ACCT 002 Lecture Notes - Lecture 16: Stabilisation Force In Bosnia And Herzegovina, International Labor Standards

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skywildebeest596

5 Aug 2020

School

College of The Sequoias

Department

Accounting (ACCT)

Course

ACCT 002

Professor

teller

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Document Summary

Standard hours allowed per unit 0. 12 hour. Calc the standard hours for the actual units produced. Sh = actual units * standard hours allowed per unit = 1200 * 0. 12 = 144. Applied fixed oh = sh * sfor = 144*10 = 1440. Total variance = 210 u unfavourable because actual cost exceeded applied cost. Formula approach = bfoh - (sh * sfor) 150 f + 360 u = 210 u. Budgets set standards that are used to control and evaluate managerial performance. However budgets are aggregate measures of performance. They identify the revenues and costs in total that an organization should experience if plans are executed as expected. By comparing the actual costs and actual revenues with the corresponding budgeted amounts at the same level of activity, a measure of managerial efficiency emmerges. Quantity standard * price standard = unit standard. Can be achieved under efficient operating conditions. Unit standards are a fundamental requirement for a flexible budgeting system.

Related Questions

The standard cost card for the single product manufactured by Cutter, Inc., is given below:

Inputs	(1) Standard Quantity or Hours	(2) Standard Price or Rate			Standard Cost (1) Ã (2)
Direct materials	4.2 yards	$	5.00	per yard	$	21.00
Direct labor	0.8 hours	$	15.00	per hour		12.00
Variable overhead	0.8 hours	$	1.50	per hour		1.20
Fixed overhead	0.8 hours	$	5.00	per hour		4.00
Total standard cost per unit					$	38.20

Manufacturing overhead is applied to production on the basis of standard direct labor-hours. During the year, the company worked 8,760 hours and manufactured 10,700 units of product. Selected data relating to the companyâs fixed manufacturing overhead cost for the year are shown below:

Actual Fixed Overhead		Budgeted Fixed Overhead		Fixed Overhead Applied to Work in Process

$42,000		?		? hours Ã $? per hour = $?
	Budget variance, $?		Volume variance, $1,800 F

Required:

1. What were the standard hours allowed for the yearâs production?

2. What was the amount of budgeted fixed overhead cost for the year?

3. What was the fixed overhead budget variance for the year? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

4. What denominator activity level did the company use in setting the predetermined overhead rate for the year?

limellama64

24. ToolTime has a standard of 1.5 pounds of materials per unit, at$2 per pound. In producing 2,000 units, ToolTime used 3,100 poundsof materials at a total cost of $6,045. ToolTime's materials pricevariance is
A) $45 U.
B) $155 F.
C) $200 F.
D) $350 F.

25. If a company issues raw materials to production at a cost of$12,600 when the standard cost is $12,200, it will
A) debit Materials Price Variance for $400.
B) credit Materials Price Variance for $400.
C) debit Materials Quantity Variance for $400.
D) credit Material Quantity Variance for $400.

26. If a company is concerned with the potential negative effectsof establishing standards, it should
A) set loose standards that are easy to fulfill.
B) offer wage incentives to those meeting standards.
C) not employ any standards.
D) set tight standards in order to motivate people.

27. The overhead volume variance is
A) actual overhead less overhead budgeted for actual hours.
B) actual overhead less overhead budgeted for standard hoursallowed.
C) overhead budgeted for actual hours less applied overhead.
D) the fixed overhead rate times the difference between normalcapacity hours and standard hours allowed.

28. Which of the following statements about overhead variances isfalse?
A) Standard hours allowed are used in calculating the controllablevariance.
B) Standard hours allowed are used in calculating the volumevariance.
C) The controllable variance pertains solely to fixed costs.
D) The total overhead variance pertains to both variable and fixedcosts.

29. The overhead variances measure whether overhead costsAreEffectively Managed Were Used Effectively

A) Controllable Controllable and Volume

B) Controllable Volume

C) Controllable and Volume Controllable

D) Volume Controllable

erinbadger748

FUN Inc. has a fully automated production facility in whichalmost 97 percent of averhead costs are driven by machine hours. Asthe company's cost accountant, you have computed the followingoverhead variances for May:

Variable overhead spending variance $34,000 F

Variable overhead efficiency variance 41,200 F

Fixed overhead spending variance 28,000 U

Fixed overhead volume variance 20,000 U

The company's president in concerned about the variance amountsand has asked you to show her how the variances were computed andto answer several questions. Budgeted fixed averhead for the monthis $1,000,000; the predetermined variable and fixed overhead ratesare, respectively, $20 and $40 per machine hour. Bugdeted capacityis 20,000 units.

a. Using the four-variance approach, prepare an overheadanalysis in as much detail as possible.

b. What is the standard number of machine hours allowed for eachunit of output?

c. How many actual hours were worked in May?

d. What is the total spending variance?

e. What additional information about the manufacturing overheadvariances is gained by inserting detailed computations into thevariable and fixed manufacturing overhead variance analysis?

f. How would the overhead variances be closed if thethree-variance approach were used and the variances are consideredinsignificant?

beigemouse271

ACCT 002 Lecture Notes - Lecture 16: Stabilisation Force In Bosnia And Herzegovina, International Labor Standards

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