jalappala
Jun 8, 2014, 08:33 AM
Could anybody help me to solve this exercise please?
TheCo'n'Co produces printers. The CFO of the company made a budget for September 2012 : production & sales: 4,000 units, total sales revenues : $60,000, total direct materialcosts : $400,000, total variable manufacturing overhead costs :$22,400, total variable selling & administration expenses :$8,000, total fixed selling & administration expenses : $9,000.Per tablet the CFO expected to use 4 direct labor hours and the cost per direct labor hour is $30.
The CFO of the company gathered the following actual information for September 2012 : production & sales : 3,800 units, total sales revenues : $53,200, total direct material costs : $380,000, total variable manufacturing overhead costs : $20,520, total variable selling & administration expenses : $7,600, total fixed selling &administration expenses : $10,000. Per tablet 4.5 direct labor hours were used and the cost per direct labor hour was $35.
The fixed manufacturing overhead costs are allocated on the basis of 150%of the direct labor costs. The allocation key for the variable manufacturing costs is direct labor hours.
What is the best technique to calculate the cost of a tablet. Calculate the actual cost of a printer on the basis of your chosen technique.
Calculate the efficiency variance for the variable manufacturing overhead costs. Give a possible cause for the favorable or unfavorable variance.
Suppose Co'n'Co receives a bid for 1,000 additional printers at a price of $250 per unit. Is it interesting from a financial point of view to accept this offer? Motivate your answer on the basis of calculations.
STANDARD ACTUAL FLEXI VARIANCE
Production 4000 3800 3800
DLC 480000 598500 456000 142500U
DMC 400000 380000 380000
OVHD 22400 20520 21280 760F
OFHD 720000 897750 684000 213750U
Tot cost 1622400 1896770
Cost/unit 405,6 499,15
Basically, I calculated the actual cost per printer using the "Job costing" method and I obtained 499.15 as actual cost per printer.
For the question two I have some problems calculating the efficiency variance for variable overhead:
It should be: SR(SH-AH) --> 30 (16000-17100)= -33000. The rate variance is 17100 (30-35)= - 85500. Since the variance is 760 favorable I am surely making some mistakes, can somebody help me to find them? I have checked it over and over it but I could not find it.
Finally, for the last question do I just have to calculate the revenues and subtract the total cost (250X5000)-(405.6X5000)?
Thank you very much!
TheCo'n'Co produces printers. The CFO of the company made a budget for September 2012 : production & sales: 4,000 units, total sales revenues : $60,000, total direct materialcosts : $400,000, total variable manufacturing overhead costs :$22,400, total variable selling & administration expenses :$8,000, total fixed selling & administration expenses : $9,000.Per tablet the CFO expected to use 4 direct labor hours and the cost per direct labor hour is $30.
The CFO of the company gathered the following actual information for September 2012 : production & sales : 3,800 units, total sales revenues : $53,200, total direct material costs : $380,000, total variable manufacturing overhead costs : $20,520, total variable selling & administration expenses : $7,600, total fixed selling &administration expenses : $10,000. Per tablet 4.5 direct labor hours were used and the cost per direct labor hour was $35.
The fixed manufacturing overhead costs are allocated on the basis of 150%of the direct labor costs. The allocation key for the variable manufacturing costs is direct labor hours.
What is the best technique to calculate the cost of a tablet. Calculate the actual cost of a printer on the basis of your chosen technique.
Calculate the efficiency variance for the variable manufacturing overhead costs. Give a possible cause for the favorable or unfavorable variance.
Suppose Co'n'Co receives a bid for 1,000 additional printers at a price of $250 per unit. Is it interesting from a financial point of view to accept this offer? Motivate your answer on the basis of calculations.
STANDARD ACTUAL FLEXI VARIANCE
Production 4000 3800 3800
DLC 480000 598500 456000 142500U
DMC 400000 380000 380000
OVHD 22400 20520 21280 760F
OFHD 720000 897750 684000 213750U
Tot cost 1622400 1896770
Cost/unit 405,6 499,15
Basically, I calculated the actual cost per printer using the "Job costing" method and I obtained 499.15 as actual cost per printer.
For the question two I have some problems calculating the efficiency variance for variable overhead:
It should be: SR(SH-AH) --> 30 (16000-17100)= -33000. The rate variance is 17100 (30-35)= - 85500. Since the variance is 760 favorable I am surely making some mistakes, can somebody help me to find them? I have checked it over and over it but I could not find it.
Finally, for the last question do I just have to calculate the revenues and subtract the total cost (250X5000)-(405.6X5000)?
Thank you very much!