Question
Exercise 10-9 Lowell Companys manufacturing overhead budget for the first quarter of 2014 contained the following data. Variable Costs Fixed Costs Indirect materials $11,749 Supervisory
Exercise 10-9
Lowell Companys manufacturing overhead budget for the first quarter 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, indirect labor $9,315, utilities $9,022, and maintenance $4,987. Actual fixed costs equaled budgeted costs except for property taxes and insurance, which were $8,665. The actual activity level equaled the budgeted level. All costs are considered controllable by the production department manager except for depreciation, and property taxes and insurance. (a) Prepare a manufacturing overhead flexible budget report for the first quarter. (List variable costs 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 Fixed CostsMaintenanceIndirect MaterialsProperty Taxes and InsuranceSupervisory SalariesTotal Variable CostsUtilitiesVariable Costs | ||||
| Total Variable CostsIndirect MaterialsSupervisory SalariesUtilitiesVariable CostsFixed CostsMaintenanceIndirect LaborProperty Taxes and InsuranceDepreciationTotal CostsTotal Fixed Costs | $ | $ | $ | FUN |
| Indirect LaborTotal Variable CostsTotal CostsDepreciationIndirect MaterialsTotal Fixed CostsMaintenanceProperty Taxes and InsuranceUtilitiesSupervisory SalariesVariable CostsFixed Costs | FUN | |||
| MaintenanceSupervisory SalariesTotal CostsIndirect LaborTotal Variable CostsTotal Fixed CostsIndirect MaterialsUtilitiesProperty Taxes and InsuranceVariable CostsDepreciationFixed Costs | FUN | |||
| Supervisory SalariesTotal CostsVariable CostsTotal Variable CostsIndirect MaterialsMaintenanceUtilitiesDepreciationProperty Taxes and InsuranceTotal Fixed CostsFixed CostsIndirect Labor | FUN | |||
| Supervisory SalariesIndirect MaterialsIndirect LaborMaintenanceDepreciationTotal Fixed CostsVariable CostsTotal Variable CostsProperty Taxes and InsuranceFixed CostsUtilitiesTotal Costs | FUN | |||
| UtilitiesIndirect MaterialsTotal Fixed CostsMaintenanceTotal Variable CostsDepreciationProperty Taxes and InsuranceSupervisory SalariesVariable CostsFixed CostsIndirect LaborTotal Costs | ||||
| Total Fixed CostsTotal Variable CostsProperty Taxes and InsuranceMaintenanceSupervisory SalariesIndirect MaterialsTotal CostsVariable CostsUtilitiesDepreciationIndirect LaborFixed Costs | FUN | |||
| MaintenanceIndirect LaborUtilitiesVariable CostsIndirect MaterialsTotal Variable CostsProperty Taxes and InsuranceTotal Fixed CostsFixed CostsSupervisory SalariesDepreciationTotal Costs | FUN | |||
| UtilitiesTotal CostsTotal Fixed CostsSupervisory SalariesTotal Variable CostsVariable CostsIndirect LaborDepreciationFixed CostsIndirect MaterialsMaintenanceProperty Taxes and Insurance | FUN | |||
| UtilitiesSupervisory SalariesVariable CostsProperty Taxes and InsuranceTotal Fixed CostsDepreciationTotal CostsTotal Variable CostsFixed CostsIndirect LaborIndirect MaterialsMaintenance | FUN | |||
| Total Variable CostsSupervisory SalariesTotal CostsUtilitiesIndirect MaterialsVariable CostsIndirect LaborTotal Fixed CostsMaintenanceProperty Taxes and InsuranceDepreciationFixed Costs | FUN | |||
| Total Variable CostsDepreciationFixed CostsMaintenanceSupervisory SalariesTotal CostsProperty Taxes and InsuranceUtilitiesVariable CostsTotal Fixed CostsIndirect LaborIndirect Materials | $ | $ | $ | FUN |
(b) Prepare a responsibility report for the first quarter.
| 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 LaborUtilitiesMaintenanceSupervisory SalariesIndirect MaterialsProperty Taxes and Insurance | $ | $ | $ | FUN |
| Indirect LaborMaintenanceProperty Taxes and InsuranceDepreciationSupervisory SalariesUtilitiesIndirect Materials | FUN | |||
| UtilitiesIndirect LaborMaintenanceIndirect MaterialsSupervisory SalariesProperty Taxes and InsuranceDepreciation | FUN | |||
| Property Taxes and InsuranceIndirect LaborUtilitiesDepreciationSupervisory SalariesIndirect MaterialsMaintenance | FUN | |||
| UtilitiesProperty Taxes and InsuranceDepreciationSupervisory SalariesMaintenanceIndirect MaterialsIndirect Labor | FUN | |||
| $ | $ | $ | FUN | |
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Exercise 10-9
Lowell Companys manufacturing overhead budget for the first quarter 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, indirect labor $9,497, utilities $9,235, and maintenance $5,111. Actual fixed costs equaled budgeted costs except for property taxes and insurance, which were $8,225. The actual activity level equaled the budgeted level. All costs are considered controllable by the production department manager except for depreciation, and property taxes and insurance. (a) Prepare a manufacturing overhead flexible budget report for the first quarter. (List variable costs 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 CostsSupervisory SalariesTotal CostsTotal Fixed CostsTotal Variable CostsUtilitiesIndirect MaterialsDepreciationFixed CostsIndirect Labor | ||||
| Total Fixed CostsTotal CostsMaintenanceSupervisory SalariesProperty Taxes and InsuranceIndirect LaborFixed CostsVariable CostsDepreciationUtilitiesTotal Variable CostsIndirect Materials | $ | $ | $ | FUN |
| MaintenanceTotal Fixed CostsTotal CostsUtilitiesDepreciationSupervisory SalariesFixed CostsIndirect LaborProperty Taxes and InsuranceIndirect MaterialsTotal Variable CostsVariable Costs | FUN | |||
| Total Variable CostsUtilitiesVariable CostsMaintenanceTotal CostsProperty Taxes and InsuranceSupervisory SalariesTotal Fixed CostsDepreciationFixed CostsIndirect LaborIndirect Materials | FUN | |||
| Indirect LaborProperty Taxes and InsuranceSupervisory SalariesTotal CostsTotal Fixed CostsUtilitiesIndirect MaterialsMaintenanceFixed CostsTotal Variable CostsVariable CostsDepreciation | FUN | |||
| Property Taxes and InsuranceVariable CostsSupervisory SalariesTotal CostsTotal Variable CostsUtilitiesIndirect MaterialsTotal Fixed CostsDepreciationMaintenanceIndirect LaborFixed Costs | FUN | |||
| Supervisory SalariesTotal CostsTotal Fixed CostsMaintenanceTotal Variable CostsUtilitiesProperty Taxes and InsuranceVariable CostsDepreciationFixed CostsIndirect LaborIndirect Materials | ||||
| DepreciationTotal CostsSupervisory SalariesMaintenanceVariable CostsFixed CostsProperty Taxes and InsuranceUtilitiesIndirect LaborTotal Fixed CostsTotal Variable CostsIndirect Materials | FUN | |||
| MaintenanceTotal Variable CostsProperty Taxes and InsuranceSupervisory SalariesFixed CostsTotal CostsDepreciationTotal Fixed CostsIndirect LaborUtilitiesVariable CostsIndirect Materials | FUN | |||
| Property Taxes and InsuranceSupervisory SalariesIndirect MaterialsIndirect LaborTotal CostsUtilitiesTotal Fixed CostsFixed CostsMaintenanceVariable CostsDepreciationTotal Variable Costs | FUN | |||
| UtilitiesSupervisory SalariesMaintenanceVariable CostsIndirect LaborTotal Variable CostsTotal CostsProperty Taxes and InsuranceDepreciationFixed CostsIndirect MaterialsTotal Fixed Costs | FUN | |||
| Variable CostsProperty Taxes and InsuranceDepreciationIndirect MaterialsFixed CostsIndirect LaborUtilitiesMaintenanceSupervisory SalariesTotal CostsTotal Fixed CostsTotal Variable Costs | FUN | |||
| Indirect MaterialsVariable CostsMaintenanceSupervisory SalariesIndirect LaborTotal Variable CostsDepreciationProperty Taxes and InsuranceTotal CostsFixed CostsTotal Fixed CostsUtilities | $ | $ | $ | FUN |
(b) Prepare a responsibility report for the first quarter.
| 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 MaterialsMaintenanceSupervisory SalariesUtilitiesProperty Taxes and InsuranceDepreciation | $ | $ | $ | FUN | ||
| Supervisory SalariesMaintenanceUtilitiesIndirect MaterialsProperty Taxes and InsuranceDepreciationIndirect Labor | FUN | |||||
| MaintenanceIndirect LaborIndirect MaterialsProperty Taxes and InsuranceSupervisory SalariesUtilitiesDepreciation | FUN | |||||
| Property Taxes and InsuranceUtilitiesMaintenanceSupervisory SalariesDepreciationIndirect MaterialsIndirect Labor | FUN | |||||
| MaintenanceSupervisory SalariesIndirect MaterialsProperty Taxes and InsuranceUtilitiesDepreciationIndirect Labor | FUN | |||||
| $ | $ | $ | FUN | |||
| Click if you would like to Show Work for this question: | Open Show Work | |||||
Exercise 10-14
The Mixing Department manager of Malone Company is able to control all overhead costs except rent, property taxes, and salaries. Budgeted monthly overhead costs for the Mixing Department, 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 MaterialsLubricantsMaintenanceUtilitiesIndirect LaborProperty TaxesRent | $ | $ | $ | FNU |
| SalariesProperty TaxesRentUtilitiesIndirect LaborIndirect MaterialsLubricantsMaintenance | NUF | |||
| Indirect MaterialsLubricantsRentUtilitiesProperty TaxesSalariesMaintenanceIndirect Labor | NFU | |||
| RentLubricantsSalariesUtilitiesIndirect LaborProperty TaxesIndirect MaterialsMaintenance | UFN | |||
| Indirect LaborRentUtilitiesIndirect MaterialsLubricantsMaintenanceProperty TaxesSalaries | FUN | |||
| $ | $ | $ | UFN | |
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Exercise 10-19
The Pletcher Transportation Company uses a responsibility reporting system to measure the performance of its three investment centers: Planes, Taxis, and Limos. Segment performance is measured using a system of responsibility reports and return on investment calculations. The allocation of resources within the company and the segment managers bonuses are based in part on the results shown in these reports. Recently, the company was the victim of a computer virus that deleted portions of the companys accounting records. This was discovered when the current periods responsibility reports were being prepared. The printout of the actual operating results appeared as follows. Determine the missing pieces of information below. (Round intermediate calculations and final answer to 0 decimal 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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Comprehensive Manual Of Internal Audit Practice And Guide The Most Practical Guide To Internal Auditing Practice
Authors: Kibreab K Ftaw
1st Edition
1802277250, 978-1802277258
