Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Hi guys. I really need this to be looked over and corrected. Here we are going through problems 10-12. I really need help and to

image text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribed

Hi guys. I really need this to be looked over and corrected. Here we are going through problems 10-12. I really need help and to make sure it is right. I have provided all the data and my work. If it needs to be fixed, please do fix it, but I really need assistance. Thank you so much. The blue is the data and the green is what I got.

image text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribed
The Course Project consists of 12 Requirements for you to complete. The Course Project is due at the end of Week 9. See the Modles section for due date information. All of the information you need to complete the Course Project is located in this Workbook. . There are thirteen worksheets in the workbook you will need to complete. . A list of transactions . A Grading Rubric to help explain what is expected. Quivers Inc. began operations on January 1 of the current year. The company produces eight-ounce bottles of jet wax called Ophelia Shine. The wax is sold wholesale in 12-bottle cases for $100 per case. There is a selling commission of $20 per case . The January direct materials , direct labor, and factory overhead costs are as follows: DIRECT MATERIALS Cost Unit Cost Direct Materials Behavior per Case per Unit Cost per Case Cream base Variable 100 Oz. $0.02 5 2.00 Natural oils Variable 30 oz. 130 9.00 Bottle (8-oz) Variable 12 bottles 0.50 500 $17.00 DIRECT LABOR Cost Time Labor Rate Direct Labor Department Behavior per Case per Hour Cost per Case Mixing Variable 20 min. $ 18.00 $6.00 Filling Variable 5 14.40 1.20 25 min. $7 20 FACTORY OVERHEAD Cost Behavior Total Cost Utilities Mixed 500 Facility lease Fixed 14,000 Equipment depreciation Fixed 4,300 Supplies Fixed 660 $19,560Part A. Break-even Analysis The management of Quivers Inc. wants to determine the number of cases required to break even per month. The utilities cost, which is part of factory overhead , is a mixed cost. The following information was gathered from the first six months of operation regarding this cost: Utility Total Month Case Production Cost January 500 600.00 February 800 660.00 March 1,200 740.00 April 1,100 720.00 May 950 690.00 June 1,025 705.00 Instructions 1. Determine the fixed and variable portion of the utility cost using the high-low 2. Determine the contrinution margin per case. 3. Determine the fixed costs per month, including the utility fixed cost from question (1). 4. Determine the break-even num ber of cases per monthPart B. Budgets During July of the current year , the management of Quivers Inc. asked the controller, Robin, to prepare August manufacturing and income statement budgets. Demand was expected to be 1,500 cases of jet wax at $100 per case for August. Inventory planning information is provided as follows : Finished Goods Inventory Cases Cost Estimated finished goods inventory, Aug 300 # # # # # Desired finished goods inventory, August : 175 # # # # # Materials Inventory Cream Base (oz.) Oils (oz.) Bottels (oz.) Estimated materials inventory, August 1 250 290 600 Desired materials inventory, August 31 1,000 360 240 There was negligible work in process inventory assumed for either the beginning or end of the month; thus, none was assumed. In addition, there was no change in the cost per unit or estimated units per case operating data from January. Instructions 5.Prepare the August production budget. 6.Prepare the August direct materials purchases budget. 7.Prepare the August direct labor cost budget. Round the hours required for production to the nearest hour. 8.Prepare the August factory overhead cost budget. 9.Prepare the August budgeted income statement, including selling expenses.Part C. August Variance Analysis During September of the current year, Robin was asked to perform variance analyses for August. The January operating data provided the standard prices, rates, times, and quantities per case. There were 1,500 actual cases produced during August, which was 250 more cases than planned at the beginning of the month. Actual data for August were as follows: Actual Direct Actual Direct Material Materials Price Materials per Unit Quantity per Case Cream Base $ 0.160 102 (oz.) Natural Oils 0.32 31 (oz.) Bottles 0.42 12.5 Actual Direct Activity Actual Direct Labor Time Labor Rate per Case (minutes) Mixing 18.20 19.50 Filling 14.00 5.60 Actual Variable Overhead $ 305.00 Normal Volume (Cases) 1,600The prices of the materials were different from standard due to fluctuations in market prices. The standard quantity of materials used per case was an ideal standard. The Mixing Department used a higher grade labor classification during the month, thus causing the actual labor rate to exceed standard. The Filling Department used a lower grade labor classification during the month, thus causing the actual labor rate to be less than standard. Intruction S 10. Determine and interpret the direct materials price and quantity variances for the three materials. 11. Determine and interpret the direct labor rate and time variances for the two departments. Round hours to the nearest hour. 12 . Determine and interpret the factory overhead controllable variance. 13.Determine and interpret the factory overhead volume variance. Assess why are the standard direct labor and direct materials costs in the calculations for parts (10) and (11) based on the actual 1,500-case production volume rather than the planned 1,375 cases of production used in the budgets for questions (6) and (7)?Requirement #10: Determine the direct materials variance. Direct Materials Price Variance Actual Quantity Cream Base Natural Oils Bottles Cream BaseNatural Oil: Bottles Cases 1,500 1,500 1,500 Actual Price $0.16 $0.32 $0.42 Amount 102 31 12.5 Standard Price $0.02 $0.30 $0.50 Total 153,000 46,500 18,750 Difference $0.14 $0.02 $0.08 * Actual Quantity (Units) 153,000 46,500 18,750 Direct Materials Price Variance $ 21,420.00 $ 930.00 $ 1,500.00 Decision Unfavorable Unfavorable Favorable Analysis The direct material price variances were caused by the fluctuation of market prices. The prices of Natural Oils has increased in comparision to what the standard price was and decreased for the cream base and bottle products. Direct Materials Quantity Variance Standard Quantity Cream Base Natural Oils Bottles Cream BaseNatural Oil: Bottles Cases 1,500 1,500 1,500 Actual Quantiy 153,000 46,500 18,750 Amount 100 30 12.0 Standard Quantity 150,000 45,000 18,000 Total 150,000 45,000 18,000 Difference 3,000 1,500 750 * Standard Price $ 0.02 $ 0.30 $ 0.50 Direct Malenais Quanmy 60.00 $ 450.00 $ 375.00 Decision Unfavorable Unfavorable Unfavorable * Analysis All of the direct materials quantity variances are unfavorabe. This is because of the use of a lower quality material or some sort of loss of it.Requirement #11: Determine the direct labor variance. Direct Labor Rate Variance Actual Time Mixing Filling Department Department Mixing Filling Actual Rate $18.20 $14.00 Units 1,500 1,500 Standard Rate $18.00 $14.40 Minutes 19.5 5.6 Difference $0.20 ($0.40) Hours 60 60 * Actual Time (Hours) 488.0 140.0 Total 488.0 140.0 Direct Labor Rate Variance $97.60 $56.001 Decision Unfavorable Favorable Analysis The mixing department's direct labor rate variance is unfavorable because of their utilization of a higher grade abor, which costs an extra $0.20 per hour. The filling department's direct labor rate variance shows as favorable due to their use of lower grade labor, hence why they are saving $0.40 per hour. Direct Labor Time Variance Standard Time Mixing Filling Department Department Mixing Filling Actual Time 488.0 140.0 Units 1,500 1,500 Standard Time 500 125 Minutes 20.0 5.0 Difference (12.0) 15 Hours 60 60 * Standard Rate $18.00 $14.40 Total 500.0 125.0 Direct Labor Time Variance $216.00 $216.00 Decision Favorable UnfavorableRequirement #12: Determine the factory overhead variance. Factory Overhead Controllable Variance Variance overhead (utility cost) at standard cost Actual variable overhead 305.00 Cases 1,500 Variable overhead at standard cost 300.00 Total fixed factory overhec $ 0.20 Factory overhead controllable $5.00 $ 300.00 variance Total Decision Unfavorable Factory Overhead Volume Variance Fixed factory overhead rate Normal volume (cases) 1,600 Cases 1,600 Actual volume (cases) 1,500 Total fixed factory overhec $ 19,460 Difference 100.0 Total $ 12. 16 12.1625 * Fixed factory overhead rate 12.16 12.1625 $1,216.25 Decision Unfavorable Analysis Ine planned 1,3/5 cases of production used in The budgets for questions #6 and #7 were developed in the heninning in the month of August Thece

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

Financial Accounting with International Financial Reporting Standards

Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso

4th edition

1119504309, 1-119-50340-8, 9781119503408 , 978-1119504306

More Books

Students also viewed these Accounting questions

Question

How flying airoplane?

Answered: 1 week ago

Question

5. Give examples of binary thinking.

Answered: 1 week ago