Managerial Accounting Fall 2023 Quad A Team Project and Oral Presentation Variance Analysis Your company, Global Distributing, Inc., has won funding from Shark Tank. This company manufactures one product. Its variable manufacturing overhead is applied to production based on direct labor-hours and the standards per unit are as follows: Direct materials per unit: 10 pounds at $25 per pound Direct labor per unit: 5 hours at $20 per hour Variable overhead: 5 hours at $8 per hour Budgeted Selling & Administrative Costs are as follows: Budgeted Fixed advertising expenses: $5000 Budgeted Fixed sales expenses: $6500 Budgeted Fixed shipping expenses: $9500 The planning budget for July 2023 was based on producing and selling 12000 units. However, during July, the company actually produced and sold 13000 units, at a selling price of $500 per unit, and incurred the following costs: (a) Purchased 135,000 pounds of direct materials at a cost of $24 per pound. All of this material was used in production. (b) Direct laborers worked 64,000 hours at a rate of $22.00 per hour (c) Total variable manufacturing overhead for the month was $540,000 (d) ACTUAL fixed costs: Total fixed advertising expenses were $7,000. Total fixed sales expenses were $8,000. Total fixed shipping expenses were $8,900. Answer the following, showing all formulas and computations: Standard Cost Card: (1) Prepare a Standard Cost Card for one unit of the product. What would be the breakeven point (in units) for this product, given the Standard Cost Card, the Budgeted Fixed expenses, and a selling price of $500/unit? Direct Material Computations: (2) What direct materials cost would be included in the companys planning budget for July? (3) What direct materials cost would be included in the companys flexible budget for July? (4) What is the materials spending variance for July? Favorable or Unfavorable? (5) What is the materials price variance for July? Favorable or Unfavorable? (6) What is the materials quantity variance for July? Favorable or Unfavorable?

Direct Labor Computations: (7) What direct labor cost would be included in the companys planning budget for July? (8) What direct labor cost would be included in the companys flexible budget for July? (9) What is the labor spending variance for July? Favorable or Unfavorable? (10) What is the labor efficiency variance for July? Favorable or Unfavorable? (11) What is the labor rate variance for July? Favorable or Unfavorable? Manufacturing Overhead Computations: (12) What variable manufacturing overhead cost would be included in the companys planning budget for July? (13) What variable manufacturing overhead cost would be included in the companys flexible budget for July? (14) What is the variable overhead spending variance for July? Favorable or Unfavorable? (15) What is the variable overhead rate variance for July? Favorable or Unfavorable? (16) What is the variable overhead efficiency variance for July? Favorable or Unfavorable? Three Budgets (17) Prepare three budgets: a Planning Budget at 12000 units. A Flexible Budget at 13000 units. An Actual Results Budget at 13000. Use only the data given above. Variance analysis (18 & 19): (18) Using only the data given in the problem above, prepare a variance analysis report similar to the one shown on page 419 in the text (Actual Results versus Flexible). (19) Overall, analyze and rate the entire job for Global Dynamics for the month of July (i.e. great job, good job, average, poor job, etc.) for each of the six main variances (list and label the six main variances and rate each). You should do this by listing the six main variances that are solutions above to #5,6,10,11,15,16 and the formulas can be found on pages 409, 412, 414 in the textbook). Using responsibility accounting, describe the responsible manager for each of the six variances (production manager, purchasing manager, personnel manager, etc.), given what we discussed in class. Do you think that Shark Tank is satisfied with the performance of your company?