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business
managerial accounting 12th

Managerial Accounting The Cornerstone Of Business Decision Making 9th Edition Maryanne Mowen, Don Hansen, Dan Heitger - Solutions

Willhelm Manufacturing has the following standards for one of its products:Direct materials (2 ft. @ $5) $10 Direct labor (0.5 hr. @ $10) 5 During the most recent year, the following actual results were recorded:Production 6,000 units Direct materials (11,750 ft. purchased and used) $61,100 Direct
How to calculate fixed overhead variances: columnar and formula approaches?
How to calculate the total fixed overhead variance?
How to prepare a performance report for the variable overhead variances?
How to calculate variable overhead spending and efficiency variances: columnar and formula approaches?
How to calculate the total variable overhead variance?
How to calculate labor variances: formula and columnar approaches?
How to calculate the total variance for labor?
How to calculate materials variances: formula and columnar approaches?
How to calculate the total variance for materials?
How to use control limits to trigger a variance investigation?
How to compute standard quantities allowed (SQ and SH)?
If a company bought 100 pounds of material for $5 per pound and the standard price is $4.00 per pound, what amount would be debited to the materials inventory account?
How are the materials and labor variances treated at the end of the year if they are not material?
How does the variable overhead spending variance differ from the materials and labor price variances?
Why are the labor efficiency and variable overhead efficiency variances similar in nature?
Assume that SFOR = $10 and SHp = 5,000 hours. What is the budgeted FOH?
Calculate the fixed overhead spending and volume variances.Actual fixed overhead (AH) $160,000 Standard fixed overhead rate (SFOR) $15.00 per direct labor hour Budgeted fixed overhead (BFOH) $157,500 Actual production (packages) 500,000 units Hours allowed for production (SH) 10,000 hours**0.02 ×
Standard fixed overhead rate (SFOR) $15.00 per direct labor hour Actual FOH $160,000 Standard hours allowed per unit 0.02 hour Actual production (packages) 500,000 units Required:Calculate the (1) standard hours for actual units produced (SH), (2) total applied FOH, and(3) total FOH variance.
Crunchy Chips had the following data for the first quarter (ending March 31):Standard variable overhead rate (SVOR) $4.00 per direct labor hour Actual costs:Maintenance $26,875 Power $11,875 Actual hours worked (AH) 10,500 hours Actual production (packages) 500,000 units Hours allowed for
Assume that Crunchy Chips had the following data:Standard variable overhead rate (SVOR) $4.00 per direct labor hour Actual variable overhead costs (AH) $38,750 Actual hours worked (AH) 10,500 hours Actual production (packages) 500,000 units Hours allowed for production (SH) 10,000 hours**0.02 ×
Assume that Crunchy Chips had the following data for the first quarter (ending March 31):Standard variable overhead rate (SVOR) $4.00 per direct labor hour Actual variable overhead costs (AH) $38,750 Standard hours allowed per unit 0.02 hour Actual direct labor hours worked (AH) 10,500 hours Actual
When is the total materials variance the sum of the price variance and the usage variance?
If the actual price of cooking oil is $0.035 per ounce and the standard price is$0.03 per ounce, what is the materials price variance if 10,000 ounces of oil are purchased?
If the standard labor rate is 2 hours per unit and the standard rate is $15 per hour, what is the labor efficiency variance if 18,000 actual hours are used to produce 10,000 units of product?
Refer to the unit standards from Exhibit 10.3 (p. 578). The actual results for the first week in March are:Actual production 48,500 bags of corn chips Actual cost of corn 780,000 ounces @ $0.015 Required:Calculate the materials price and usage variances by using the 3-pronged (columnar) and formula
Refer to the unit standards from Exhibit 10.3 (p. 578). The actual results for the first week in March are:Actual production 48,500 bags of corn chips Actual cost of corn 780,000 ounces at $0.015 = $11,700 Actual cost of inspection labor 360 hours at $8.35 = $3,006 Required:Calculate the total
Suppose that the actual labor rate paid is $16 per hour, while the standard labor rate is $15.50. Will the labor rate variance be favorable or unfavorable?
Standard cost: $100,000; allowable deviation: ± $10,000. Actual costs for 6 months are:June $ 97,500 July 105,000 August 95,000 September $102,500 October 107,500 November 112,500 Required:Plot the actual costs over time against the upper and lower control limits. Determine when a variance should
Assume that 5,000 packages of corn chips are produced on the first day of April. How much cooking oil and how many inspection hours should be used for the actual output of 5,000 packages?
Why would a firm adopt a standard costing system?
What is the difference between an ideal standard and a currently attainable standard?
!!~!!~!!~!!!! Assume that 100,000 packages of corn chips are produced during the first week of March.Recall from Exhibit 10.3 that the unit quantity standard is 18 ounces of yellow corn per package, and the unit quantity standard for machine operators is 0.01 hour per package produced.Required:How
Linda Ellis, division manager, is evaluated and rewarded on the basis of budgetary performance.Linda, her assistants, and the plant managers are all eligible to receive a bonus if actual divisional profits are between budgeted profits and 120% of budgeted profits. The bonuses are based on a fixed
Dr. Roger Jones is a successful dentist but is experiencing recurring financial difficulties. For example, Dr. Jones owns his office building, which he leased to the professional corporation that housed his dental practice. (He owns all shares in the corporation.) After the corporation’s failure
Similar to companies, the U.S. government must prepare a budget each year. However, unlike private, for-profit companies, the budget and its details are available to the public. The entire budgetary process is established by law. The government makes available a considerable amount of information
Jordana Krull owns The Eatery in Miami, Florida. The Eatery is an affordable restaurant located near tourist attractions. Jordana accepts cash and checks. Checks are deposited immediately.The bank charges $0.50 per check; the amount per check averages $65. Bad checks that Jordana cannot collect
Willison Company produces stuffed toy animals; one of these is Betty Rabbit. Each rabbit takes 0.2 yards of fabric and 6 ounces of polyfiberfill. Fabric costs $3.50 per yard, and polyfiberfill is $0.05 per ounce. Willison has budgeted production of stuffed rabbits for the next 4 months as
Optima Company is a high-technology organization that produces a mass-storage system. The design of Optima’s system is unique and represents a breakthrough in the industry. The units Optima produces combine positive features of both compact and hard disks. The company is completing its fifth year
The controller of Feinberg Company is gathering data to prepare the cash budget for July.He plans to develop the budget from the following information:a. Of all sales, 40% are cash sales.b. Of credit sales, 45% are collected within the month of sale. Half of the credit sales collected within the
Problem 9-71 Participative Budgeting, Not-for-Profit Setting Dwight D. Eisenhower was the 34th president of the United States and the Supreme Commander of the Allied Forces during World War II. Much of his army career was spent in planning. He once said that “planning is everything; the plan is
Ryan Richards, controller for Grange Retailers, has assembled the following data to assist in the preparation of a cash budget for the third quarter of the year:a. Sales:May (actual) $100,000 June (actual) 120,000 July (estimated) 90,000 August (estimated) 100,000 September (estimated) 135,000
Refer to the information for Healthy Pet Company. Assume that Healthy Pet actually produced 100,000 bags of BasicDiet and 90,000 bags of SpecialDiet. The actual overhead costs incurred were as follows:Ladan Suriman, controller for Healthy Pet Company, has been instructed to develop a flexible
Refer to the information for Healthy Pet Company.Ladan Suriman, controller for Healthy Pet Company, has been instructed to develop a flexible budget for overhead costs. The company produces two types of dog food. BasicDiet is a standard mixture for healthy dogs. SpecialDiet is a reduced protein
Refer to the information for Healthy Pet Company.Ladan Suriman, controller for Healthy Pet Company, has been instructed to develop a flexible budget for overhead costs. The company produces two types of dog food. BasicDiet is a standard mixture for healthy dogs. SpecialDiet is a reduced protein
Allison Manufacturing produces a subassembly used in the production of jet aircraft engines.The assembly is sold to engine manufacturers and aircraft maintenance facilities. Projected sales in units for the coming 5 months follow:January 40,000 February 50,000 March 60,000 April 60,000 May 62,000
Aragon and Associates has found from past experience that 25% of its services are for cash. The remaining 75% are on credit. An aging schedule for accounts receivable reveals the following pattern:a. Ten percent of fees on credit are collected in the month that service is rendered.b. Sixty percent
Exercise 9-63 Flexible Budget for Various Levels of Activity Refer to the information for Cerium Inc..Cerium Inc. produces a variety of household cleaning products. Cerium’s controller has developed standard costs for the following four overhead items:Next year, Cerium expects production to
Budgeted amounts for the year:Materials 2 leather strips @ $7.00 Labor 1.5 hr. @ $18.00 VOH 1.5 hr. @ $1.20 FOH $6,800 Required:1. Prepare a flexible budget for 3,500, 4,000, and 4,500 units.2. Conceptual Connection Calculate the unit cost at 3,500, 4,000, and 4,500 units. (Note:Round unit costs to
The owner of a plumbing supply company has requested a cash budget for June. After examining the records of the company, you find the following:a. Cash balance on June 1 is $1,800.b. Actual sales for April and May are as follows:c. Credit sales are collected over a 3-month period: 30% in the month
Fein Company provided the following information relating to cash payments:a. Fein purchased direct materials on account in the following amounts:June $68,000 July 77,000 August 73,000b. Fein pays 20% of accounts payable in the month of purchase and the remaining 80% in the following month.c. In
Erewon Inc. sells all of its product on account. Erewon has the following accounts receivable collection experience:Percent collected in the month of sale 30 Percent collected in the month after the sale 50 Percent collected in the second month after the sale 18 To encourage payment in the month of
Selig Inc. found that about 20% of its sales during the month were for cash. The company has the following accounts receivable collection experience:Percent collected in the month of sale 20 Percent collected in the month after the sale 68 Percent collected in the second month after the sale 7
Jani Subramanian, owner of Jani’s Flowers and Gifts, produces gift baskets for various special occasions.Each gift basket includes fruit or assorted small gifts (e.g., a coffee mug, deck of cards, novelty cocoa mixes, scented soap) in a basket that is wrapped in colorful cellophane. Jani has
Alger Inc. manufactures six models of leaf blowers and weed eaters. Alger’s budgeting team is finalizing the sales budget for the coming year. Sales in units and dollars for last year follow:In looking over the previous year’s sales figures, Alger’s sales budgeting team recalled the
Duran Company produces asphalt roofing materials. The production budget in bundles for Duran’s most popular weight of asphalt shingle is shown for the following months:Units March 9,000 April 13,000 May 14,400 June 17,000 Each bundle produced requires (on average) 0.30 direct labor hour. The
Wehner Company produces plastic items, including plastic housings for humidifiers. Each housing requires about 15 ounces of plastic costing $0.10 per ounce. Wehner molds the plastic into the proper shape. The company has budgeted production of the housings for the next 4 months as follows:Units
Liang Company produces wheelbarrows. The unit sales for selected months of the year are as follows:Unit Sales April 90,000 May 110,000 June 100,000 July 120,000 Company policy requires that ending inventories for each month be 20% of next month’s sales.However, at the beginning of April, due to
Exercise 9-52 Production Budget and Direct Materials Purchases Budgets Pets Plus, Inc. produces otic fluid for dogs. The otic fluid is sold in 12-ounce plastic bottles. The sales budget for the first 4 months of the year is as follows:Unit Sales January 8,000 February 9,500 March 12,000 April
Exercise 9-51 Production Budget Refer to the information regarding Stillwater Designs on the previous page. Stillwater Designs needs a production budget for each product (representing the amount that must be outsourced to outside manufacturers). Beginning inventory of S12L7 for the first quarter of
Exercise 9-50 Sales Budget Refer to the information regarding Stillwater Designs above.Required:1. Prepare a sales budget for each quarter of 20X1 and for the year in total. Show sales by product and in total for each time period.2. Conceptual Connection How will Stillwater Designs use this sales
Exercise 9-50 Sales Budget Refer to the information regarding Stillwater Designs.Assume that Stillwater Designs produces two automotive subwoofers: S12L7 and S12L5.The S12L7 sells for $475, and the S12L5 sells for $300. Projected sales (number of speakers)for the coming five quarters are as
a. Dr. Jones, a dentist, wants to increase the size and profitability of his business by building a reputation for quality and timely service.b. To achieve this, he plans on adding a dental laboratory to his building so that crowns, bridges, and dentures can be made in-house.c. To add the
Balboa Company budgeted production of 4,500 units with the following amounts:Variable costs of production:Direct materials 3 pounds @ $1.30 per pound Direct labor 0.5 hr. @ $18.00 per hour VOH 0.5 hr. @ $3.40 FOH:Materials handling $6,200 Depreciation $2,600 At the end of the year, Balboa had the
Balboa Company budgeted the following amounts:Variable costs of production:Direct materials 3 pounds @ $1.30 per pound Direct labor 0.5 hr. @ $18.00 per hour VOH 0.5 hr. @ $3.40 FOH:Materials handling $8,600 Depreciation $4,350 Required:Prepare a flexible budget for 4,000 units, 4,500 units, and
Oliver’s Bistro provided the following information for the month of October:a. Sales are budgeted to be $395,000. About 80% of sales is cash; the remainder is on account.b. Oliver’s Bistro expects that, on average, 70% of credit sales will be paid in the month of sale, and 28% will be paid in
Brief Exercise 9-45 Preparing an Accounts Payable Schedule Ollie Inc. purchases raw materials on account for use in production. The direct materials purchases budget shows the following expected purchases on account:April $320,400 May 366,000 June 350,000 Ollie typically pays 15% on account in the
Brief Exercise 9-44 Preparing a Schedule of Cash Collections on Accounts Receivable Tsosie Company is a medical billing services firm. All sales of billing services are billed to the client (there are no cash sales). Tsosie expects that, on average, 15% will be paid in the month of billing, 40%
Brief Exercise 9-43 Preparing a Budgeted Income Statement Jameson Company provided the following information for the coming year:Units produced and sold 230,000 Cost of goods sold per unit $5.30 Selling price $9.70 Variable selling and administrative expenses per unit $1.60 Fixed selling and
Brief Exercise 9-42 Preparing a Selling and Administrative Expenses Budget Elwood Company makes and sells plastic trash bags. In the coming year, Elwood expects total sales of $18,620,000. There is a 4% commission on sales. In addition, fixed expenses of the sales and administrative offices include
Lazlo Company manufactures a line of table lamps. Each lamp takes $5.00 of direct materials and uses 0.9 direct labor hour at $18.00 per direct labor hour. The variable overhead rate is $1.00 per direct labor hour and the fixed overhead rate is $2.00 per direct labor hour. Lazlo expects to produce
Lazlo Company manufactures a line of table lamps. Each lamp takes $5 of direct materials and uses 0.9 direct labor hour at $18 per direct labor hour. The variable overhead rate is$1.00 per direct labor hour, and the fixed overhead rate is $2.00 per direct labor hour. Lazlo expects to have 830 lamps
Tulum Inc. makes a Mexican chocolate mix. Budgeted direct labor hours for the first 3 months of the coming year are:January 9,880 February 8,800 March 12,080 The variable overhead rate is $0.50 per direct labor hour. Fixed overhead is budgeted at $3,140 per month.Required:Prepare an overhead budget
Tulum Inc. makes a Mexican chocolate mix. Planned production in units for the first 3 months of the coming year is:January 24,700 February 22,000 March 30,200 Each box of chocolate mix takes 0.4 direct labor hour. The average wage is $17 per hour.Required:Prepare a direct labor budget for the
Tulum Inc. makes a Mexican chocolate mix sold in 4-pound boxes. Planned production in units for the first 3 months of the coming year is:January 24,700 February 22,000 March 30,200 Each box requires 4.2 pounds of chocolate mix and one box. Company policy requires that ending inventories of raw
Tulum Inc. makes a Mexican chocolate mix. In the first 4 months of the coming year, Tulum expects the following unit sales:January 22,000 February 20,000 March 30,000 April 31,000 Tulum’s policy is to have 20% of next month’s sales in ending inventory. On January 1, it is expected that there
Tulum Inc. sells powdered Mexican chocolate to restaurants. Its basic unit is a 4-pound box of the spiced chocolate mixture. Tulum expects the following units to be sold in the first 3 months of the coming year:January 22,000 February 20,000 March 30,000 The average price for a box is
Bowling Company budgeted the following amounts:Variable costs of production:Direct materials 3 pounds @ $0.60 per pound Direct labor 0.5 hr. @ $16.00 per hour VOH 0.5 hr. @ $2.20 FOH:Materials handling $6,200 Depreciation $2,600 At the end of the year, Bowling had the following actual costs for
Bowling Company budgeted the following amounts:Variable costs of production:Direct materials 3 pounds @ $0.60 per pound Direct labor 0.5 hr. @ $16.00 per hour VOH 0.5 hr. @ $2.20 per direct labor hour FOH:Materials handling $6,200 Depreciation $2,600 Required:Prepare a flexible budget for 2,500
La Famiglia Pizzeria provided the following information for the month of October:a. Sales are budgeted to be $157,000. About 85% of sales is cash; the remainder is on account.b. La Famiglia expects that, on average, 70% of credit sales will be paid in the month of sale, and 28% will be paid in the
Wight Inc. purchases raw materials on account for use in production. The direct materials purchases budget shows the following expected purchases on account:April $374,400 May 411,200 June 416,000 Wight typically pays 20% on account in the month of billing and 80% the next month.Required:1. How
Kailua and Company is a legal services firm. All sales of legal services are billed to the client(there are no cash sales). Kailua expects that, on average, 20% will be paid in the month of billing, 50% will be paid in the month following billing, and 25% will be paid in the second month following
Oliver Company provided the following information for the coming year:Units produced and sold 160,000 Cost of goods sold per unit $6.30 Selling price $10.80 Variable selling and administrative expenses per unit $1.10 Fixed selling and administrative expenses $423,000 Tax rate 35%Required:Prepare a
Fazel Company makes and sells paper products. In the coming year, Fazel expects total sales of$19,730,000. There is a 3% commission on sales. In addition, fixed expenses of the sales and administrative offices include the following:Salaries $ 960,000 Utilities 365,000 Office space 230,000
Andrews Company manufactures a line of office chairs. Each chair takes $14 of direct materials and uses 1.9 direct labor hours at $16 per direct labor hour. The variable overhead rate is $1.20 per direct labor hour, and the fixed overhead rate is $1.60 per direct labor hour. Andrews expects to
Andrews Company manufactures a line of office chairs. Each chair takes $14 of direct materials and uses 1.9 direct labor hours at $16 per direct labor hour. The variable overhead rate is $1.20 per direct labor hour, and the fixed overhead rate is $1.60 per direct labor hour. Andrews expects to have
Patrick Inc. makes industrial solvents. Budgeted direct labor hours for the first 3 months of the coming year are:January 13,140 February 12,300 March 15,075 The variable overhead rate is $0.70 per direct labor hour. Fixed overhead is budgeted at $2,750 per month.Required:Prepare an overhead budget
Brief Exercise 9-24 Preparing a Direct Labor Budget Patrick Inc. makes industrial solvents. Planned production in units for the first 3 months of the coming year is:January 43,800 February 41,000 March 50,250 Each drum of industrial solvent takes 0.3 direct labor hour. The average wage is $18 per
Brief Exercise 9-23 Preparing a Direct Materials Purchases Budget Patrick Inc. makes industrial solvents sold in 5-gallon drums. Planned production in units for the first 3 months of the coming year is:January 43,800 February 41,000 March 50,250 Each drum requires 5.5 gallons of chemicals and one
Patrick Inc. makes industrial solvents. In the first 4 months of the coming year, Patrick expects the following unit sales:January 41,000 February 38,000 March 50,000 April 51,000 Patrick’s policy is to have 25% of next month’s sales in ending inventory. On January 1, it is expected that there
Patrick Inc. sells industrial solvents in 5-gallon drums. Patrick expects the following units to be sold in the first 3 months of the coming year:January 41,000 February 38,000 March 50,000 The average price for a drum is $35.Required:Prepare a sales budget for the first 3 months of the coming
9-20 A firm comparing the actual variable costs of producing 10,000 units with the total variable costs of a static budget based on 9,000 units would probably noticea. no variances.b. small favorable variances.c. large unfavorable variances.d. large favorable variances.e. small unfavorable
9-19 To help assess performance, managers should use aa. static budget.b. master budget.c. continuous budget.d. before-the-fact flexible budget.e. None of these.
9-18 To create a meaningful performance report, actual costs and expected costs should be compareda. at the actual level of activity.b. weekly.c. at the budgeted level of activity.d. at the average level of activity.e. hourly.
9-17 For performance reporting, it is best to compare actual costs with budgeted costs usinga. short-term budgets.b. static budgets.c. flexible budgets.d. master budgets.e. None of these.
9-16 Which of the following items is a possible example of myopic behavior?a. Failure to promote deserving employeesb. Reducing expenditures on preventive maintenancec. Cutting back on new product developmentd. Buying cheaper, lower-quality materials so that the company does not exceed the
9-15 Suppose that a factory increases training costs in order to reduce the waste of materials in production. That training cost is included in thea. sustainability budget.b. the variable selling expense budget.c. the direct materials purchases budget.d. the fixed factory overhead budget.e. the
9-14 The percentage of accounts receivable that is uncollectible can be ignored for cash budgeting becausea. no cash is received from an account that defaults.b. it is included in cash sales.c. it appears on the budgeted income statement.d. for most companies, it is not a material amount.e. None of
9-13 A company has the following collection pattern: month of sale, 40%; month following sale, 60%.If credit sales for January and February are $100,000 and $200,000, respectively, the cash collections for February area. $140,000.b. $300,000.c. $120,000.d. $160,000.e. $80,000.
9-12 When a company amasses data during the preparation of the master budget, it is primarily doing so for which of the following purposes?a. Descriptiveb. Predictivec. Prescriptived. Diagnostic

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