Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Joe has just got his accounting degree and started working for Lady G Bakery Inc., 2. Suppose Joe's boss Mrs. Gutfreund is in the process

image text in transcribed

Joe has just got his accounting degree and started working for Lady G Bakery Inc., 2. Suppose Joe's boss Mrs. Gutfreund is in the process of evaluating how a small business that is locally known for their delicious banana pudding cups. the company performed in terms of generating revenues and controlling o Their best-seller is the 16oz cup. The company's relevant range of production is Mrs. Gutfreund would like to compare the actual income statement with between 500,000 and 800,000 cups a year. Within the relevant range, variable costs planning budget income statement. Could you use the variance analysis f per cup and total annual fixed costs remain constant. The company has the following data from its standard cost system. compare the actual income statement with the flexible budget ince statement instead? Your explanat double spaced with a 12 -font size. 3. Prepare a very detailed manufacturing cost variance analysis (e.g., calcu the material price variance and quantity variance; the labor rate variance efficiency variance; the variable overhead rate variance and efficie variance; and the fixed manufacturing overhead budget variance and vol variance). All variances should be marked with eith or "U" for unfavorable. Show your calculations. Required: 1. Prepare a detailed income statement variance analysis using the contribution 4. Could you reconcile the spending variances in Part 1 with manufactu approach income statement for the year (i.e., compare the actual income cost variances in Part 3? For example, how is the amount of spend flexible budget income statement with the planning budget income variance for direct labor in Part 1 explained by the amounts of the two di labor variances in Part 3 ? Excluding your quantitative analysis if The planning budget income statement is based on the expectation of selling in the income statement analysis. A template for answering this question is your explan 12 -font size. 580,000 cups of banana pudding. The budgeted selling price is $10 per cup. given below. All variances should be marked with either an "F" for favorable or "U" for unfavorable. 5. While the demand for their banana pudding cups is robust, Mrs. Gutfreun For planning and control purposes, the company relies on its standard costs to really concerned about the challenging situation with ever-increasing Is derive their budgeted costs per cup of banana pudding. For example, the cost of costs. Could you help her evaluate the company's performance in control direct materials reported on the planning budget income statement is calculated as direct labor costs by interpreting relevant variances from Part 1 and Par $5.00 per cup times 580,000 cups, which is $2,900,000. Also, the denominator Can you offer her any suggestions to minimize the negative impact of labor costs on profitability? Excluding your quantitative analysis if level of activity is calculated as 0.1 direct labor hour per cup times 580,000 cups, 12-font size. which is 58,000 direct labor hours. The company actually produced and sold 660,000 cups at $11.20 per cup this year. The company does not have a beginning or ending raw materials inventory, because it uses all raw materials purchased. Also, the company does not have a beginning or ending finished goods inventory. Everything produced in the year is sold in that same year

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 Crime Investigation And Control

Authors: K. H. Spencer Pickett, Jennifer M. Pickett

1st Edition

0471203351, 9780471203353

More Books

Students also viewed these Accounting questions

Question

What are the major disadvantages of a mail survey?

Answered: 1 week ago

Question

Define procedural justice. How does that relate to unions?

Answered: 1 week ago