Ftetafte Ite manufactures small packaging boxes with the following standard unit costs costs are as follows:...
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Ftetafte Ite manufactures small packaging boxes with the following standard unit costs costs are as follows: Two cartons at $0.60 each $1.20 Direct labor (0.3 hours $20) $6.00 Variable manufacturing overhead (0.3 hours x $4) $1.20 Fixed manufacturing overhead (at 40,000-hour level) $2.00 Total unit cost $10.40 In the last financial year, Ftetafte managed to sell 140,000 of these little packaging boxes. Here are the costs incurred: Cardboard (287,000 units) $175,070 Direct labor (43,400 hours) $834,582 Variable manufacturing overhead $178,800 Fixed manufacturing overheads $90,000 Total cost $1,278,452 The following questions a) What is the price differential on the board used and indicate whether it is favourable or unfavourable. b) What is the quantity variance on the unfavourable. c) Determine the over- or under-allocati (show all your calculations): on used and indicate whether it is favourable or manufacturing overheads (show all your calculations). - for variable manufacturing overhe - for fixed manufacturing overheads. d) Calculate the volume variance and the yield variance for manufacturing overheads. and indicate whether they are favorable or unfavorable variances. e) The production manager is particularly satisfied with the performance of his production employees. Ftetafte Ite manufactures small packaging boxes with the following standard unit costs costs are as follows: Two cartons at $0.60 each $1.20 Direct labor (0.3 hours $20) $6.00 Variable manufacturing overhead (0.3 hours x $4) $1.20 Fixed manufacturing overhead (at 40,000-hour level) $2.00 Total unit cost $10.40 In the last financial year, Ftetafte managed to sell 140,000 of these little packaging boxes. Here are the costs incurred: Cardboard (287,000 units) $175,070 Direct labor (43,400 hours) $834,582 Variable manufacturing overhead $178,800 Fixed manufacturing overheads $90,000 Total cost $1,278,452 The following questions a) What is the price differential on the board used and indicate whether it is favourable or unfavourable. b) What is the quantity variance on the unfavourable. c) Determine the over- or under-allocati (show all your calculations): on used and indicate whether it is favourable or manufacturing overheads (show all your calculations). - for variable manufacturing overhe - for fixed manufacturing overheads. d) Calculate the volume variance and the yield variance for manufacturing overheads. and indicate whether they are favorable or unfavorable variances. e) The production manager is particularly satisfied with the performance of his production employees.
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To answer the questions lets calculate each variance step by step a Price Differential on Cardboard Total cost of cardboard 175070 Actual units of car... View the full answer
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Management Accounting Information for Decision-Making and Strategy Execution
ISBN: 978-0137024971
6th Edition
Authors: Anthony A. Atkinson, Robert S. Kaplan, Ella Mae Matsumura, S. Mark Young
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