiency variances and fixed overhead cost and volume variances.

  • variable overhead cost variance = $1,000 unfavorable
  • variable efficiency variance = -$1,200 favorable
  • fixed overhead costs = $1,500 unfavorable
  • fixed overhead volume variance = -$100 favorable

2. EXPLAIN (as best you can) why the variances are favorable or unfavorable. Based on cost and efficiency budget standards.

  • variable overhead cost variance is unfavorable because actual variable overhead costs per unit are higher than budgeted.
  • variable efficiency variance is favorable because the company used less direct labor hours than budgeted to produce a higher amount of units (1,600 vs. 2,000).
  • fixed overhead costs are unfavorable because total fixed overhead costs were much higher than budgeted, but most of this variance can be explained by higher output.
  • fixed overhead volume variance are favorable because a higher volume was produced using less hours than budgeted.

Explanation:

Static budget variable overhead $1,200

Actual variable overhead $4,000

Static budget fixed overhead $1,600

Actual fixed overhead $3,100

Static budget direct labor hours 800 hours

Actual direct labor hours 1,600

Static budget number of units 400 units

Actual units produced 1,000

Standard direct labor hours 2 hours per unit

Actual direct labor hours 1.6 per unit

standard variable rate = $1,200 / 400 units = $3 per unit

actual variable rate = $4,000 / 1,000 units = $4 per unit

standard fixed rate = $1,600 / 800 hours = $2 per hour

actual fixed rate = $3,100 / 1,600 hours = $1.9375 per hour

variable overhead cost variance = actual costs - (standard rate x actual units) = $4,000 - ($3 x 1,000) = $1,000 unfavorable

variable efficiency variance = (actual hours x standard rate) - (standard hours x standard rate) = (1,600 × $3) − (2,000 x $3) = $4,800 - $6,000 = -$1,200 favorable

fixed overhead costs = actual overhead costs - budgeted overhead costs = $3,100 - $1,600 = $1,500 unfavorable

fixed overhead volume variance = (actual fixed rate x actual hours) - (standard rate x actual hours) = ($1.9375 x 1,600) - ($ x 1,600) = $3,100 - $3,200 = -$100 favorable

You might be interested in
As an it professional you may support databases, but not do any application coding, why do you think it is still important to un
Anarel [89]
It is important to understand that the styles describe different aspects of applications. For example, some architectural styles describe deployment patterns, some describe structure and design issues, and others describe communication factors. Therefore, a typical application will usually use a combination of more than one of the styles described in this chapter.
3 0
3 years ago
The cash account for Stone Systems at July 31, 20Y5, indicated a balance of $17,750. The bank statement indicated a balance of $
omeli [17]

Answer:

The bank reconciliation statement is as shown below:

                                                Amount in $

Balance per bank statement     33,650.00  

Deposit in transit                               9,150.00  

Outstanding check                    (17,865.00)

Bank charges                                   80.00  

Note collected                             (6,095.00)

Returned check                                (540.00)

Check drawn                             <u>   (630.00) </u>

Book balance                             <u> 17,750.00</u><u> </u>

Explanation:

Deposit in transit has been recorded in the books, thus the addition to the bank balance. Bank charges have been deducted from the bank balance but not in the cash book hence it is added back. Note collected is yet to be recognized in the books hence the deduction from the bank balance.

Amount recorded from the check returned is more than the actual by $540 hence the deduction. The check drawn has been over charged by the bank to the tune of $630 hence the deduction.

5 0
3 years ago
What is one of the most common mistakes salespeople make?
Damm [24]

Answer: Correct answer is D. Overselling

Explanation:

It’ll be annoying. People just want to hear about the product and what it does.

4 0
3 years ago
Read 2 more answers
A. drake wins $100,000 and peter wins $75,000.
emmasim [6.3K]
How about Drake just beats Peter by becoming a world-renown rapper and earning a net worth of +$60 million? 

But seriously, what's the question?
3 0
3 years ago
Education required for an animator
Mashcka [7]

Answer: A bachelor's degree in an art related field

Explanation: Like most art related careers, you need a strong art portfolio to getting an art related job.

6 0
2 years ago
Other questions:
  • Free points for all here u go
    14·2 answers
  • Suppose that a worker in agland can produce either 10 units of organic grain or 2 units of incense per year, and a worker in zen
    8·1 answer
  • The actual behavior of the person who occupies a status is termed Select one: a. role performance. b. master status. c. role set
    12·1 answer
  • If the price of labor or some other variable resource decreases, the:
    12·1 answer
  • A one-time gift to your college will provide $25,000 in scholarship funds next year with that amount increasing by 2 percent ann
    14·1 answer
  • ABC stock has just closed at $70.50. A customer has an open order on the Specialist's book (DMM's book) to sell short 100 shares
    13·1 answer
  • he following is from the 2021 annual report of Kaufman Chemicals, Inc.: Statements of Comprehensive Income Years Ended December
    6·1 answer
  • Dulce Company produces chocolate. Each pound of chocolate requires 400 cocoa beans (the unit quantity standard) and 0.15 labor h
    5·1 answer
  • 11
    9·1 answer
  • The act of giving up one thing of value to gain another thing of value is called a/an
    8·2 answers
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!