Exercise 9-2 Prepare a Report Showing Revenue and Spending Variances (LO9-2] Quilcene Oysteria farms and sells oysters in the Pacific Northwest. The company harvested and sold 7,700 pounds of oysters in August. The company's flexible budget for August appears below: Quilcene Oysteria Flexible Budget For the Month Ended August 31 Actual pounds (9) 7,700 $ 31,955 Revenue ($4.159) Expenses: Packing supplies ($0.309) Oyster bed maintenance ($3,100) Wages and salaries ($2,600 + $0.409) Shipping ($0.659) Utilities ($1,240) Other ($480 + $0.019) Total expense Net operating income 2,310 3,100 5,680 5,005 1,240 557 17,892 $ 14,063 The actual results for August appear below: Quilcene Oysteria Income Statement For the Month Ended August 31 Actual pounds 7,700 $ 27,300 Revenue Expenses : Packing supplies Oyster bed maintenance Wages and salaries Shipping Utilities Other Total expense Net operating income 2,480 2,960 6,090 4,735 1,050 1,177 18, 492 $ 8,808 Required: Calculate the company's revenue and spending variances for August. (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.) Quilcene Oysteria Revenue and Spending Variances For the Month Ended August 31 Revenue Expenses: Packing supplies Oyster bed maintenance Wages and salaries Shipping Utilities Other Total expense Net operating income Exercise 9-7 Planning Budget (LO9-1) Lavage Rapide is a Canadian company that owns and operates a large automatic car wash facility near Montreal. The following table provides data concerning the company's costs: Fixed Cost per Month $1,100 Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses Cost per Car Washed $ 0.70 $ 0.08 $ 0.15 $ 0.40 $ 4,800 $ 8,300 $2,100 $1,600 $ 0.02 For example, electricity costs are $1,100 per month plus $0.08 per car washed. The company expects to wash 8,100 cars in August and to collect an average of $6.80 per car washed. Required: Prepare the company's planning budget for August. Lavage Rapide Planning Budget For the Month Ended August 31 Revenue Expenses: Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses Total expense Net operating income Exercise 9-8 Flexible Budget (LO9-1) Lavage Rapide is a Canadian company that owns and operates a large automatic car wash facility near Montreal. The following table provides data concerning the company's costs: Cost per Fixed Cost per Month $1,400 Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses Car Washed $ 0.40 $ 0.08 $ 0.25 $ 0.40 $4,700 $8,300 $1,900 $1,500 $ 0.02 For example, electricity costs are $1,400 per month plus $0.08 per car washed. The company actually washed 8,500 cars in August and collected an average of $6.70 per car washed. Required: Prepare the company's flexible budget for August. Lavage Rapide Flexible Budget For the Month Ended August 31 Revenue Expenses: Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses Total expense Net operating income Exercise 9-10 Direct Labor and Variable Manufacturing Overhead Variances (LO9-5, LO9-6) Erie Company manufactures a mobile fitness device called the Jogging Mate. The company uses standards to control its costs. The labor standards that have been set for one Jogging Mate are as follows: Standard Hours 30 minutes Standard Rate per Hour $5.80 Standard Cost $2.90 During August, 10,340 hours of direct labor time were needed to make 19,300 units of the Jogging Mate. The direct labor cost totaled $57,904 for the month. Required: 1. What is the standard labor-hours allowed (SH) to makes 19,300 Jogging Mates? 2. What is the standard labor cost allowed (SH SR) to make 19,300 Jogging Mates? 3. What is the labor spending variance? 4. What is the labor rate variance and the labor efficiency variance? 5. The budgeted variable manufacturing overhead rate is $4.70 per direct labor-hour. During August, the company incurred $55,836 in variable manufacturing overhead cost. Compute the variable overhead rate and efficiency variances for the month. (For requirements 3 through 5, 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. Do not round intermediate calculations.) 1. Standard labor-hours allowed 2. Standard labor cost allowed 3. Labor spending variance 4. Labor rate variance Labor efficiency variance 5 Variable overhead rate variance Variable overhead efficiency variance Exercise 9-13 Direct Materials and Direct Labor Variances (LO9-4, LO9-5) Huron Company produces a commercial cleaning compound known as Zoom. The direct materials and direct labor standards for one unit of Zoom are given below: Standard Quantity or Hours 7.40 pounds 0.90 hours Standard Price or Rate $2.30 per pound $8.50 per hour Standard Cost $17.02 $ 7.65 Direct materials Direct labor During the most recent month, the following activity was recorded: a. Twenty one thousand five hundred pounds of material were purchased at a cost of $2.10 per pound. b. All of the material purchased was used to produce 2,500 units of Zoom. c. 2,000 hours of direct labor time were recorded at a total labor cost of $21,000. Required: 1. Compute the materials price and quantity variances for the month. 2. Compute the labor rate and efficiency variances for the month. (For all requirements, 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. Round your intermediate calculations to the nearest whole dollar.) 1. Materials price variance Materials quantity variance Labor rate variance Labor efficiency variance 2. Exercise 9-14 Direct Materials Variances (LO9-4] Huron Company produces a commercial cleaning compound known as Zoom. The direct materials and direct labor standards for one unit of Zoom are given below: Standard Quantity or Hours 5.50 pounds 0.50 hours Direct materials Direct labor Standard Price or Rate $2.50 per pound $6.50 per hour Standard Cost $13.75 $ 3.25 During the most recent month, the following activity was recorded: a. Ten thousand six hundred pounds of material were purchased at a cost of $2.40 per pound. b. The company produced only 1,060 units, using 9,540 pounds of material. (The rest of the material purchased remained in raw materials inventory.) c. 630 hours of direct labor time were recorded at a total labor cost of $7,560. Required: Compute the materials price and quantity variances for the month. (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.) Materials price variance Materials quantity variance Exercise 9-16 Flexible Budgets in a Cost Center (LO9-1, LO9-2] Packaging Solutions Corporation manufactures and sells a wide variety of packaging products. Performance reports are prepared monthly for each department. The planning budget and flexible budget for the Production Department are based on the following formulas, where is the number of labor-hours worked in a month: Direct labor Indirect labor Utilities Supplies Equipment depreciation Factory rent Property taxes Factory administration Cost Formulas $16.409 $4,400 + $2.000 $5,000 + $0.609 $1,600 + $0.309 $18,200 + $3.000 $8,000 $2,800 $13,500 + $0.809 The Production Department planned to work 4,300 labor-hours in March; however, it actually worked 4,100 labor-hours during the month. Its actual costs incurred in March are listed below: Direct labor Indirect labor Utilities Supplies Equipment depreciation Factory rent Property taxes Factory administration Actual Cost Incurred in March $ 68,840 $ 12,180 $ 7,970 $ 3,100 $ 30,500 $ 8,400 $ 2,800 $ 16,170 Required: 1. Prepare the Production Department's planning budget for the month. 2. Prepare the Production Department's flexible budget for the month. 3. Calculate the spending variances for all expense items. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare the Production Department's planning budget for the month. Packaging Solutions Corporation Production Department Planning Budget For the Month Ended March 31 Direct labor Indirect labor Utilities Supplies Equipment depreciation Factory rent Property taxes Factory administration Total expense Required 1 Required 2 > Exercise 9-16 Flexible Budgets in a Cost Center (LO9-1, LO9-2] Packaging Solutions Corporation manufactures and sells a wide variety of packaging products. Performance reports are prepared monthly for each department. The planning budget and flexible budget for the Production Department are based on the following formulas, where is the number of labor-hours worked in a month: Direct labor Indirect labor Utilities Supplies Equipment depreciation Factory rent Property taxes Factory administration Cost Formulas $16.40g $4,400 + $2.009 $5,000 + $0.609 $1,600 + $0.30g $18,200 + $3.009 $8,000 $2,800 $13,500 + $0.809 The Production Department planned to work 4,300 labor-hours in March; however, it actually worked 4,100 labor-hours during the month. Its actual costs incurred in March are listed below: Direct labor Indirect labor Utilities Supplies Equipment depreciation Factory rent Property taxes Factory administration Actual Cost Incurred in March $ 68,840 $ 12,180 $ 7,970 $ 3,100 $ 30,500 $ 8,400 $ 2,800 $ 16,170 Required: 1. Prepare the Production Department's planning budget for the month. 2. Prepare the Production Department's flexible budget for the month. 3. Calculate the spending variances for all expense items. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare the Production Department's flexible budget for the month. Packaging Solutions Corporation Production Department Flexible Budget For the Month Ended March 31 Direct labor Indirect labor Utilities Supplies Equipment depreciation Factory rent Property taxes Factory administration Total expense Exercise 9-16 Flexible Budgets in a Cost Center (LO9-1, LO9-2] Packaging Solutions Corporation manufactures and sells a wide variety of packaging products. Performance reports are prepared monthly for each department. The planning budget and flexible budget for the Production Department are based on the following formulas, where is the number of labor-hours worked in a month: Direct labor Indirect labor Utilities Supplies Equipment depreciation Factory rent Property taxes Factory administration Cost Formulas $16.409 $4,400 + $ 2.000 $5,000 + $0.609 $1,600 + $0.309 $18,200 + $3.000 $8,000 $2,800 $13,500 + $0.809 The Production Department planned to work 4,300 labor-hours in March; however, it actually worked 4,100 labor-hours during the month. Its actual costs incurred in March are listed below: Direct labor Indirect labor Utilities Supplies Equipment depreciation Factory rent Property taxes Factory administration Actual Cost Incurred in March $ 68,840 $ 12,180 $ 7,970 $ 3, 100 $ 30,500 $ 8,400 $ 2,800 $ 16,170 Required: 1. Prepare the Production Department's planning budget for the month. 2. Prepare the Production Department's flexible budget for the month. 3. Calculate the spending variances for all expense items. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Calculate the spending variances for all expense items. (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.) Packaging Solutions Corporation Spending Variances For the Month Ended March 31 Actual Results Spending Variances 4.100 Flexible Budget Labor-hours $ Direct labor Indirect labor 68,840 12,180 Utilities 7,970 3,100 30,500 8.400 Supplies Equipment depreciation Factory rent Property taxes Factory administration Total expense 2,800 16,170 149,960 $