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Exercise 18-6 PCB Corporation manufactures a single product. Monthly production costs incurred in the manufacturing process are shown below for the production of 3,561 units. The utilities and maintenance costs are mixed costs. The fixed portions of these costs are $356 and $237, respectively. Production in Units 3,561 Production Costs Direct materials $8,902 Direct labor 21,366 Utilities 2,493 Property taxes 1,187 Indirect labor 5,341 Supervisory salaries 2,255 Maintenance 1,306 Depreciation 2,849 Identify the above costs as variable, fixed, or mixed. Cost Direct materials Direct labor Utilities Property taxes Indirect labor Supervisory salaries Maintenance Depreciation LINK TO TEXT Calculate variable costs per unit, variable cost per unit for utilities and variable cost per unit for maintenance. Exclude mixed costs in the calculation for variable cost per unit. (Round answers to 2 decimal places e.g. 2.25.) Variable cost per unit (Exclude variable cost for utilities and maintenance) $ Variable cost per unit for utilities $ Variable cost per unit for maintenance $ LINK TO TEXT Calculate the expected costs when production is 5,935 units. Cost to produce 5,935 units $

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Related questions

Frizell Company is preparing its manufacturing overhead budgetfor 2011. Relevant data consist of the following.

· Units to beproduced (by quarters): 10,000, 12,000, 14,000, and 16,0

· Direct labor:Time is 1.5 hours per unit

· Variableoverhead costs per direct labor hour: Indirect materials $0.70;indirect labor $1.20; and maintenance $0.50

· Fixed overheadcosts per quarter: Supervisory salaries $35,000; depreciation$16,000; and maintenance $12,000

Prepare the manufacturing overhead budget for the year, showingquarterly data.

SEE ANSWER SHEET (WAY) BELOW...

**************************************************************************************************************************





Quarter





























































1





2





3





4





Year














































Variable costs




Indirect materials




Indirect labor




Maintenance




Total variable




Fixed costs




Supervisorysalaries




Depreciation




Maintenance




Total fixed




Total manufacturing overhead







Direct labor hours




Manufacturing overhead rate




  per direct labor hour







































Produciton volume 7,000 10,000
Direct materials 70,000 100,000
Direct labor 56,000 80,000
Indirect Materials 21,000 30,000
Supervisors salaries 12,000 12,000
Depreciation on Plant 10,000 10,000
Maintenance 32,000 44,000
Utilities 15,000 21,000
Insurance on plant and equipment 1,600 1,600
Property taxes on plant 2000 2000
Total 219,000 300,000

A. identify each cost as being variable, foxed, or mixed

B. Develope an equation for total monthly production costs

C. Predict total costs for a monthly production volume of 8,000units.

Exercise 10-9

Lowell Company’s manufacturing overhead budget for the firstquarter of 2014 contained the following data.

Variable Costs

Fixed Costs

Indirect materials

$11,749

Supervisory salaries

$36,825

Indirect labor

10,177

Depreciation

6,782

Utilities

7,296

Property taxes and insurance

7,225

Maintenance

5,613

Maintenance

4,034


Actual variable costs were: indirect materials $15,246, indirectlabor $9,315, utilities $9,022, and maintenance $4,987. Actualfixed costs equaled budgeted costs except for property taxes andinsurance, which were $8,665. The actual activity level equaled thebudgeted level.

All costs are considered controllable by the production departmentmanager except for depreciation, and property taxes andinsurance.

(a) Prepare a manufacturing overhead flexiblebudget report for the first quarter. (List variablecosts before fixed costs.)

LOWELL COMPANY
Manufacturing Overhead Flexible Budget Report
For the Quarter Ended March 31, 2014

Difference


Budget


Actual

Favorable F
Unfavorable U
Neither Favorable
nor Unfavorable N

Fixed CostsDepreciationTotal CostsIndirect LaborTotal FixedCostsMaintenanceIndirect MaterialsProperty Taxes andInsuranceSupervisory SalariesTotal Variable CostsUtilitiesVariableCosts

Total Variable CostsIndirect MaterialsSupervisorySalariesUtilitiesVariable CostsFixed CostsMaintenanceIndirectLaborProperty Taxes and InsuranceDepreciationTotal CostsTotal FixedCosts

$

$

$

FUN

Indirect LaborTotal Variable CostsTotalCostsDepreciationIndirect MaterialsTotal FixedCostsMaintenanceProperty Taxes and InsuranceUtilitiesSupervisorySalariesVariable CostsFixed Costs

FUN

MaintenanceSupervisory SalariesTotal CostsIndirect LaborTotalVariable CostsTotal Fixed CostsIndirect MaterialsUtilitiesPropertyTaxes and InsuranceVariable CostsDepreciationFixed Costs

FUN

Supervisory SalariesTotal CostsVariable CostsTotal VariableCostsIndirect MaterialsMaintenanceUtilitiesDepreciationPropertyTaxes and InsuranceTotal Fixed CostsFixed CostsIndirect Labor

FUN

Supervisory SalariesIndirect MaterialsIndirectLaborMaintenanceDepreciationTotal Fixed CostsVariable CostsTotalVariable CostsProperty Taxes and InsuranceFixed CostsUtilitiesTotalCosts

FUN

UtilitiesIndirect MaterialsTotal Fixed CostsMaintenanceTotalVariable CostsDepreciationProperty Taxes and InsuranceSupervisorySalariesVariable CostsFixed CostsIndirect LaborTotal Costs

Total Fixed CostsTotal Variable CostsProperty Taxes andInsuranceMaintenanceSupervisory SalariesIndirect MaterialsTotalCostsVariable CostsUtilitiesDepreciationIndirect LaborFixedCosts

FUN

MaintenanceIndirect LaborUtilitiesVariable CostsIndirectMaterialsTotal Variable CostsProperty Taxes and InsuranceTotalFixed CostsFixed CostsSupervisory SalariesDepreciationTotalCosts

FUN

UtilitiesTotal CostsTotal Fixed CostsSupervisory SalariesTotalVariable CostsVariable CostsIndirect LaborDepreciationFixedCostsIndirect MaterialsMaintenanceProperty Taxes and Insurance

FUN

UtilitiesSupervisory SalariesVariable CostsProperty Taxes andInsuranceTotal Fixed CostsDepreciationTotal CostsTotal VariableCostsFixed CostsIndirect LaborIndirect MaterialsMaintenance

FUN

Total Variable CostsSupervisory SalariesTotalCostsUtilitiesIndirect MaterialsVariable CostsIndirect LaborTotalFixed CostsMaintenanceProperty Taxes and InsuranceDepreciationFixedCosts

FUN

Total Variable CostsDepreciationFixedCostsMaintenanceSupervisory SalariesTotal CostsProperty Taxes andInsuranceUtilitiesVariable CostsTotal Fixed CostsIndirectLaborIndirect Materials

$

$

$

FUN


(b) Prepare a responsibility report for the firstquarter.

LOWELL COMPANY
Manufacturing Overhead Responsibility Report
For the Quarter Ended March 31, 2014

Difference


Controllable Costs


Budget


Actual

Favorable F
Unfavorable U
Neither Favorable
nor Unfavorable N

DepreciationIndirect LaborUtilitiesMaintenanceSupervisorySalariesIndirect MaterialsProperty Taxes and Insurance

$

$

$

FUN

Indirect LaborMaintenanceProperty Taxes andInsuranceDepreciationSupervisory SalariesUtilitiesIndirectMaterials

FUN

UtilitiesIndirect LaborMaintenanceIndirect MaterialsSupervisorySalariesProperty Taxes and InsuranceDepreciation

FUN

Property Taxes and InsuranceIndirectLaborUtilitiesDepreciationSupervisory SalariesIndirectMaterialsMaintenance

FUN

UtilitiesProperty Taxes and InsuranceDepreciationSupervisorySalariesMaintenanceIndirect MaterialsIndirect Labor

FUN

$

$

$

FUN

Exercise 10-8

Rensing Groomers is in the dog-grooming business. Its operatingcosts are described by the following formulas:

Grooming supplies (variable)

y

=

$0 + $3x

Direct labor (variable)

y

=

$0 + $14x

Overhead (mixed)

y

=

$9,450 + $2x


Milo, the owner, has determined that direct labor is the costdriver for all three categories of costs.

LINK TO TEXT

LINK TO TEXT

Prepare a flexible budget for activity levels of 526, 577, and674 direct labor hours. (List variable costs beforefixed costs.)

RENSING GROOMERS
Flexible Budget

Activity LevelDirect LaborDirect Labor HoursFixed CostsGroomingSuppliesOverheadTotal CostsTotal Fixed CostsTotal VariableCostsVariable Costs

Activity LevelDirect LaborDirect Labor HoursFixed CostsGroomingSuppliesOverheadTotal CostsTotal Fixed CostsTotal VariableCostsVariable Costs

Activity LevelDirect LaborDirect Labor HoursFixed CostsGroomingSuppliesOverheadTotal CostsTotal Fixed CostsTotal VariableCostsVariable Costs

Activity LevelDirect LaborDirect Labor HoursFixed CostsGroomingSuppliesOverheadTotal CostsTotal Fixed CostsTotal VariableCostsVariable Costs

$

$

$

Activity LevelDirect LaborDirect Labor HoursFixed CostsGroomingSuppliesOverheadTotal CostsTotal Fixed CostsTotal VariableCostsVariable Costs

Activity LevelDirect LaborDirect Labor HoursFixed CostsGroomingSuppliesOverheadTotal CostsTotal Fixed CostsTotal VariableCostsVariable Costs

Activity LevelDirect LaborDirect Labor HoursFixed CostsGroomingSuppliesOverheadTotal CostsTotal Fixed CostsTotal VariableCostsVariable Costs

Activity LevelDirect LaborDirect Labor HoursFixed CostsGroomingSuppliesOverheadTotal CostsTotal Fixed CostsTotal VariableCostsVariable Costs

Activity LevelDirect LaborDirect Labor HoursFixed CostsGroomingSuppliesOverheadTotal CostsTotal Fixed CostsTotal VariableCostsVariable Costs

Activity LevelDirect LaborDirect Labor HoursFixed CostsGroomingSuppliesOverheadTotal CostsTotal Fixed CostsTotal VariableCostsVariable Costs

Activity LevelDirect LaborDirect Labor HoursFixed CostsGroomingSuppliesOverheadTotal CostsTotal Fixed CostsTotal VariableCostsVariable Costs

$

$

$

LINK TO TEXT

LINK TO TEXT

(a) Calculate the total cost per direct laborhour at each of the activity levels specified in part (a).(Round answers to 2 decimal places, e.g.10.25.)

Activity level 1

$

Activity level 2

$

Activity level 3

$


(b) The groomers at Rensing normally work a totalof 616 direct labor hours during each month. Each grooming jobnormally takes a groomer 1.30 hours. Milo wants to earn a profitequal to 30% of the costs incurred. Determine what he should chargeeach pet owner for grooming. (Round answer to 2 decimalplaces, e.g. 10.25.)

Charge per client

$

Exercise 10-9

Lowell Company’s manufacturing overhead budget for the firstquarter of 2014 contained the following data.

Variable Costs

Fixed Costs

Indirect materials

$11,004

Supervisory salaries

$35,170

Indirect labor

10,758

Depreciation

6,084

Utilities

7,760

Property taxes and insurance

7,986

Maintenance

5,575

Maintenance

5,566


Actual variable costs were: indirect materials $15,083, indirectlabor $9,497, utilities $9,235, and maintenance $5,111. Actualfixed costs equaled budgeted costs except for property taxes andinsurance, which were $8,225. The actual activity level equaled thebudgeted level.

All costs are considered controllable by the production departmentmanager except for depreciation, and property taxes andinsurance.

(a) Prepare a manufacturing overhead flexiblebudget report for the first quarter. (List variablecosts before fixed costs.)

LOWELL COMPANY
Manufacturing Overhead Flexible Budget Report
For the Quarter Ended March 31, 2014

Difference


Budget


Actual

Favorable F
Unfavorable U
Neither Favorable
nor Unfavorable N

MaintenanceProperty Taxes and InsuranceVariable CostsSupervisorySalariesTotal CostsTotal Fixed CostsTotal VariableCostsUtilitiesIndirect MaterialsDepreciationFixed CostsIndirectLabor

Total Fixed CostsTotal CostsMaintenanceSupervisorySalariesProperty Taxes and InsuranceIndirect LaborFixedCostsVariable CostsDepreciationUtilitiesTotal VariableCostsIndirect Materials

$

$

$

FUN

MaintenanceTotal Fixed CostsTotalCostsUtilitiesDepreciationSupervisory SalariesFixed CostsIndirectLaborProperty Taxes and InsuranceIndirect MaterialsTotal VariableCostsVariable Costs

FUN

Total Variable CostsUtilitiesVariable CostsMaintenanceTotalCostsProperty Taxes and InsuranceSupervisory SalariesTotal FixedCostsDepreciationFixed CostsIndirect LaborIndirect Materials

FUN

Indirect LaborProperty Taxes and InsuranceSupervisorySalariesTotal CostsTotal Fixed CostsUtilitiesIndirectMaterialsMaintenanceFixed CostsTotal Variable CostsVariableCostsDepreciation

FUN

Property Taxes and InsuranceVariable CostsSupervisorySalariesTotal CostsTotal Variable CostsUtilitiesIndirectMaterialsTotal Fixed CostsDepreciationMaintenanceIndirectLaborFixed Costs

FUN

Supervisory SalariesTotal CostsTotal Fixed CostsMaintenanceTotalVariable CostsUtilitiesProperty Taxes and InsuranceVariableCostsDepreciationFixed CostsIndirect LaborIndirect Materials

DepreciationTotal CostsSupervisory SalariesMaintenanceVariableCostsFixed CostsProperty Taxes and InsuranceUtilitiesIndirectLaborTotal Fixed CostsTotal Variable CostsIndirect Materials

FUN

MaintenanceTotal Variable CostsProperty Taxes andInsuranceSupervisory SalariesFixed CostsTotalCostsDepreciationTotal Fixed CostsIndirect LaborUtilitiesVariableCostsIndirect Materials

FUN

Property Taxes and InsuranceSupervisory SalariesIndirectMaterialsIndirect LaborTotal CostsUtilitiesTotal Fixed CostsFixedCostsMaintenanceVariable CostsDepreciationTotal Variable Costs

FUN

UtilitiesSupervisory SalariesMaintenanceVariable CostsIndirectLaborTotal Variable CostsTotal CostsProperty Taxes andInsuranceDepreciationFixed CostsIndirect MaterialsTotal FixedCosts

FUN

Variable CostsProperty Taxes and InsuranceDepreciationIndirectMaterialsFixed CostsIndirect LaborUtilitiesMaintenanceSupervisorySalariesTotal CostsTotal Fixed CostsTotal Variable Costs

FUN

Indirect MaterialsVariable CostsMaintenanceSupervisorySalariesIndirect LaborTotal Variable CostsDepreciationPropertyTaxes and InsuranceTotal CostsFixed CostsTotal FixedCostsUtilities

$

$

$

FUN


(b) Prepare a responsibility report for the firstquarter.

LOWELL COMPANY
Manufacturing Overhead Responsibility Report
For the Quarter Ended March 31, 2014

Difference


Controllable Costs


Budget


Actual

Favorable F
Unfavorable U
Neither Favorable
nor Unfavorable N

Indirect LaborIndirect MaterialsMaintenanceSupervisorySalariesUtilitiesProperty Taxes and InsuranceDepreciation

$

$

$

FUN

Supervisory SalariesMaintenanceUtilitiesIndirectMaterialsProperty Taxes and InsuranceDepreciationIndirect Labor

FUN

MaintenanceIndirect LaborIndirect MaterialsProperty Taxes andInsuranceSupervisory SalariesUtilitiesDepreciation

FUN

Property Taxes and InsuranceUtilitiesMaintenanceSupervisorySalariesDepreciationIndirect MaterialsIndirect Labor

FUN

MaintenanceSupervisory SalariesIndirect MaterialsProperty Taxesand InsuranceUtilitiesDepreciationIndirect Labor

FUN

$

$

$

FUN

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Exercise 10-14

The Mixing Department manager of Malone Company is able tocontrol all overhead costs except rent, property taxes, andsalaries. Budgeted monthly overhead costs for the MixingDepartment, in alphabetical order, are:

Indirect labor

$12,870

Property taxes

$1,150

Indirect materials

7,980

Rent

1,840

Lubricants

2,600

Salaries

11,860

Maintenance

3,820

Utilities

6,550


Actual costs incurred for January 2014 are indirect labor $13,970;indirect materials $14,070; lubricants $2,070; maintenance $3,820;property taxes $2,050; rent $1,840; salaries $11,860; and utilities$6,540.

Prepare a responsibility report for January 2014.

MALONE COMPANY
Mixing Department
Responsibility Report
For the Month Ended January 31, 2014

Difference


Controllable Costs


Budget


Actual

Favorable F
Unfavorable U
Neither Favorable
nor Unfavorable N

SalariesIndirect MaterialsLubricantsMaintenanceUtilitiesIndirectLaborProperty TaxesRent

$

$

$

FNU

SalariesProperty TaxesRentUtilitiesIndirect LaborIndirectMaterialsLubricantsMaintenance

NUF

Indirect MaterialsLubricantsRentUtilitiesPropertyTaxesSalariesMaintenanceIndirect Labor

NFU

RentLubricantsSalariesUtilitiesIndirect LaborPropertyTaxesIndirect MaterialsMaintenance

UFN

Indirect LaborRentUtilitiesIndirectMaterialsLubricantsMaintenanceProperty TaxesSalaries

FUN

$

$

$

UFN

Exercise 10-15

Deitz Inc. has three divisions which are operated as profitcenters. Actual operating data for the divisions listedalphabetically are as follows.

Compute the missing amounts. Show computations.

Operating Data

Women’s Shoes

Men’s Shoes

Children’s Shoes

Contribution margin

$266,000

$

(3)

$191,520

Controllable fixed costs

106,400

(4)

(5)

Controllable margin

(1)

95,760

101,080

Sales

638,400

478,800

(6)

Variable costs

(2)

340,480

266,000

LINK TO TEXT

Prepare a responsibility report for the Women’s Shoes Divisionassuming (1) the data are for the month ended June 30, 2014, and(2) all data equal budget except variable costs which are $10,640over budget.

DEITZ INC.
Women’s Shoe Division
Responsibility Report
For the Month Ended June 30, 2014

Difference


Budget


Actual

Favorable F
Unfavorable U
Neither Favorable
nor Unfavorable N

Contribution MarginControllable MarginControllable FixedCostsFixed CostsGross ProfitNet Income/(Loss)SalesVariableCosts

$

$

$

FUN

Contribution MarginControllable MarginControllable FixedCostsFixed CostsGross ProfitNet Income/(Loss)SalesVariableCosts

FUN

Contribution MarginControllable MarginControllable FixedCostsFixed CostsGross ProfitNet Income/(Loss)SalesVariableCosts

FUN

Contribution MarginControllable MarginControllable FixedCostsFixed CostsGross ProfitNet Income/(Loss)SalesVariableCosts

FUN

Contribution MarginControllable MarginControllable FixedCostsFixed CostsGross ProfitNet Income/(Loss)SalesVariableCosts

$

$

$

FUN

Exercise 10-19

The Pletcher Transportation Company uses a responsibilityreporting system to measure the performance of its three investmentcenters: Planes, Taxis, and Limos. Segment performance is measuredusing a system of responsibility reports and return on investmentcalculations. The allocation of resources within the company andthe segment managers’ bonuses are based in part on the resultsshown in these reports.

Recently, the company was the victim of a computer virus thatdeleted portions of the company’s accounting records. This wasdiscovered when the current period’s responsibility reports werebeing prepared. The printout of the actual operating resultsappeared as follows.

Determine the missing pieces of information below.(Round intermediate calculations and final answer to 0decimal places, e.g. 1,255.)

Planes

Taxis

Limos

Service revenue

$

$501,500

$

Variable costs

5,506,800

300,500

Contribution margin

246,200

515,892

Controllable fixed costs

1,499,800

Controllable margin

76,100

271,692

Average operating assets

24,952,000

1,509,400

Return on investment

13

%

8

%

%

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