Puget Sound Divers is a company that provides diving services such as underwater ship repairs to clients in the Puget Sound area. The companys planning budget for May appears below: Puget Sound Divers Planning Budget For the Month Ended May 31 Budgeted diving-hours (q) 100 Revenue ($365.00q) $ 36,500 Expenses: Wages and salaries ($8,000 + $125.00q) 20,500 Supplies ($3.00q) 300 Equipment rental ($1,800 + $32.00q) 5,000 Insurance ($3,400) 3,400 Miscellaneous ($630 + $1.80q) 810 Total expense 30,010 Net
Wallis Company manufactures only one product and uses a standard cost system, The company uses a predetermined plantwide overhead rate that relies on direct labor-hours as the allocation base. All of the compary's manufacturing overhead costs are fixed-it does not incur any variable manufacturing overhead costs. The predetermined overhead rate is based on a cost formula that estimated $2,880,000 of fixed manufacturing overhead for an estimated allocation base of 288,000 direct labor-hours. Wallis does not maintain any beginning or ending work in process inventory. The company's beginning balance sheet is as follows: The company's standard cost card for its only product is as follows: During the year Wallis completed the following transactions: a. Purchased (with cash) 230,000 pounds of raw material at a price of $29.50 per pound. b. Added 215,000 pounds of raw material to work in process to produce 95,000 units. c. Assigned direct labor costs to work in process. The direct laborers (who were paid in cash) worked 245,000 hours at an average cost of $16.00 per hour to manufacture 95,000 units. d. Applied fixed overhead to work in process inventory using the predetermined overhead rate multiplied by the number of direct labor-hours allowed to manufacture 95,000 units. Actual fixed overhead costs for the year were $2,740,000. Of this total, $1,340,000 related to items such as insurance, utilities, and salaried indirect laborers that were all paid in cash and $1,400,000 related to depreciation of equipment. e. Transferred 95,000 units from work in process to finished goods. f. Sold (for cash) 92,000 units to customers at a price of $170 per unit. 9. Transferred the standard cost associated with the 92,000 units sold from finished goods to cost of goods sold. h. Paid $2,120,000 of selling and administrative expenses. 1. Closed all standard cost variances to cost of goods sold. Required: 1. Compute all direct materials, direct labor, and fixed overhead variances for the yeat, 2. Record transactions a through ifor Wallis Company. 3. Compute the ending balances for Wallis Company's balance sheet 4. Prepare Wallis Company's income statement for the year. Compute all direct materials, direct labor, and fixed overhead varianc selecting "F" for favorable, "U" for unfavorable, and "None" for no effe values.) Transaction Analysis or the Year Ended 12/31/XX (dollars in thousands) Prepare Wallis Company's income statement for the year. (Enter your dollars in thousands.) Wallis Company manufactures only one product and uses a standard cost system, The company uses a predetermined plantwide overhead rate that relies on direct labor-hours as the allocation base. All of the compary's manufacturing overhead costs are fixed-it does not incur any variable manufacturing overhead costs. The predetermined overhead rate is based on a cost formula that estimated $2,880,000 of fixed manufacturing overhead for an estimated allocation base of 288,000 direct labor-hours. Wallis does not maintain any beginning or ending work in process inventory. The company's beginning balance sheet is as follows: The company's standard cost card for its only product is as follows: During the year Wallis completed the following transactions: a. Purchased (with cash) 230,000 pounds of raw material at a price of $29.50 per pound. b. Added 215,000 pounds of raw material to work in process to produce 95,000 units. c. Assigned direct labor costs to work in process. The direct laborers (who were paid in cash) worked 245,000 hours at an average cost of $16.00 per hour to manufacture 95,000 units. d. Applied fixed overhead to work in process inventory using the predetermined overhead rate multiplied by the number of direct labor-hours allowed to manufacture 95,000 units. Actual fixed overhead costs for the year were $2,740,000. Of this total, $1,340,000 related to items such as insurance, utilities, and salaried indirect laborers that were all paid in cash and $1,400,000 related to depreciation of equipment. e. Transferred 95,000 units from work in process to finished goods. f. Sold (for cash) 92,000 units to customers at a price of $170 per unit. 9. Transferred the standard cost associated with the 92,000 units sold from finished goods to cost of goods sold. h. Paid $2,120,000 of selling and administrative expenses. 1. Closed all standard cost variances to cost of goods sold. Required: 1. Compute all direct materials, direct labor, and fixed overhead variances for the yeat, 2. Record transactions a through ifor Wallis Company. 3. Compute the ending balances for Wallis Company's balance sheet 4. Prepare Wallis Company's income statement for the year. Compute all direct materials, direct labor, and fixed overhead varianc selecting "F" for favorable, "U" for unfavorable, and "None" for no effe values.) Transaction Analysis or the Year Ended 12/31/XX (dollars in thousands) Prepare Wallis Company's income statement for the year. (Enter your dollars in thousands.)
