2010-08-08_144205_acc1
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31. Dukane Company expects to produce 1,200,000 units of Product XX in 2009. Monthly production is expected to range from 80,000 to 120,000 units. Budgeted variable manufacturing costs per unit are: direct materials $4, direct labour $6, and overhead $8. Budgeted fixed manufacturing costs per unit for amortization are $2 and for supervision are $1. In March 2009, the company incurs the following costs in producing 100,000 units: direct materials $425,000, direct labour $590,000, and variable overhead $805,000. Prepare a flexible budget report for March. (If answer is zero, please enter 0, do not leave any fields blank.)
DUKANE COMPANY
Manufacturing Flexible Budget Report
For the Month Ended March 31, 2009
Budget
Actual
Difference
Favourable F
Units produced
100000
100000
Unfavourable U
Variable costs
Direct materials
$
400000
$
425000
$
25000
U
Direct labour
600000
590000
10000
F
Overhead
800000
805000
5000
U
Total variable costs
$
1800000
$
1820000
$
20000
U
Fixed costs
Amortization
200000
200000
0
Supervision
100000
100000
0
Total fixed costs
300000
300000
0
Total costs
$
2100000
$
2120000
$
20000
U
Were costs controlled?
32. For its three investment centres, Stahl Company accumulates the following data:
I
II
III
Sales
$2,000,000
$3,000,000
$4,000,000
Controllable margin
1,200,000
2,000,000
3,200,000
Average operating assets
5,000,000
8,000,000
10,000,000
The centres expect the following changes in the next year: (I) increase sales 15%; (II) decrease costs $200,000; (III) decrease average operating assets $400,000. Calculate the expected return on investment (ROI) for each centre. Assume centre I has a contribution margin percentage of 75%. (Round your answers to 1 decimal place.)
Centre I:
28.5
%
Centre II:
27.5
%
Centre III:
33.3
%
33. Presented below is information related to the Prince George Division of Cut Wood, Inc.
Contribution margin
$1,200,000
Controllable margin
$800,000
Average operating assets
$3,200,000
Minimum rate of return
16%
Calculate the division's return on investment and residual income. (Round your answers to 0 decimal places.)
Return on investment
25
%
Residual income $
288000
34.Alcore Company estimates that 240,000 direct labour hours will be worked during 2009 in the assembly department. On this basis, the following budgeted manufacturing overhead data are calculated.
Variable Overhead Costs
Fixed Overhead Costs
Indirect labour
$ 72,000
Supervision
$ 72,000
Indirect materials
48,000
Amortization
36,000
Repairs
24,000
Insurance
12,000
Utilities
50,400
Rent
9,000
Lubricants
9,600
Property taxes
6,000
$204,000
$135,000
It is estimated that direct labour hours worked each month will range from 18,000 to 24,000 hours.
During January, 20,000 direct labour hours were worked and the following overhead costs were incurred.
Variable Overhead Costs
Fixed Overhead Costs
Indirect labour
$ 6,200
Supervision
$ 6,000
Indirect materials
3,600
Amortization
3,000
Repairs
1,600
Insurance
1,000
Utilities
3,300
Rent
800
Lubricants
830
Property taxes
500
$15,530
$11,300
(a) Complete a monthly flexible manufacturing overhead budget for each increment of 2,000 direct labour hours over the relevant range for the year ending December 31, 2009.
ALCORE COMPANY
Monthly Flexible Manufacturing Overhead Budget
Assembly Department
For the Year 2009
Activity level
Direct labour hours
18,000
20,000
22,000
24,000
Variable costs
Indirect labour
$
5400
$
6000
$
6600
$
7200
Indirect materials
3600
4000
4400
4800
Repair
1800
2000
2200
2400
Utilities
3780
4200
4620
5040
Lubricants
720
800
880
960
Total variable
15300
17000
18700
20400
Fixed costs
Supervision
6000
6000
6000
6000
Amortization
3000
3000
3000
3000
Insurance
1000
1000
1000
1000
Rent
750
750
750
750
Property taxes
500
500
500
500
Total fixed
11250
11250
11250
11250
Total costs
$
26550
$
28250
$
29950
$
31650
(b) Complete a manufacturing overhead budget report for January. (If a box should be blank enter a 0, note all boxes must be filled to be correct.)
ALCORE COMPANY
Manufacturing Overhead Budget Report (Flexible)
Assembly Department
For the Month Ended January 31, 2009
Difference
Favourable
F
Budget at
Actual Costs
Unfavourable
U
Direct labour hours (DLH)
20,000 DLH
20,000 DLH
No Difference
N/A
Variable costs
Indirect labour
$
6000
$
6200
$
200
U
Indirect materials
4000
3600
400
F
Repair
2000
1600
400
F
Utilities
4200
3300
900
F
Lubricants
800
830
30
U
Total variable
17000
15530
1470
F
Fixed costs
Supervision
6000
6000
0
N/A
Amortization
3000
3000
0
N/A
Insurance
1000
1000
0
N/A
Rent
750
800
50
U
Property taxes
500
500
0
N/A
Total fixed
11250
11300
50
U
Total costs
$
28250
$
26830
$
1420
F