Help with number 5 a&b. thank you will give an outstanding review!
3) With respect to direct labor, calculate the following relating to Phoenix Company's operating results for the year. a) Assume Phoenix Company concluded it spent an average of 0.90 hours (Actual) to complete one nished good unit. How many hours of direct labor did Phoenix Company have for the year? Hint: Multiply the number of units produced by 0.90 hours. Round to the nearest whole number of hours. Use this amount as actual hours, AH, in the calculation of DL variances below. 19,000*.90 =17 ,100 hours b) Using the standard cost card (1 above) and the exible budget, how many hours should Phoenix Company have used for production during the year? Round to the nearest whole number of hours. Use this amount as standard hours, SH, in the calculation of DL variances below. 124* 19,000 23,560 hours c) What was the company's average direct labor wage rate? Hint: Calculate as direct labor expense divided by total direct labor hours. Show 2 decimals. Use this as standard rate, SR, in the calculation of DL variances below. 240000117100= $14.04 5) For fixed overhead, calculate how much fixed overhead would have been applied. Remember that overhead (fixed and variable) is applied based on a standard or predetermined rate for a budgeted level of activity. a) Calculate portion of the predetermined rate relating to fixed overhead using the table below using budgeted overhead costs and standard hours of labor expected for "PLANNED/BUDGETED" production level. Fixed Overhead Pre-Determined Rate Add Depreciation-Plant equipment, fixed Budgeted Fixed Overhead Costs utilities, and plant management salaries from connect Budgeted DL hours Calculate: budgeted # of units (connect) x standard hours per unit in 1 Predetermined Fixed OH Rate Calculate: Costs divided by hours b) When a manufacturing company uses standard costing, its overhead is applied based on STANDARD HOURS for the actual number of units produced. For Phoenix Company, this is the standard hours calculated in 3b above. Use these standard hours to calculate the amount of fixed overhead applied below. Standard hours from 3b above x predetermined rate from 5a Total Fixed OH appliedPhoenix Company's 2019 master budget included the following fixed budget report. It is based on an expected production and sales volume of 16,000 units. PHOENIX COMPANY Fixed Budget Report For Year Ended December 31, 2019 Sales $3, 600, 000 Cost of goods sold Direct materials $960, 000 Direct labor 240, 000 Machinery repairs (variable cost) 64, 000 Depreciation-Plant equipment (straight-line) 315, 000 Utilities ($48,000 is variable) 198, 000 Plant management salaries 230,000 2, 007,090 Gross profit 1, 593, 090 Selling expenses Packaging 80, 000 Shipping 112, 000 Sales salary ( fixed annual amount) 260, 000 452, 090 General and administrative expenses Advertising expense 133, 000 Salaries 251, 000 Entertainment expense 100,000 484, 090 Income from operations $ 657, 090Phoenix Company's actual income statement for 2019 follows. PHOENIX COMPANY Statement of Income from Operations For Year Ended December 31, 2019 Sales (19,000 units) $4, 338, 000 Cost of goods sold Direct materials $1, 156, 000 Direct labor 293, 000 Machinery repairs (variable cost) 67,000 Depreciation-Plant equipment (straight-line) 315, 000 Utilities ( fixed cost is $147,500) 203, 750 Plant management salaries 240, 000 2, 274, 750 Gross profit 2, 063, 250 Selling expenses Packaging 92, 000 Shipping 126, 000 Sales salary (annual) 276, 000 494, 090 General and administrative expenses Advertising expense 141, 000 Salaries 251, 000 Entertainment expense 103, 000 495, 000 Income from operations $1, 074, 250
