Dickson has budgeted to produce 10,000 units of its single product in a period. It operates...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Dickson has budgeted to produce 10,000 units of its single product in a period. It operates a standard costing system. The following information has been extracted from the product's standard cost card: Direct labour per unit 2% hours x £12.60 per hour Fixed production overheads 2% hours x £18.00 per hour The fixed production overheads are absorbed based on direct labour hours, The actual results for the period were as follows: Production 9,700 units Direct labour 26,160 hours Fixed production overheads £483,300 Required (a) Calculate the following variances for the period: (i) Fixed production overhead expenditure (2 marks) (ii) Fixed production overhead volume (2 marks) (iii) Fixed production overhead capacity (2 marks) (iv) Fixed production overhead efficiency (2 marks) (b) Provide a reconciliation of the fixed production overhead variances in (a). (2 marks) The following budgeted figures relate to a division of Dembele, for the coming year: (b) Provide a reconciliation of the fixed production overhead variances in (a). (2 marks) The following budgeted figures relate to a division of Dembele, for the coming year: £00 Sales (60,000 units x £20) 1,200 Costs: Variable (60,000 units x £8) 480 Fixed 420 Investment in the division £1,350,000 The company's cost of capital is 12% per annum. Required (c) For the coming year, calculate for the division: 3/8 (i) the return on capital employed (ROCE) (2 marks) (ii) the residual income (RI). (2 marks) The division has an opportunity to sell an additional 12,000 units per annum at a selling price of £18 per unit for the next four years. This would require an increase in investment of £300,000, which would be depreciated on a straight line basis over the four years with no residual value. Required (d) Calculate the revised ROCE and RI for the coming year if this opportunity is undertaken. (6 marks) Dickson has budgeted to produce 10,000 units of its single product in a period. It operates a standard costing system. The following information has been extracted from the product's standard cost card: Direct labour per unit 2% hours x £12.60 per hour Fixed production overheads 2% hours x £18.00 per hour The fixed production overheads are absorbed based on direct labour hours, The actual results for the period were as follows: Production 9,700 units Direct labour 26,160 hours Fixed production overheads £483,300 Required (a) Calculate the following variances for the period: (i) Fixed production overhead expenditure (2 marks) (ii) Fixed production overhead volume (2 marks) (iii) Fixed production overhead capacity (2 marks) (iv) Fixed production overhead efficiency (2 marks) (b) Provide a reconciliation of the fixed production overhead variances in (a). (2 marks) The following budgeted figures relate to a division of Dembele, for the coming year: (b) Provide a reconciliation of the fixed production overhead variances in (a). (2 marks) The following budgeted figures relate to a division of Dembele, for the coming year: £00 Sales (60,000 units x £20) 1,200 Costs: Variable (60,000 units x £8) 480 Fixed 420 Investment in the division £1,350,000 The company's cost of capital is 12% per annum. Required (c) For the coming year, calculate for the division: 3/8 (i) the return on capital employed (ROCE) (2 marks) (ii) the residual income (RI). (2 marks) The division has an opportunity to sell an additional 12,000 units per annum at a selling price of £18 per unit for the next four years. This would require an increase in investment of £300,000, which would be depreciated on a straight line basis over the four years with no residual value. Required (d) Calculate the revised ROCE and RI for the coming year if this opportunity is undertaken. (6 marks)
Expert Answer:
Answer rating: 100% (QA)
Answer to a Answer to a i Calculation of Fixed Production Overhead Expenditure Budgeted Fixed Overhead 450000 working note 1 Actual Fixed Overhead 483300 Budgeted Fixed Overhead Actual Fixed Overhead ... View the full answer
Related Book For
Intermediate Accounting
ISBN: 978-0324300987
10th Edition
Authors: Loren A Nikolai, D. Bazley and Jefferson P. Jones
Posted Date:
Students also viewed these general management questions
-
The following information has been extracted from the draft financial statements of TEX, a manufacturing entity: TEX - Income statement for the year ended 30 September 2003 September 2003...
-
The following information has been extracted from the accounting records of the Atwood Corporation: 1. Cash on hand (undeposited sales receipts) ............ $ 1,020 2. Certificates of deposit...
-
The following information has been extracted from Atwood Corporations accounting records: Cash on hand (undeposited sales receipts) ..............$1,535 Certificates of deposit...
-
For seven? years, France Corporation has been owned entirely by Steve and Maryssa? who are husband and wife? Steve and Maryssa have a $183,000 basis in their jointly owned France stock. The France...
-
Inventory transactions for Jack Franklin Stores are summarized in the table below. The company uses the LIFO perpetual method for both financial and tax reporting. The inventory footnote from Jack...
-
1. Solve the problem geometrically. 2. By looking at your graph from part 1, can you determine the shadow price of cheddar? Jason's House of Cheese offers two cheese assortments for holiday gift...
-
A firefly glows by the direct conversion of chemical energy to light. The light emitted by a firefly has peak intensity at a wavelength of \(550 \mathrm{~nm}\). a. What is the minimum chemical...
-
1. Based on the concept of customer value-based pricing, explain Spirit Airlines' success. 2. Does Spirit Airlines employ good-value pricing or value-added pricing? Explain. 3. Does Spirit's pricing...
-
Applying the high-low method, Bemidji Wilderness Resort estimates the total costs of providing guide services to be $9,800 per month, plus 30 percent of guide service revenue. a. What is the...
-
a. Create a spreadsheet model for this problem and solve it. What is the optimal solution? b. If Rick wanted to improve this solution, what additional resources would be needed and where would they...
-
es Gold Nest Company of Guandong, China, makes birdcages for the South China market. The company sells its birdcages through an extensive network of street vendors who receive commissions on their...
-
Why is it important to understand (and assess) internal controls?
-
What does the auditor do when they identify control exceptions?
-
Name a generally accepted framework used to describe internal controls.
-
Name the four different techniques for testing controls.
-
Why is it important to identify both the strengths and weaknesses in a system of internal controls?
-
changes is strategy to control the upward or downward adjustment of capacity. Goal System Production Price
-
Don Griffin worked as an accountant at a local accounting firm for five years after graduating from university. Recently, he opened his own accounting practice, which he operates as a corporation....
-
Why are compound interest concepts appropriate and applicable in accounting for a direct financing lease?
-
The retail inventory method indicated an inventory value of $80,000. A physical inventory indicated a value of $70,000. Suggest possible causes of this discrepancy.
-
The following factors are taken from the compound interest tables for the same number of time periods and/or cash flows for the same interest rate: a. 8.137249 b. 50.980352 c. 6.265060 d. 7.142168 e....
-
The Nielsen ratings are well known for their role in gauging television viewing. Identify another way that statistics are used in the entertainment industry. Briefly describe the role of statistics...
-
Choose a sport and describe at least three different statistics commonly tracked by participants in or spectators of the sport. In each case, briefly describe the importance of the statistic to the...
-
The government regularly publishes many different economic statistics, such as the unemployment rate, the inflation rate, and the surplus or deficit in the federal budget. Study recent newspapers and...
Study smarter with the SolutionInn App