Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Congratulations! Your work on the Air-Accountant shoes was so helpful that the company was bought out by Nike Inc and you made enough money you

image text in transcribed
Congratulations! Your work on the Air-Accountant shoes was so helpful that the company was bought out by Nike Inc and you made enough money you never have to work again! But...what fun would that be? So you started your own accounting consulting company called You Can Account On Us. Recently, you were hired by a company named Cow Hopp to help analyze budget variances. Information for Cow Hopp's Commemorative Milk Glasses is below: DMCA| Standard Quantity 10 lbs 225 hrs 225 hrs $300,000 estimated total 125.000 estimated units Standard Price Rate $ 195 perb $ 13.50 per hr $ 125 per hr Standard Unit Cost $ 351 $ 30.38 281 Var MOH(based on DL) Fixed MOH Additional data for the Milk Glasses is as follows: Units produced & sold 118.000 Pounds of day used 209.000 Total cost of clay $ 444.720 Labor hours worked 286.000 Total DL cost $ 3452.506 Total Var MOH Cost $ 368,970 Total Food MOH cost $ 296,000 You want to make a good impression on the folks at Cow Hopp so please produce a report showing the Quantity and Price variances for DM, DL, and Var MOH. In addition, please compute the volume and spending variances for Fixed MOH. Cow Hopp is considering a few changes. Please rerun your variances with the following changes: 1. Management has heard that material costs are starting to run higher. As a result, it has chosen to find a new supplier. It projects that with the new supplier, it could have purchased the clay for $2.00 per pound but it would have used 218,000 pounds to produce the same 118,000 units. Should management switch to the new supplier? 2. Management has also heard it is taking longer than expected to make these glasses. As a result, it plans to use labor that is more skilled. The new influx of skilled labor will take 264,000 hours to make the 118,000 glasses and will cost $3,498,000. Should management make this change

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Principles Of Auditing And Other Assurance Services

Authors: Ray Whittington, Kurt Pany

19th International Edition

125909524X, 9781259095245

More Books

Students also viewed these Accounting questions

Question

explain types of programming language and time to built

Answered: 1 week ago

Question

3. Identify and describe nine cultural value orientations.

Answered: 1 week ago

Question

d. How were you expected to contribute to family life?

Answered: 1 week ago