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1129/2018 3-2 MyAccountingLab Homework: Chapters 22 and 23wSyed Jaffry Instructor: Abigail Feloney, Kelly Student: Syed Jaffry Flannagan O'Sullivan Assignment: 3-2 MyAccountingLab Date: 01/28/18 Course: ACC-202T3852 Managerial Homework: Chapters 22 and 23 Accounting 18EW3 3. Stenback Recliners manufactures leather recliners and uses exible budgeting and a standard cost system. Stenback allocates overhead based on yards of direct materials. The company's performance report includes the following selected data: 1(Click the icon to view the selected data.) Read the requirements? Requirement 1. Prepare a exible budget based on the actual number of recliners sold. (Round budget amounts per unit to the nearest cent.) Stenback Recliners Flexible Budget Budget Amounts per Unit Actual Units (Recliners) :| Sales Revenue |:| |:| Variable Manufacturing Costs: Direct Materials |:| |:| Direct Labor :l |:] Variable Overhead :] |: Fixed Manufacturing Costs: Fixed Overhead |;| Total Cost of Goods Sold El Gross Prot l;l Requirement 2. Compute the cost variance and the efciency variance for direct materials and for direct labor. For manufacturing overhead, compute the variable overhead cost, variable overhead efciency, xed overhead cost, and xed overhead volume variances. Round to the nearest dollar. Begin with the cost variances. Select the required formulas. compute the cost variances for direct materials and direct labor, and identify whether each variance is favorable (F) or unfavorable (U). (Round your answers to the nearest whole dollar. Abbreviations used: AC = actual cost; AQ = actual quantity; FOH = xed overhead; SC = standard cost; SQ = standard quantity.) Formula Variance (1) | IQI (3) :ll Next compute the efciency variances. Select the required formulas, compute the efciency variances for direct materials and direct labor, and identify whether each variance is favorable (F) or unfavorable (U). (Round your answers to the nearest whole dollar. Abbreviations used: AC = actual cost; A0 = actual quantity; FOH = fixed overhead; SC = standard cost; SQ = standard quantity.) Direct materials cost variance Direct labor cost variance httpszllxlitemprod.pearsoncmg.com/api/v1lprinUacwunting 1/5 1/29/2018 32 MyAcoountingLab Homework: Chapters 22 and 23wSyed Jeffry Formula Variance Direct materials efciency variance = (5) = I:I Direct labor efciency variance = (7) = I (3) I Now compute the variable overhead cost and efciency variances. Select the required formulas, compute the variable overhead cost and efciency variances, and identify whether each variance is favorable (F) or unfavorable (U). (Round your answers to the nearest whole dollar. Abbreviations used: AC = actual cost; A0 = actual quantity; FOH = xed overhead; SC = standard cost; SQ = standard quantity; VOH = variable overhead.) Formula Variance VOH cost variance = = :I (10) VOH efciency variance = I (11) I = I I (12) Now compute the xed overhead cost and volume variances. Select the required formulas, compute the xed overhead cost and volume variances, and identify whether each variance is favorable (F) or unfavorable (U). (Round your answers to the nearest whole dollar. Abbreviations used: AC = actual cost; AQ = actual quantity; FOH = fixed overhead; SC = standard cost; SQ = standard quantity.) Formula Variance FOH cost variance = (13) I:I (14) FOH volume variance = I (15) I06) Requirement 3. Have Stenback's managers done a good job or a poorjob controlling materials, labor, and overhead costs? Why? The variances computed in Requirement 2 suggest that the managers have done a (17) job controlling materials and labor costs. The (18) direct materials cost variance and direct labor efciency variance help offset the (19) direct labor cost variance and direct materials efciency variance. Managers have done a (20) job controlling overhead costs as evidenced by the fact that (21 ) of the overhead variances are (22) Requirement 4. Describe how Stenback's managers can benet from the standard costing system. Standard costing helps managers do the following: (23) 25) 26) (27) AAA N 1: Data Table https:/lxlitemprod.pearsoncmg.oomlapilv1/prinacmunting 2/5 1/2912018 32 MyAccountingLab Homework: Chapters 22 and 23wSyed Jaffry Static Budget Actual ReSults (1,000 recliners) (980 recliners) Sales (1,000 recliners x $ 515 each) $ 515,000 (980 recliners x S 480 each) $ 470,400 Variable Manufacturing Costs: Direct Materials (6,000 yds. @ $ 8.60/yd.) 51,600 (6,143 yds. @ $ 8.40 Iyd.) 51,601 Direct Labor (10,000 DLHr @ $ 9.30 / DLHr) 93,000 (9,600 DLHr@ $ 9.50 I DLHr) 91,200 Variable Overhead (6,000 yds. @ $ 5.20 / yd.) 31,200 (6,143 yds. @ $ 6.60 lyd.) 40,544 Fixed Manufacturing Costs: Fixed Overhead Total Cost of Goods Sold 236'400 245345 Gross Prot $ 278,600 $ 224,455 2: Requirements 1. Prepare a exible budget based on the actual number of recliners sold. 2. Compute the cost variance and the efciency variance for direct materials and for direct labor. For manufacturing overhead, compute the variable overhead cost, variable overhead efciency, xed overhead cost, and xed overhead volume variances. Round to the nearest dollar. 3. Have Stenback's managers done a good job or a poorjob controlling materials, labor, and overhead costs? Why? 4. Describe how Stenback's managers can benefit from the standard costing system. (1) O 0 (AQ -SQ) x80 (2) O Q (AC SC) x AQ O Actual FOH Allocated FOH CI F 0 (AC - SC) x SO 0 Actual FOH - Budgeted FOH O U 0 (AQ - SO) x AC O Budgeted FOH - Allocated FOH (3) C} C) (AQ - SO) x SC (4) O {:3 (AC - SC) x AQ Q Actual FOH - Allocated FOH O F 0 (AC - SC) x SO 0 Actual FOH - Budgeted FOH O U 0 (AQ - SO) x AC 0 Budgeted FOH - Allocated FOH (5) O 0 (AQ - so) x so (a) C} 0 (AC - SC) x AQ C} Actual FOH - Allocated FOH O F 0 (AC - SC) x SQ O Actual FOH - Budgeted FOH O U Ci (AQ - SQ) x AC O Budgeted FOH - Allocated FOH (7) Ci 0 (AQ - SQ) KSC (8) O (9) O 0 (AC - SC) x A0 0 Actual FOH - Allocated FOH O F C} Actual VOH - (AC x SQ) 0 (AC - SC) x SO 0 Actual FOH - Budgeted FOH O U 0 Actual VOH - (SO x A0) (:1 (AQ - SO) x AC O Budgeted FOH - Allocated FOH httpszllxlitemprod.pearsoncmg.comlapilv1[print/accounting 3/5 112912018 32 MyAccountingLab Homework: Chapters 22 and 23Syed Jaffry (10) O (11) C) C) (AQ-SQ)X SC (12) O C) F C) (AC - SC) x AQ CI Actual FOH - Allocated FOH O F C) U 0 (AC - SO) x SQ Cl Actual FOH - Budgeted FOH C) U 0 (AQ - SQ) x AC 0 Budgeted FOH - Allocated FOH (13) C) O (AC1 - SQ) x SC (14) Cl C) (AC - SC) x AQ Cl Actual FOH - Allocated FOH CI F C) (AC - SC) x SQ C} Actual FOH - Budgeted FOH CI U 0 (AQ - SO) x AC G Budgeted FOH - Allocated FOH (15) C) O (AQ-SQ)xSC (16) CI (17) C) good Cl (AC - SC) X AQ Cl Actual FOH - Allocated FOH CI F C) poor C) (AC - SC) x SQ 0 Actual FOH - Budgeted FOH O U 0 reasonable 0 (AQ - SQ) x AC G Budgeted FOH - Allocated FOH (18) O favorable (19) Cl favorable (20) 0 good (21) 0 all C) unfavorable Q unfavorable 0 poor C) none {:3 reasonable (:3 some (22) Cl favorable O unfavorable (23) C) 0 Identify performance standards C) Create new products 0 Increase production levels Cl Decrease accounting costs 0 Increase sales volume 0 Develop more efcient production methods 0 Prepare the master budget 0 Set sales prices of products and services C) Set target levels of performance for exible budgets (24) Cl 0 Identify performance standards O Create new products 0 Increase production levels C) Decrease accounting costs 0 Increase sales volume C) Develop more efcient production methods 0 Prepare the master budget C) Set sales prices of products and services Cl Set target levels of performance for exible budgets (25) C) 0 Identify performance standards 0 Create new products 0 Increase production levels 0 Decrease accounting costs 0 Increase sales volume 0 Develop more efcient production methods 0 Prepare the master budget C] Set sales prices of products and services Cl Set target levels of performance for exible budgets httpszllxlitemprod.pearsoncmglcomlapi/w [print/acwunting 4l5 1/29/2018 32 MyAccountingLab Homework: Chapters 22 and 23wSyed Jaffry (26) O 0 Identify performance standards 0 Create new products Cl Increase production levels C) Decrease accounting costs 0 Increase sales volume O Develop more efcient production methods 0 Prepare the master budget 0 Set sales prices of products and services 0 Set target levels of performance for exible budgets (27) C) 0 Identify performance standards 0 Create new products 0 Increase production levels C) Decrease accounting costs 0 Increase sales volume 0 Develop more efcient production methods 0 Prepare the master budget C) Set sales prices of products and services 0 Set target levels of performance for exible budgets httpszllxlitemprod.pearsoncmg.com/api/v1/print/acct3unting 5/5