Question
Northern Illinois Manufacturing reported the following results from last years operations: Sales (1,325,000 units) $ 15,900,000 Variable Expenses: Direct Materials 1,801,800 Direct Labor 5,450,580 Manufacturing
Northern Illinois Manufacturing reported the following results from last years operations:
| Sales (1,325,000 units) |
| $ 15,900,000 |
| Variable Expenses: |
|
|
| Direct Materials | 1,801,800 |
|
| Direct Labor | 5,450,580 |
|
| Manufacturing OH | 2,053,750 |
|
| S & A | 2,112,000 |
|
| Total Variable |
| 11,418,130 |
| Contribution Margin |
| 4,481,870 |
| Fixed Expenses |
|
|
| Manufacturing OH | 757,700 |
|
| S & A | 1,136,800 |
|
| Total Fixed |
| 1,894,500 |
| Net Operating Income |
| $ 2,587,370 |
Total operating assets at the end of the year are $20,700,000. The total operating assets at the end of last year was $19,800,000.
The company tracks its internal business process performance and reports the following data for this year:
| Inspection time | 0.6 days |
| Wait time (from order to start of production) | 14.5 days |
| Process time | 3.7 days |
| Move time | 1.7 days |
| Queue time | 4.3 days |
Budgeted information for Northern Illinois is based on the following information:
| Sales Units | 1,300,000 |
| Sales Price | $12 per unit |
| Direct materials | $1.50 per unit |
| Direct labor | $3.60 per unit |
| Variable OH | $1.50 per unit |
| Variable S & A | $1.60 per unit |
| Fixed OH | $750,000 |
| Fixed S & A | $1,125,000 |
The following standard cost card is for the variable manufacturing for one unit of production:
|
| Std Quantity | Std Price | Std Cost |
| Direct materials | 2.00 lbs | 0.75 per pound | 1.50 |
| Direct labor | 0.20 hrs | 18.00 per hour | 3.60 |
| Variable OH |
| 1.50 per unit | 1.50 |
During the year, the company purchased and used 2,772,000 pounds of material. The company worked 302,810 hours at a rate of $18 per hour.
The companys minimum return is 10%.
This assignment requires an Excel spreadsheet. Please prepare the items in the order given with the number of the requirement or your Excel spreadsheet.
- Prepare the flexible budget performance report for last year. (See exhibit 9-6 in the text)
- Determine the material price and quantity variances.
- Determine the direct labor price and quantity variances.
- Determine the variable overhead spending and efficiency variances.
- Determine the ROI and RI for last year.
- Determine last years throughput time, MCE, and delivery cycle time.
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