Kenzi Cycles has been a manufacturer of cycles for many years. It has traditionally focused on...
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Kenzi Cycles has been a manufacturer of cycles for many years. It has traditionally focused on the lower end of the market appealing to casual and leisure cyclists. Kenzi sells its bikes through large department stores. With an increasingly competitive market, Kenzi management has been trying to manage costs but maintain the same bike features it has always provided. Commencing 2021. management decided to buy slightly higher quality components and materials and pay slightly higher wages to maintain their existing staff. Kenzi has used a standard costing system for the last five years. The current standard cost for one bicycle based on production of 10,000 units is as follows: Materials 10kg per unit Direct labor 4 hours at $10 Variable overhead based on direct labor hours Fixed overhead based on direct labor hours STANDARD COST PER BICYCLE Actual data for the current year reveals the following: 1. 11. III. IV. v. Actual variable overhead totaled $189 000 Actual fixed overhead totaled $86 000 $60 40 Due to a slowing of demand, 9 500 bikes were produced and sold $585 000 of direct materials was purchased and used representing 90 000 kgs of materials Direct labor was $367 500 for 35 000 direct labor hours 20 8 $128 $14 000U and $6 000U $15 000U and $6 000F $15 000F and $4 000U $14 000F and $4 000F None of the available options Select the option that best represents the variable overhead price/spending variance and fixed overhead budget variance: Kenzi Cycles has been a manufacturer of cycles for many years. It has traditionally focused on the lower end of the market appealing to casual and leisure cyclists. Kenzi sells its bikes through large department stores. With an increasingly competitive market, Kenzi management has been trying to manage costs but maintain the same bike features it has always provided. Commencing 2021. management decided to buy slightly higher quality components and materials and pay slightly higher wages to maintain their existing staff. Kenzi has used a standard costing system for the last five years. The current standard cost for one bicycle based on production of 10,000 units is as follows: Materials 10kg per unit Direct labor 4 hours at $10 Variable overhead based on direct labor hours Fixed overhead based on direct labor hours STANDARD COST PER BICYCLE Actual data for the current year reveals the following: 1. 11. III. IV. v. Actual variable overhead totaled $189 000 Actual fixed overhead totaled $86 000 $60 40 Due to a slowing of demand, 9 500 bikes were produced and sold $585 000 of direct materials was purchased and used representing 90 000 kgs of materials Direct labor was $367 500 for 35 000 direct labor hours 20 8 $128 $14 000U and $6 000U $15 000U and $6 000F $15 000F and $4 000U $14 000F and $4 000F None of the available options Select the option that best represents the variable overhead price/spending variance and fixed overhead budget variance:
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Financial Reporting Financial Statement Analysis and Valuation a strategic perspective
ISBN: 978-1337614689
9th edition
Authors: James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
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