Zelmer Company manufactures tablecloths. Sales have grown rapidly over the past 2 years. As a result,...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Zelmer Company manufactures tablecloths. Sales have grown rapidly over the past 2 years. As a result, the president has installed a budgetary control system for 2020. The following data were used in developing the master manufacturing overhead budget for the Ironing Department, which is based on an activity index of direct labor hours. Variable costs Rate per Direct Labor Hour Annual Fixed Costs Indirect labor $0.43 Supervision $45,120 Indirect materials Factory utilities Factory repairs 0.52 Depreciation 18,000 0.33 Insurance 17,640 0.21 Rent 27,720 The master overhead budget was prepared on the expectation that 480,800 direct labor hours will be worked during the year. In June, 46,500 direct labor hours were worked. At that level of activity, actual costs were as shown below. Variable-per direct labor hour: indirect labor $0.47, indirect materials $0.50, factory utilities $0.37, and factory repairs $0.25. Fixed: same as budgeted. ZELMER COMPANY Monthly Manufacturing Overhead Flexible Budget Ironing Department For the Year 2020 (a) Prepare a monthly manufacturing overhead flexible budget for the year ending December 31, 2020, assuming production levels range from 38,700 to 53,400 direct labor hours. Use increments of 4,900 direct labor hours. (List variable costs before fixed costs.) A A LA SA A A A $ (b) Prepare a budget report for June comparing actual results with budget data based on the flexible budget. (List variable costs before fixed costs.) F F +A ZELMER COMPANY Ironing Department Manufacturing Overhead Flexible Budget Report For the Month Ended June 30, 2020 Budget Actual Costs A A Differ Favor Unfavo Neither Fa nor Unfa $ +A $ Durham Company uses a responsibility reporting system. It has divisions in Denver, Seattle, and San Diego. Each division has three production departments: Cutting, Shaping, and Finishing. The responsibility for each department rests with a manager who reports to the division production manager. Each division manager reports to the vice president of production. There are also vice presidents for marketing and finance. All vice presidents report to the president. In January 2020, controllable actual and budget manufacturing overhead cost data for the departments and divisions were as shown below. Manufacturing Overhead Actual Budget Individual costs-Cutting Department-Seattle Indirect labor $73,500 $69,700 Indirect materials 48,100 45,700 Maintenance Utilities Supervision 20,700 17,800 19,900 16,800 22,400 20,000 $184,600 $170,000 Total costs Shaping Department-Seattle $157,900 $148,500 Finishing Department-Seattle 210,800 203,500 Denver division 678,100 672,500 San Diego division 722,500 715,500 Additional overhead costs were incurred as follows: Seattle division production manager-actual costs $53,000, budget $51,500; vice president of production-actual costs $65,500, budget $64,200; president-actual costs $76,900, budget $74,100. These expenses are not allocated. The vice presidents who report to the president, other than the vice president of production, had the following expenses. Vice President Actual Budget Marketing $134,000 $130,200 Finance 109,100 104,900 Total Prepare the Manufacturing overhead-Cutting Department manager-Seattle division responsibility report. To Cutting Department Manager-Seattle Division Controllable Costs: +A $ AA Budget EA $ AA Actual Month: January Favorable Unfavorable Neither Favorable nor Unfavorable A +A Prepare the Manufacturing overhead-Seattle division manager responsibility report. To Division Production Manager-Seattle Controllable Costs: Seattle Division Departments: Budget $ Total $ +A Actual $ A A Month: January Favorable Unfavorable Neither Favorable nor Unfavorable A +A $ Zelmer Company manufactures tablecloths. Sales have grown rapidly over the past 2 years. As a result, the president has installed a budgetary control system for 2020. The following data were used in developing the master manufacturing overhead budget for the Ironing Department, which is based on an activity index of direct labor hours. Variable costs Rate per Direct Labor Hour Annual Fixed Costs Indirect labor $0.43 Supervision $45,120 Indirect materials Factory utilities Factory repairs 0.52 Depreciation 18,000 0.33 Insurance 17,640 0.21 Rent 27,720 The master overhead budget was prepared on the expectation that 480,800 direct labor hours will be worked during the year. In June, 46,500 direct labor hours were worked. At that level of activity, actual costs were as shown below. Variable-per direct labor hour: indirect labor $0.47, indirect materials $0.50, factory utilities $0.37, and factory repairs $0.25. Fixed: same as budgeted. ZELMER COMPANY Monthly Manufacturing Overhead Flexible Budget Ironing Department For the Year 2020 (a) Prepare a monthly manufacturing overhead flexible budget for the year ending December 31, 2020, assuming production levels range from 38,700 to 53,400 direct labor hours. Use increments of 4,900 direct labor hours. (List variable costs before fixed costs.) A A LA SA A A A $ (b) Prepare a budget report for June comparing actual results with budget data based on the flexible budget. (List variable costs before fixed costs.) F F +A ZELMER COMPANY Ironing Department Manufacturing Overhead Flexible Budget Report For the Month Ended June 30, 2020 Budget Actual Costs A A Differ Favor Unfavo Neither Fa nor Unfa $ +A $ Durham Company uses a responsibility reporting system. It has divisions in Denver, Seattle, and San Diego. Each division has three production departments: Cutting, Shaping, and Finishing. The responsibility for each department rests with a manager who reports to the division production manager. Each division manager reports to the vice president of production. There are also vice presidents for marketing and finance. All vice presidents report to the president. In January 2020, controllable actual and budget manufacturing overhead cost data for the departments and divisions were as shown below. Manufacturing Overhead Actual Budget Individual costs-Cutting Department-Seattle Indirect labor $73,500 $69,700 Indirect materials 48,100 45,700 Maintenance Utilities Supervision 20,700 17,800 19,900 16,800 22,400 20,000 $184,600 $170,000 Total costs Shaping Department-Seattle $157,900 $148,500 Finishing Department-Seattle 210,800 203,500 Denver division 678,100 672,500 San Diego division 722,500 715,500 Additional overhead costs were incurred as follows: Seattle division production manager-actual costs $53,000, budget $51,500; vice president of production-actual costs $65,500, budget $64,200; president-actual costs $76,900, budget $74,100. These expenses are not allocated. The vice presidents who report to the president, other than the vice president of production, had the following expenses. Vice President Actual Budget Marketing $134,000 $130,200 Finance 109,100 104,900 Total Prepare the Manufacturing overhead-Cutting Department manager-Seattle division responsibility report. To Cutting Department Manager-Seattle Division Controllable Costs: +A $ AA Budget EA $ AA Actual Month: January Favorable Unfavorable Neither Favorable nor Unfavorable A +A Prepare the Manufacturing overhead-Seattle division manager responsibility report. To Division Production Manager-Seattle Controllable Costs: Seattle Division Departments: Budget $ Total $ +A Actual $ A A Month: January Favorable Unfavorable Neither Favorable nor Unfavorable A +A $
Expert Answer:
Related Book For
Posted Date:
Students also viewed these finance questions
-
Zelmer Company manufactures tablecloths. Sales have grown rapidly over the past 2 years. As a result, the president has installed a budgetary control system for 2017. The following data were used in...
-
Zelmer Company manufactures tablecloths. Sales have grown rapidly over the past 2 years. As a result, the president has installed a budgetary control system for 2017. The following data were used in...
-
How does inventory turnover provide information about a companys short-term liquidity?
-
1. A taxi company currently has nine cabs in its fleet, and its total daily cost is $4,000. If the company added a tenth cab, its daily total cost would be $4,200, or $420 per cab. Adding the tenth...
-
Which of the following events would be an extraordinary loss? a. Loss due to an earthquake b. Loss on the sale of equipment c. Loss on discontinued operations d. All of the above are extraordinary...
-
How does the strategic plan influence preparation of the master budget?
-
Suppose that a system consists of four subsystems. For the baseline configuration, the system will fail if each subsystem fails. The reliability data of each unit that comprise each subsystem in the...
-
Recall that for the shift cipher, we have M = C = K = Z/26Z (the integers modulo 26). Encryption is given by EK(M) M +K (mod 26) (modular addition of message and key). (i) Give a formal mathematical...
-
Describe the process by which humans learn language.
-
If English is your first language, did your parents or grandparents speak a different first language? How do you feel about your ability (or lack of ability) in that language? In the United States,...
-
Why is ethnocentrism so common in the world, and why is cultural relativism often extremely difficult?
-
Do you believe in the possibility of a society and a world without violence? What do you think is the relationship between physical violence and less obvious forms of violence such as discrimination,...
-
Describe some of the ways in which the experiences of anthropologists working today are different from those of anthropologists working 50 or more years ago.
Study smarter with the SolutionInn App