Recliners manufactures leather recliners and uses flexible budgeting and a standard cost system.
ColeCole
allocates overhead based on yards of direct materials. The company's performance report includes the following selected data:
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(Click the icon to view the selected data.) Read the requirements
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Requirement 1. Prepare a flexible budget based on the actual number of recliners sold. (Round budget amounts per unit to the nearest cent.)
Data Table Static Budget (1,025 recliners) Actual Results (1,005 recliners) Sales (1,025 reclinersx S 515 each) (1,005 reclinersx S 475 each) S 527,875 477,375 Variable Manufacturing Costs Direct Materials 52,275 (6,150 yds. S 8.50/yd.) (6,300 yds. S 8.30/yd.) (10,250 DLHr S 9.10 / DLHr) (9,850 DLHr a S 9.30 / DLHr) (6,150 yds. S 5.10 / yd.) (6,300 yds. @ S 6.50 yd.) 52,290 Direct Labor 93,275 91,605 Variable Overhead 31,365 40,950 Fixed Manufacturing Costs 62,730 239,645 288,230 S 64,730 249,575 227,800 Fixed Overhead Total Cost of Goods Sold Gross Profit Print Done Cole Recliners manufactures leather recliners and uses flexible budgeting and a slandard cost system. Cole alocates overhead based on yards of direct materials. The company's performance report includes the following selected data. EB(Click the icon to view the selected data) Read the requirements Requirement 1. Prepare a nexiple blidget based nn tre ial number of recliners sold (Round bUdget amounts per unit torne nearest cent Cole Recliners Flexible Budget Budget Amounts per Unit Actual Units (Recliners) Sales Revenue Vanable Manutacturing Costs: Direct Materials Direct I abor Variable Overhead Fixed Manufacturing Costs. Fxed Overhead Total Cost of Goods Sold Gross Profit Choose from any list or enter any number in the input fields and then continue to the next question Cole Recliners manufactures leather recliners and uses exoe budgeting nd a standard cost system. Cole allocates overhed based on yaras o direct materials The company's performance report inclu des he ollowing selected data. E (Click Lh6 icun lo view the selected dala.) Read the requirements Requirement 2. Ccmpute the cost variance and the ettciency variance tor direct matenals and tor diect labor For manutactunng overhead compute the varable overhead cost, variable owerhead ethciency txed owerhead cost, and tixed overhead volume variances Round to the nearest dollar Hegin with the cost variances Select the required tormulas, compute the cost vanances tor direct matenials and direct lahor, and identity wnether each variance is tavorable (F) ar untavrable () Round your answers to the nearest whole dollar Ahbreviatic used. AG = actual rost A(2-actual quantity: t()H = txed overhead: SG-standard cost SQ = standard quant ty) Formula Variance Direct materials cost variancc Direct labor cosl variance Next compute the etficiency varances Select the required tormulas, compute the etticiency variances tor direct materialsand direct labor and identity whether each vanance is tavorable (F) or unfavorahle () (Round your answers to the nearest whole doll Ahbrevlat ons used. AC = actual rost AQ-actual quantity: t()H = txed oemeed: SC-standard cost SQ-standard quantity ) Formula Variance Direct materials efm ciency variance Direct labor eliency varianice Nuw compule lhe variable overhead cosl and effitiency variarnces. Selecl lhe required fonulas, compule the variable overhead cosl arnd efficiericy variaices, and idenlify whelier eacth variarice is favorable (F) or unfevorable (U). (Round your answers lo h nearest whole dollar. Abbreviations used. AC-actual cost A actual quantity FCH-fixed overhead. SC-slandard cost, SQ-standard quantity, VOH = variable overhead.) Formula Varianice VOH cost variance VOII elliciency variance - Choose from any list or enter any number in the input fields and then continue to the next question. o e Rec rers " anul cures eau 'ec lners and uses no ble budge ng and s anda uosl s s rn. u e alloca es overl e based on ards u direc male' is. The compan s performance repot includes he u owing se ecled de cck the icon to view the selected data) Read the requirements ow compute xed over ea cos and volume var ances. Se ec 16 tequired ormulas compute he xed overheau cos ar v ume variances and Identify whether each variance is a rable F or unfavorable (U whole dollar. Abbreviations used. AC-actual cusi, AQ = actual quantity. FOH = fixed overhead. SC = standard cost, sa = standard quantity:) ound our answers o he nearest Formula VanancA FOH cosl variance FOI volume variance Requirement 3. Have Cole's mansgers done a godob ar a poor job controlling materials, labor and overhead costs Whyi The varances computed in Requirement 2 suggest that the managers have done a labor cost vanance and direct materiais etficiency variance Managers hve donea Requirement 4. Describe how Cole's managers can benefit from the standard costing system. Standard costing helps managers do the following: job controling matenals and labor costs. The direct materials cost variance and direct lsbor efficiency vanance help affset the direct job controlling overhead costs as evidenced by the fact that f the overhead variances are Choose from any list or enter any number in the input fields and then continue to the next
