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8 f B C D F H G Special order lamps are manufactured in division S. Because of the precise nature of the process a 5 standard cost system has been developed. The following standards are used for the special orders: 6 8 19 20 Standards 21 Lamp Kits $ 16,000000 per lamp 22 Direct Labor 2.400000 per lamp (4 lamps/hr) 24 Variable Overhead 0.250000 per lamp (4 lamps/hr) 25 ** Fixed Overhead 10.000000 per lamp 26 Total $28.650000 27 28 *** Fixed overhead is based on expected production of 4,017 customized lamps each month. 30 31 To keep records of the actual cost of a job, a Job Order Cost System has been developed. Entries 32 are made to the Job Order System at actual cost (overhead is applied based on actual labor hours) 33 while entries are made to the accounting system at standard. Variance analysis is used to analyze the 34 differences 36 37 38 39 Job Order Costing Section 42 On January 1, 20x2. Division S began Job 1101 for the Client, THE BIG CHILDREN STORE The 43 job called for 4,000 customized lamps The following set of transactions occurred from 44 January 5 until the job was completed 40 5 Jan Purchased 4, 175 Lamp Kits @ 516.70 per kit 9 Jan 4,125 sets of Lamp Kits were requisitioned. 17 Jan Payroll of 640 Direct Labor Hours @ $9.65 per hour 30-Jan Payroll of 690 Direct Labor Hours @ 59.90 per hour. 30 Jan 3,983 lamps were completed and shipped. All materials requisitioned were used or scrapped 45 46 48 49 50 51 52 54 55 56 57 58 59 60 61 62 63 64 Month End Overhead Information Actual Variable Overhead Actual Fixed Overhead $ 1.197.00 $ 41.373.45 11 9 12 10 13 15 14 10 FAQ 1 2 3 4 How many Lamps were completed? Note: Show favorable variances as negative numbers Round dollars to two places, St. What was the total material price variance for the Lamp Kits purchased? +(15.01) What was the material usage variance for Lamp Kits? (15.02) (15.03) 9 0 1 12 83 What was the direct labor efficiency variance ? 36 37 38 39 What was the direct labor rate variance? 40 43 44 45 15.04) Note: Show favorable variances as negative numbers 3 (16.01) What was the variable overhead officiency variance ? 1 2 6 27 8. What was the variable OH spending variance ? 29 30 (16.02) {16.03) 35 36 37 38 42 43 44 What is the fixed OH volume (denominator) variance? 45 46 50 51 52 53 54 58 What is the fixed OH spending variance? 59 60 61 62 66 67 68 (16.04) 69 + (17.01 (1702) Big Al gives his worker's a one hour lunch and two fifteen minute breaks each day. He believes that a cold soda machine would be appreciated by his workers, and an appreciated worker is a good worker 5 He has priced a machine at a national member only warehouse for $2,050. The machine should be 6 usable for 3 years, after which it would be inefficient, obsolete and would have to be disposed of at the 1 dump Big Al believes that 17 cans a day will be purchased. The plant is open five days a week, 50 2 weeks per year. A case of soda (24 cans) costs $6.00 and Big Al believes that a price of $ 55 per 23 can would win him good will. 24 25 What is the estimated annual sales in cans of soda? 30 31 32 33 What is the contribution margin per can of soda? (rounded to two places 588) 34 39 40 41 42 43 How many cans of soda must be sold each year to breakeven? (Round up to zero places, still cans) 48 49 50 51 52 57 Annual incremental cash inflows from the soda machine? (rounded to two places, S# 4) 58 59 60 61 66 67 68 69 What is the payback period in years (rounded to two places, years) 70 75 76 77 78 (1703) (1704 (1705) If the time value of money is 12% per year what is the net present value? Use the tables on page 18. {17.06) What is the internal rate of return. Pick the closest interest rate from the tables on page 18 {17.07)