Cake Company manufactures different types of cakes for evening-parties. The usual order for a party includes...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
"Cake" Company manufactures different types of cakes for evening-parties. The usual order for a party includes a few cakes: chocolate, honey, layer or particular birthday cake. The company budgets sales and its costs, not excluding overheads. The costs of the accounting department, busy invoicing customers are budgeted proportionally to the number of orders. The following information relates to Cake's ordering activity during the last month: Budget Output Activity level 7 000 cakes 2 000 orders Total cost of accounting department invoicing 120 000 rubles activity Actual Output 7 500 cakes Activity level 2 400 orders Total cost of accounting department invoicing 139 200 rubles activity Required: (a) Calculate the overhead expenditure variance (b) Calculate the overhead efficiency variance (c) Explain the usefulness of this variance analysis "Cake" Company manufactures different types of cakes for evening-parties. The usual order for a party includes a few cakes: chocolate, honey, layer or particular birthday cake. The company budgets sales and its costs, not excluding overheads. The costs of the accounting department, busy invoicing customers are budgeted proportionally to the number of orders. The following information relates to Cake's ordering activity during the last month: Budget Output Activity level 7 000 cakes 2 000 orders Total cost of accounting department invoicing 120 000 rubles activity Actual Output 7 500 cakes Activity level 2 400 orders Total cost of accounting department invoicing 139 200 rubles activity Required: (a) Calculate the overhead expenditure variance (b) Calculate the overhead efficiency variance (c) Explain the usefulness of this variance analysis
Expert Answer:
Answer rating: 100% (QA)
To calculate the overhead expenditure variance and the overhead efficiency variance we can use the following formulas a Overhead Expenditure Variance Overhead Expenditure Variance measures the differe... View the full answer
Related Book For
Cornerstones of Cost Management
ISBN: 978-1285751788
3rd edition
Authors: Don R. Hansen, Maryanne M. Mowen
Posted Date:
Students also viewed these accounting questions
-
What strategic management analytical framework is most appropriate to use when assessing major external factors that affect profit potential of the premium chocolate industry?
-
Please analyse and compare the following 3 types of retailers used by Samsung in Canada from a marketing professional perspective: large chain shops such as Future Shop / Best Buy, large merchants...
-
Planning is one of the most important management functions in any business. A front office managers first step in planning should involve determine the departments goals. Planning also includes...
-
Heating oil futures contracts are traded on the New York Mercantile Exchange (NYM), a division of the CME Group. The standard contract size for heating oil futures is 43,600 gallons per contract. You...
-
A delivery company has a fleet of vans. The annual operating cost C (in dollars) per van is C = 0.37m + 2600, where m is the number of miles traveled by a van in a year. What number of miles yields...
-
The McCoy Family raises cattle on their farm in Virginia. They also have a large garden in which they grow ingredients for making two types of relishchow-chow and tomato. These they sell in 16-ounce...
-
On May 1, 1999 you were engaged by a committee of shareholders to perform a special audit as of December 31, 1998, of the shareholders' equity of the Major Corporation, whose stock is actively traded...
-
Kari Engle, D.D.S., opened a dental practice on January 1, 2014. During the fi rst month of operations, the following transactions occurred. 1. Performed services for patients who had dental plan...
-
The contribution margin ratio of Kuck Corporation's only product is 62%. The company's monthly fixed expense is $455,000 and the company's monthly target profit is $41,000. Required: Determine the...
-
The controller at Wesson Companys manufacturing plant has provided you with the following information for the first quarters operations: Required Determine each of the following unit costs: a....
-
2. Consider the time series process {v} given by vt = wt +0.5wt-1 Wt-2, where {w} is a sequence of independently and identically distributed random variables with mean equal to zero and variance...
-
The following exercises help you improve your knowledge of and power over English grammar, mechanics, and usage. Turn to the Handbook of Grammar, Mechanics, and Usage at the end of this book and...
-
If it is momentum, not velocity, that responds when a force is applied (according to Newtons second law), why is the momentum equation given by pDv/Dt -Vp and not D(pv)/Dt = -Vp. =
-
(a) Suppose that a sealed, insulated container consists of two compartments, and that one of them is filled with an ideal gas and the other is a vacuum. The partition separating the compartments is...
-
In realistic calculations of the vertical propagation of Rossby waves one must take into account the vertical variation of density. Carry through the calculation leading to the CharneyDrazin...
-
(a) Carry through the derivation of the quasi-geostrophic system starting with the anelastic equations and obtain (5.65). (b) Carry through the derivation of the quasi-geostrophic system in pressure...
-
If C is the centre of gravity of the lamina shown below, then y is Y T 180 mm K 100 mm 100 mm 200 mm (a) 105.85 mm (c) 109.45 mm 150 mm 200 mm y (b) 108.80 mm (d) 110.95 mm X
-
Synthesize the products by drawing out reagents and intermediates along the way. `N H. OH HO HO
-
Jolene Askew, manager of Feagan Company, has committed her company to a strategically sound cost reduction program. Emphasizing life-cycle cost management is a major part of this effort. Jolene is...
-
Deoro Company has identified the following overhead activities, costs, and activity drivers for the coming year: Deoro produces two models of dishwashers with the following expected prime costs and...
-
Heitger Company is a job-order costing firm that uses activity-based costing to apply overhead to jobs. Heitger identified three overhead activities and related drivers. Budgeted information for the...
-
Suppose the US investor in Question 8 were risk averse, instead of risk neutral, and wants a risk premium of \(1 \%\) (annual) for assuming the exchange-rate risk on the international investment. a....
-
Show from combination of the equation for current and the flux expression that the conductivity of an electrolyte solution is given by \[\kappa=\frac{F^{2}}{R_{\mathrm{G}} T} \sum_{i}^{N} D_{i}...
-
Verify by inputting the various constants that \(R_{\mathrm{G}} T / F\) is equal to \(k_{\mathrm{B}} T / e\).
Study smarter with the SolutionInn App