Chapter 23 Exercises

34
Chapter 23 Exercises Flexible Budgets and Standard Cost Systems

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Flexible Budgets and Standard Cost Systems. Chapter 23 Exercises. Flexible Budgets. In-Class Exercises : Exercise No. Page E23-15 1451 Flexible Budget. (Use the format, as reflected on the next slide, to complete the exercise). Flexible Budget. Exercise Page - PowerPoint PPT Presentation

Transcript of Chapter 23 Exercises

Page 1: Chapter 23 Exercises

Chapter 23

Exercises

Flexible Budgets and Standard

Cost Systems

Page 2: Chapter 23 Exercises

Flexible BudgetsFlexible BudgetsFlexible BudgetsFlexible Budgets

In-Class Exercises:

Exercise No. Page E23-15 1451 Flexible Budget

In-Class Exercises:

Exercise No. Page E23-15 1451 Flexible Budget

(Use the format, as reflected on the next slide, to complete the exercise)

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ExerciseExercise PagePage E23-15 1451 Flexible BudgetE23-15 1451 Flexible Budget

ExerciseExercise PagePage E23-15 1451 Flexible BudgetE23-15 1451 Flexible Budget

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OfficePlus sells its main product, ergonomic mouse pads and provides the following information:

(1) Selling price of each pad…..$12.00

(2) Variable cost per pat………..$ 5.20

(3) Fixed costs up to 65,000 pads……$205,000

(4) Fixed costs above 65,000 pads…..$280,000

OfficePlus sells its main product, ergonomic mouse pads and provides the following information:

(1) Selling price of each pad…..$12.00

(2) Variable cost per pat………..$ 5.20

(3) Fixed costs up to 65,000 pads……$205,000

(4) Fixed costs above 65,000 pads…..$280,000

Flexible BudgetFlexible BudgetFlexible BudgetFlexible Budget

Prepare a monthly flexible budget for the product, showing sales revenue, variable costs, fixed costs, and income for volume levels of 45,000, 55,000, and 75,000 pads.

Prepare a monthly flexible budget for the product, showing sales revenue, variable costs, fixed costs, and income for volume levels of 45,000, 55,000, and 75,000 pads.

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Compute the Sales Revenue:Compute the Sales Revenue: 45,000 x $12 = $540,000 45,000 x $12 = $540,000

Compute the Sales Revenue:Compute the Sales Revenue: 45,000 x $12 = $540,000 45,000 x $12 = $540,000

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First two volume levels have First two volume levels have the same fixed costs.the same fixed costs.

First two volume levels have First two volume levels have the same fixed costs.the same fixed costs.

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Fixed costs increase at the Fixed costs increase at the 75,000 volume level.75,000 volume level.

Fixed costs increase at the Fixed costs increase at the 75,000 volume level.75,000 volume level.

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In-Class Exercises:

Exercise No. Page E23-19 1452 Material & Labor Variances

In-Class Exercises:

Exercise No. Page E23-19 1452 Material & Labor Variances

Material & Labor VariancesMaterial & Labor VariancesMaterial & Labor VariancesMaterial & Labor Variances

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Material & Labor VariancesMaterial & Labor VariancesMaterial & Labor VariancesMaterial & Labor Variances

Exercise E23-19:

Great Fender uses a standard cost accounting system and manufactures boat fenders. The following data is presented for 2014.

(1) Manufactured 20,000 boat fenders.

(2) Used 144,000 square feet of extruded vinyl, purchased at $1.05 per square foot.

(3) Production required 420 direct labor hours at $13.50 per hour.

(4) The direct materials standard was 7 sq. ft. of vinyl per fender, at a standard cost of $1.10 per sq. ft.

(5) The labor standard was 0.025 direct labor hour per fender, at a standard cost of $12.50 per hour.

Use this information to compute the cost and efficiency variances for direct materials and direct labor.

Exercise E23-19:

Great Fender uses a standard cost accounting system and manufactures boat fenders. The following data is presented for 2014.

(1) Manufactured 20,000 boat fenders.

(2) Used 144,000 square feet of extruded vinyl, purchased at $1.05 per square foot.

(3) Production required 420 direct labor hours at $13.50 per hour.

(4) The direct materials standard was 7 sq. ft. of vinyl per fender, at a standard cost of $1.10 per sq. ft.

(5) The labor standard was 0.025 direct labor hour per fender, at a standard cost of $12.50 per hour.

Use this information to compute the cost and efficiency variances for direct materials and direct labor.

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Direct Material VariancesDirect Material VariancesDirect Material VariancesDirect Material Variances

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Preliminary data/computations:

(1) Actual quantity…………144,000 sq ft (given)

(2) Standard quantity…….. 20,000units x 7 sq ft/unit = 140,000 sq ft

(3) Actual price…………….. $1.05/sq ft (given)

(4) Standard price…………. $1.10/sq ft (given)

Preliminary data/computations:

(1) Actual quantity…………144,000 sq ft (given)

(2) Standard quantity…….. 20,000units x 7 sq ft/unit = 140,000 sq ft

(3) Actual price…………….. $1.05/sq ft (given)

(4) Standard price…………. $1.10/sq ft (given)

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Direct Material VariancesDirect Material VariancesDirect Material VariancesDirect Material Variances

Preliminary data/computations:

(1) Actual quantity…………144,000 sq ft (given)

(2) Standard quantity…….. 20,000units x 7 sq ft/unit = 140,000 sq ft

(3) Actual price…………….. $1.05/sq ft (given)

(4) Standard price…………. $1.10/sq ft (given)

Preliminary data/computations:

(1) Actual quantity…………144,000 sq ft (given)

(2) Standard quantity…….. 20,000units x 7 sq ft/unit = 140,000 sq ft

(3) Actual price…………….. $1.05/sq ft (given)

(4) Standard price…………. $1.10/sq ft (given)

This item requires a computation based on the This item requires a computation based on the data presented.data presented.(20,000 units produced requiring 7 sq ft each)(20,000 units produced requiring 7 sq ft each)

This item requires a computation based on the This item requires a computation based on the data presented.data presented.(20,000 units produced requiring 7 sq ft each)(20,000 units produced requiring 7 sq ft each)

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Preliminary data/computations:

(1) Actual quantity…………144,000 sq ft (given)

(2) Standard quantity…….. 20,000units x 7 sq ft/unit = 140,000 sq ft

(3) Actual price…………….. $1.05/sq ft (given)

(4) Standard price…………. $1.10/sq ft (given)

Preliminary data/computations:

(1) Actual quantity…………144,000 sq ft (given)

(2) Standard quantity…….. 20,000units x 7 sq ft/unit = 140,000 sq ft

(3) Actual price…………….. $1.05/sq ft (given)

(4) Standard price…………. $1.10/sq ft (given)

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Direct Material VariancesDirect Material VariancesDirect Material VariancesDirect Material Variances

Preliminary data/computations:

(1) Actual quantity…………144,000 sq ft (given)

(2) Standard quantity…….. 20,000units x 7 sq ft/unit = 140,000 sq ft

(3) Actual price…………….. $1.05/sq ft (given)

(4) Standard price…………. $1.10/sq ft (given)

Preliminary data/computations:

(1) Actual quantity…………144,000 sq ft (given)

(2) Standard quantity…….. 20,000units x 7 sq ft/unit = 140,000 sq ft

(3) Actual price…………….. $1.05/sq ft (given)

(4) Standard price…………. $1.10/sq ft (given)

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Exercise E23-19:

Great Fender uses a standard cost accounting system and manufactures boat fenders. The following data is presented for 2014.

(1) Manufactured 20,000 boat fenders.

(2) Used 144,000 square feet of extruded vinyl, purchased at $1.05 per square foot.

(3) Production required 420 direct labor hours at $13.50 per hour.

(4) The direct materials standard was 7 sq. ft. of vinyl per fender, at a standard cost of $1.10 per sq. ft.

(5) The labor standard was 0.025 direct labor hour per fender, at a standard cost of $12.50 per hour.

Use this information to compute the cost and efficiency variances for direct materials and direct labor.

Exercise E23-19:

Great Fender uses a standard cost accounting system and manufactures boat fenders. The following data is presented for 2014.

(1) Manufactured 20,000 boat fenders.

(2) Used 144,000 square feet of extruded vinyl, purchased at $1.05 per square foot.

(3) Production required 420 direct labor hours at $13.50 per hour.

(4) The direct materials standard was 7 sq. ft. of vinyl per fender, at a standard cost of $1.10 per sq. ft.

(5) The labor standard was 0.025 direct labor hour per fender, at a standard cost of $12.50 per hour.

Use this information to compute the cost and efficiency variances for direct materials and direct labor.

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Direct Labor VariancesDirect Labor VariancesDirect Labor VariancesDirect Labor Variances

Preliminary data/computations:

(1) Actual quantity……… 420 hours (given)

(2) Standard quantity….. 20,000 units x .025 hours/unit = 500 hours

(3) Actual price…………. $13.50/hour (given)

(4) Standard price……… $12.50/hour (given)

Preliminary data/computations:

(1) Actual quantity……… 420 hours (given)

(2) Standard quantity….. 20,000 units x .025 hours/unit = 500 hours

(3) Actual price…………. $13.50/hour (given)

(4) Standard price……… $12.50/hour (given)

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Preliminary data/computations:

(1) Actual quantity……… 420 hours (given)

(2) Standard quantity….. 20,000 units x .025 hours/unit = 500 hours

(3) Actual price…………. $13.50/hour (given)

(4) Standard price……… $12.50/hour (given)

Preliminary data/computations:

(1) Actual quantity……… 420 hours (given)

(2) Standard quantity….. 20,000 units x .025 hours/unit = 500 hours

(3) Actual price…………. $13.50/hour (given)

(4) Standard price……… $12.50/hour (given)

This item requires a computation based on the This item requires a computation based on the data presented.data presented.(20,000 units produced using .025 hours each)(20,000 units produced using .025 hours each)

This item requires a computation based on the This item requires a computation based on the data presented.data presented.(20,000 units produced using .025 hours each)(20,000 units produced using .025 hours each)

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Preliminary data/computations:

(1) Actual quantity……… 420 hours (given)

(2) Standard quantity….. 20,000 units x .025 hours/unit = 500 hours

(3) Actual price…………. $13.50/hour (given)

(4) Standard price……… $12.50/hour (given)

Preliminary data/computations:

(1) Actual quantity……… 420 hours (given)

(2) Standard quantity….. 20,000 units x .025 hours/unit = 500 hours

(3) Actual price…………. $13.50/hour (given)

(4) Standard price……… $12.50/hour (given)

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Preliminary data/computations:

(1) Actual quantity……… 420 hours (given)

(2) Standard quantity….. 20,000 units x .025 hours/unit = 500 hours

(3) Actual price…………. $13.50/hour (given)

(4) Standard price……… $12.50/hour (given)

Preliminary data/computations:

(1) Actual quantity……… 420 hours (given)

(2) Standard quantity….. 20,000 units x .025 hours/unit = 500 hours

(3) Actual price…………. $13.50/hour (given)

(4) Standard price……… $12.50/hour (given)

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Direct Labor VariancesDirect Labor VariancesDirect Labor VariancesDirect Labor Variances

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Formula MethodFormula MethodFormula MethodFormula Method

Direct Labor VariancesDirect Labor VariancesDirect Labor VariancesDirect Labor Variances

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