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Aleonysh [2.5K]
3 years ago
9

Tiger Equipment Inc., a manufacturer of construction equipment, prepared the following factory overhead cost budget for the Weld

ing Department for May of the current year. The company expected to operate the department at 100% of normal capacity of 8,700 hours.
TIGER EQUIPMENT INC.
Factory Overhead Cost Budget—Welding Department
For the Month Ended May 31
1 Variable costs:
2 Indirect factory wages $40,020.00
3 Power and light 20,880.00
4 Indirect materials 17,400.00
5 Total variable cost $78,300.00
6 Fixed costs:
7 Supervisory salaries $19,800.00
8 Depreciation of plant and equipment 35,700.00
9 Insurance and property taxes 18,450.00
10 Total fixed cost 73,950.00
11 Total factory overhead cost $152,250.00
During May, the department operated at 9,080 standard hours, and the factory overhead costs incurred were indirect factory wages, $42,268; power and light, $22,064; indirect materials, $18,700; supervisory salaries, $19,800; depreciation of plant and equipment, $35,700; and insurance and property taxes, $18,450.
Prepare a factory overhead cost variance report for May. To be useful for cost control, the budgeted amounts should be based on 9,080 hours. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. Enter favorable variances as negative amounts.
Factory Overhead Cost Variance Report
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Prepare a factory overhead cost variance report for May. To be useful for cost control, the budgeted amounts should be based on 8,860 hours. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. Enter favorable variances as negative amounts.
Score: 106/174
TIGER EQUIPMENT INC.
Factory Overhead Cost Budget - Welding Department
For the Month Ended May 31
1 Productive capacity for the month 8,700 hours
2 Actual production for the month 9,080 hours
3
4 Budget (at Actual Production) Actual Variances: Favorable Variances: Unfavorable
5 Variable factory overhead costs:
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10 Fixed factory overhead costs:
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Business
1 answer:
Gwar [14]3 years ago
4 0

Answer:

TIGER EQUIPMENT INC.

Factory Overhead Cost Budget—Welding Department

For the Month Ended May 31                        Budgets    

1 Variable costs:                                       Static     Flexible    Actual  Variance

2 Indirect factory wages                      $40,020  $41,768   $42,268  $500 U

3 Power and light                                   20,880    21,792     22,064    272 U

4 Indirect materials                                 17,400     18,160      18,700    540 U

5 Total variable cost                           $78,300    $81,720  $83,032 $1,312 U

6 Fixed costs:

7 Supervisory salaries                         $19,800  $19,800    $19,800    None

8 Depreciation of plant & equipment  35,700    35,700      35,700    None

9 Insurance and property taxes           18,450     18,450       18,450    None

10 Total fixed cost                                73,950 $73,950    $73,950    None

11 Total factory overhead cost          $152,25 $155,670  $156,982 $1,312 U

Explanation:

TIGER EQUIPMENT INC.

Factory Overhead Cost Budget—Welding Department

For the Month Ended May 31

1 Variable costs:                                       Static     Flexible    Actual  Variance

2 Indirect factory wages                      $40,020  $41,768   $42,268  $500 U

3 Power and light                                   20,880    21,792     22,064    272 U

4 Indirect materials                                 17,400     18,160      18,700    540 U

5 Total variable cost                           $78,300    $81,720  $83,032 $1,312 U

6 Fixed costs:

7 Supervisory salaries                         $19,800  $19,800    $19,800    None

8 Depreciation of plant & equipment  35,700    35,700      35,700    None

9 Insurance and property taxes           18,450     18,450       18,450    None

10 Total fixed cost                                73,950 $73,950    $73,950    None

11 Total factory overhead cost          $152,25 $155,670  $156,982 $1,312 U

Flexing the budget:

Indirect factory wages $40,020.00/8,700 * 9,080 = $41,768  

Power and light              20,880.00/8,700 * 9,080 = $ 21,792

Indirect materials            17,400.00 /8,700 * 9,080 = $18,160

Total variable cost       $78,300.00/8,700 * 9,080 = $81,720

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Kenzi Kayaking, a manufacturer of kayaks, began operations this year. During this first year, the company produced 1,075 kayaks
Colt1911 [192]

Answer:

Net income under absorption costing is $240,000

Explanation:

Sales   (825*$1075)                            $886,875

less variable costs

Variable production cost($375*825)  (309,375)

selling and admin. expense                ($95,000)

Contribution margin                             $482,500

less fixed costs:

fixed production cost                          ($107,500)

selling and admin. expense                ($135,000)

Net income                                           $240,000  

Net income under absorption was $25,000 more than the net income under the absorption costing, the difference is analyzed below:

Fixed product costs (1075-825)*$100=$25,000

That is the fixed production costs added to closing inventory under absorption method which was expensed under variable costing method

     

4 0
3 years ago
Beedle issued a 10-year bond to Aeron Company on 1/1/20x6. The bonds have a 6% annual interest rate and pay interest semi-annual
Mama L [17]

1. The issue price of the bonds is<u> $215,589.16</u>.

2. An amortization schedule through 20x9 is as follows:

<h3>Amortization Schedule:</h3>

Period       PV             PMT   Interest Expense  Amortization        FV

1       $215,589.16     $6,000       $5,389.73            $610.27      $214,978.89

2      $214,978.89    $6,000      $5,374.47           $625.53      $214,353.36

Year 2

3     $214,353.36     $6,000      $5,358.83             $641.17        $213,712.20

4      $213,712.20     $6,000      $5,342.80           $657.20      $213,055.00

Year 3

5    $213,055.00     $6,000      $5,326.38            $673.62        $212,381.38

6     $212,381.38     $6,000      $5,309.53            $690.47        $211,690.91

Year 4

7      $211,690.91    $6,000      $5,292.27             $707.73        $210,983.18

8     $210,983.18    $6,000      $5,274.58            $725.42       $210,257.76

3. The journal entry recorded by Beedle on January 1, 20x6 is as follows:

Debit Cash $215,589.16

Credit Bonds Payable $200,000

Credit Bond Premium $15,589.16

  • To record the issuance of $200,000 at 6% interest, semi-annually.

4. The amount in the accounts at the end of 20x6 are:

A. Bond payable $200,000

B. Premium $14,353.36 ($15,589.16 - $610.27 = $625.53)

C. Fair value adjustment on Bond payable = $1,235.80 ($610.27 = $625.53)

D. Interest expense = $10,764.20

5. The journal entry to record the bond retirement transaction on 12/31/20X8 is as follows:

Debit Bonds Payable $200,000

Debit Bonds Premium $12,000

Credit Cash $212,000

  • To record the bond retirement.

<h3>Data and Calculations:</h3>

Maturity period = 10 years

Interest rate = 6% semi-annually

Interest payment dates = June 30 and December 31

Market rate = 5%

Face value = $200,000

Semi-annual coupon payment = $6,000 ($200,000 x 3%)

Fair value of the bonds at December 31:

12/31/20X6 $ 213,200

12/31/20X7 $ 213,300

12/31/20x8 $ 212,000

<h3>Issue Price Calculations:</h3>

N (# of periods) = 20 (10 years x 2)

I/Y (Interest per year) = 5%

PMT (Periodic Payment) = $6,000 ($200,000 x 6% x 1/2)

FV (Future Value) = $200,000

Results:

PV = $215,589.16

Sum of all periodic payments = $120,000 ($6,000 x 20)

Total Interest $104,410.84

Learn more about recording bond transactions at brainly.com/question/15877561

#SPJ1

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3 years ago
On average, 35% of the sales on account are collected in the month of sale, 40% are collected in the month following sale, 10% a
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Answer:

35% of sales(say $2,000,000) in April

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Explanation:

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