Management accounting exercises
[FONT=Arial, serif][SIZE=3]Good morning,
Could anybody help me to solve this exercise please?
TheCo'n'Co produces printers. The CFO of thecompany 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 costper direct labor hour is $30.[/SIZE][/FONT]
[FONT=Arial, serif][SIZE=3]TheCFO of the company gathered the following actual information forSeptember 2012 : production & sales : 3,800 units, total salesrevenues : $53,200, total direct material costs : $380,000, totalvariable manufacturing overhead costs : $20,520, total variableselling & administration expenses : $7,600, total fixed selling &administration expenses : $10,000. Per tablet 4.5 direct labor hourswere used and the cost per direct labor hour was $35.[/SIZE][/FONT]
[FONT=Arial, serif][SIZE=3]Thefixed manufacturing overhead costs are allocated on the basis of 150%of the direct labor costs. The allocation key for the variablemanufacturing costs is direct labor hours.
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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.
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 can't calculate 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 it? I have checked it over and over it but I could not find it.
Thank you very much!
