Theoretical capacity 262,500 units Practical capacity 210,000 units Normal capacity utilization 196,000 units Selling price $39 per
Fantastic news! We've Found the answer you've been seeking!
Question:
Theoretical capacity 262,500 units
Practical capacity 210,000 units
Normal capacity utilization 196,000 units
Selling price $39 per unit
Beginning inventory 20,000 units
Production 205,000 units
Sales volume 220,000 units
Variable budgeted manufacturing cost $8 per unit
Total budgeted fixed manufacturing costs $2,940,000
Total budgeted operating (non-manuf.) costs (all fixed) $230,000
Transcribed Image Text:
Cleary Corporation is a manufacturer of computer accessories. It uses absorption costing based on standard costs and reports the following data for 2014: EE (Click the icon to view the data.) There are no price, spending, or efficiency variances. Actual operating costs equal budgeted operating costs. The production-volume variance is written off to cost of goods sold. For each choice of denominator level, the budgeted production cost per unit is also the cost per unit of beginning inventory. Read the requirements. Requirement 1. What is the production-volume variance in 2014 when the denominator level is (a) theoretical capacity, (b) practical capacity, and (c) normal capacity utilization? Begin by determining the formula that is used to calculate the production-volume variance. (Abbreviations used: Bdgt = Budgeted, Mfg. - Manufacturing.) Production- >= volume variance Next calculate the production-volume variance for each denominator level (a) theoretical capacity, (b) practical capacity, and (c) normal capacity utilization. Label each variance as favorable (F) or unfavorable (U). Production- volume variance Capacity type (a) Theoretical (b) Practical (c) Normal Cleary Corporation is a manufacturer of computer accessories. It uses absorption costing based on standard costs and reports the following data for 2014: EE (Click the icon to view the data.) There are no price, spending, or efficiency variances. Actual operating costs equal budgeted operating costs. The production-volume variance is written off to cost of goods sold. For each choice of denominator level, the budgeted production cost per unit is also the cost per unit of beginning inventory. Read the requirements. Requirement 1. What is the production-volume variance in 2014 when the denominator level is (a) theoretical capacity, (b) practical capacity, and (c) normal capacity utilization? Begin by determining the formula that is used to calculate the production-volume variance. (Abbreviations used: Bdgt = Budgeted, Mfg. - Manufacturing.) Production- >= volume variance Next calculate the production-volume variance for each denominator level (a) theoretical capacity, (b) practical capacity, and (c) normal capacity utilization. Label each variance as favorable (F) or unfavorable (U). Production- volume variance Capacity type (a) Theoretical (b) Practical (c) Normal
Expert Answer:
Answer rating: 100% (QA)
During 2014 Donaldson had a drop of 15000 units in inventory levels The smaller the denominator level the larger is the budgeted fixed cost allocated ... View the full answer
Related Book For
Posted Date:
Students also viewed these accounting questions
-
Selling price = $15 per unit Variable costs - variable manufacturing costs = $5 per unit variable selling costs = $2 per unit Fixed costs - Fixed manufacturing costs = 4 per unit Fixed selling costs...
-
Selling price per unit $750 Variable cost per unit $450 Annual fixed cost $180,000 Net income after tax $360,000 Tax rate 25% 1)Reduce the selling price by $60. The sales team forecast that with a...
-
Jerry is a financial analyst at XYZ Industries. These are his projections for the upcoming year: Unit sales volume 1,151,000 Sale price per unit $103 Variable cost per unit $62 Fixed operating costs...
-
An assistant treasurer is currently reevaluating their firm's banking relationship. The firm's current lender charges an effective borrowing cost of 4.25 percent. A competing lender provides the...
-
If you were Paul Otellini, coming in as the new CEO, would you change anything? Why?
-
The efficiency of a refrigerating machine operating between two thermal reservoirs depends upon the (a) Nature of the working fluid only (b) Two reservoir temperatures only (c) Mass of the working...
-
Inland Equipment uses the allowance method to account for uncollectible accounts. On December 31,2010, Allowance for Uncollectible Accounts has a $600 credit balance. Journalize the year-end...
-
A new employee has been given responsibility for preparing the consolidated financial statements of Sample Company. After attempting to work alone for some time, the employee seeks assistance in...
-
Dividends Per Share Windborn Company has 10,000 shares of cumulative preferred 2% stock, $150 par and 50,000 shares of $25 par common stock. The following amounts were distributed as dividends: 20Y1...
-
1. Mr. Albert has a piece of property he has used in his business for 25 years. He is moving his business across the country and needs to get rid of the real estate he currently owns, as he won't be...
-
Discuss the best technique for promoting high motivation and productivity among employees in an organization (based on your expert opinion). For instance, you might want to discuss ways to promote...
-
Why would it be a good idea to do international business or start an business in Canada? with supporting details related to and backing the point.
-
Sharon Lee owns and operates Carla Vista, a bakery that creates personalized birthday cakes for a child's first birthday. The cakes, which sell for $55 and feature an edible picture of the child, are...
-
Given the following table, assess Mercy Hospital against the benchmarks for urban teaching hospitals, and so on. Explain Mercy Hospital's strengths and weaknesses in occupancy, payer mix, service...
-
Cognito Crafts creates captivating carved creations for competent customers that crave cinching challenges. Cognito Crafts specializes in hand - assembled wooden puzzles. Anya, the sole craftsperson,...
-
Answer all parts of the case (i.e. payback, PI, IRR and NPV). Comments and hints: a. Develop one spreadsheet model and formulas that will automatically adjust and recalculate all the cash flows...
-
What is infinite loading and how does it impact Capacity Requirements Planning (CRP) and MRP? How is Distribution Requirements Planning (DRP) used to enhance supply chains?
-
Represent each of the following combination of units in the correct SI form using an appropriate prefix: (a) m/ms, (b) k m, (c) k s /mg, and (d) k m N.
-
1,000 units were started and finished. Case 1: All prices and quantities are standard, except for the labor rate, which is $10.20 per hour. Case 2: All prices and quantities are standard, except for...
-
The sales department of C. Howland Manufacturing Co. has forecast sales in March to be 20,000 units. Additional information follows: Finished goods inventory, March 1 . . . . . . . . . . . . . . . ....
-
The factory payroll for the week is $500,000, consisting of $300,000 earned by 250 direct laborers and $200,000 earned by 150 indirect laborers. The total of factory bonuses to be received at year...
-
A car is modeled as shown in Fig. 6.23. Derive the equations of motion using Newton's second law of motion. Figure 6.23:- x(t) F(t) 21 31 Rigid bar, mass- 2m A G X3(1) F3(t) 5m x2(1) F(t) FIGURE 6.20...
-
Derive the equations of motion, using Newton's second law of motion, for each of the systems shown in Figs. 6.19. 8(t) 2k 2m k 4 M,(t) 000 3k Free Rigid bar, mass = 2m T x(1) F(t) m I X2(1) t F(1)...
-
The equations of motion derived using the displacements of the masses, \(x_{1}, x_{2}\), and \(x_{3}\) as degrees of freedom in Fig. 6.12 (Example 6.10) lead to symmetric mass and stiffness matrices...
Study smarter with the SolutionInn App