Urban Gila Cosmetics preparing their budget for the next year. They are a manufacturer, and they...

 

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Urban Gila Cosmetics preparing their budget for the next year. They are a manufacturer, and they are requesting your help to finalize the preparation. Here is a sample of their expected numbers: - Management expects a contribution margin of 40%, based on their production costs. - The budgeted direct materials expense is 3$ per unit while a unit manufactured costs 75 in direct labor. We applied a predetermined overhead rate to our actual production of units. That rate is 2$ per unit manufactured. - The level of quarterly production: as follows. Budgeted quantity manufactured was the same as actual manufactured units. Ist quarter 2nd quarter 3rd quarter 4th quarter 115 000,00 150 000,00 100 000,00 125.000,00 - The sales and research budget are the equivalent of 9% of the quarterly sales. - The fixed administration cost is stable every quarter at 450.000. Urban Gila cosmetics wants you to offer certain precisions on several budgeting aspects. Their questioning is as follows: 1) Please present the budget for the four quarters, including the sales revenues and all subsequent variable and fixed costs. 2) Using the total numbers of the year, please calculate the material yield variance because the actual consumed direct materials were 3,50$ per unit. Please calculate the overhead efficiency variance since the actual costs overhead cost per unit was 1.75$. Please calculate the labor rate variance since actual price for labor was 7,25$ per units. Define 3) Discuss the concept of over or under application based on the actual results for overhead. Urban Gila Cosmetics preparing their budget for the next year. They are a manufacturer, and they are requesting your help to finalize the preparation. Here is a sample of their expected numbers: - Management expects a contribution margin of 40%, based on their production costs. - The budgeted direct materials expense is 3$ per unit while a unit manufactured costs 75 in direct labor. We applied a predetermined overhead rate to our actual production of units. That rate is 2$ per unit manufactured. - The level of quarterly production: as follows. Budgeted quantity manufactured was the same as actual manufactured units. Ist quarter 2nd quarter 3rd quarter 4th quarter 115 000,00 150 000,00 100 000,00 125.000,00 - The sales and research budget are the equivalent of 9% of the quarterly sales. - The fixed administration cost is stable every quarter at 450.000. Urban Gila cosmetics wants you to offer certain precisions on several budgeting aspects. Their questioning is as follows: 1) Please present the budget for the four quarters, including the sales revenues and all subsequent variable and fixed costs. 2) Using the total numbers of the year, please calculate the material yield variance because the actual consumed direct materials were 3,50$ per unit. Please calculate the overhead efficiency variance since the actual costs overhead cost per unit was 1.75$. Please calculate the labor rate variance since actual price for labor was 7,25$ per units. Define 3) Discuss the concept of over or under application based on the actual results for overhead.

Answer rating: 100% (QA)

11st Quarter Sales 150000 Variable costs Direct materials 3 per unit x 150000 units 450000 Direct labor 7 per unit x 150000 units 1050000 Overhead 25 per unit x 150000 units 3750000 Total variable cos... View the full answer