REQUIREMENTS

QUESTIONS

OPTIONS FOR 7 AND 8 BELOW

5. For manufacturing overhead, compute the total variance, the flexible budget variance, and the production volume variance. 6. What is the total flexible budget variance for One System's manufacturing costs? Show how the total flexible budget variance is divided into materials, labour, and overhead variances. 7. Have One System's managers done a good job or a poor job controlling material and labour costs? Why? 8. Describe how One System's managers can benefit from the standard costing system DATA TABLE Data Table Static Budget (20,000 PCs) $ 8,000,000 Actual Results (22,000 PCs) 9,240,000 2,000,000 2,099,160 560,000 Sales (20,000 PCs X $400 ) (22,000 PCs X $420 ) Variable manufacturing expenses: Direct materials (200,000 parts $10.00) (214,200 parts $9.80) Direct labour (40,000 hrs. * $14.00 ) (42,500 hrs. * $14.60) Variable overhead (200,000 parts x $ 4.00) (214,200 parts $ 4.10 ) Fixed manufacturing expenses: Fixed overhead Total cost of goods sold Gross profit 620,500 800,000 878,220 930,000 900,000 4,260,000 4,527,880 $ 3,740,000 $ 4,712,120 Requirement 5. For manufacturing overhead, compute the total variance, the flexible budget variance, and the production volume variance. (Enter the results as positive numbers. Label each variance as favourable (F) or unfavourable (U).) One System Manufacturing Overhead Variances Total overhead variance: Actual overhead cost Standard overhead allocated to production Total overhead variance Overhead flexible budget variance: Actual overhead cost Flexible budget overhead for actual outputs Overhead flexible budget variance Production volume variance: Flexible budget overhead for actual outputs Standard overhead allocated to production Production volume variance Requirement 6. What is the total flexible budget variance for One System's manufacturing costs? Show how the total flexible budget variance is divided into materials, labour, and overhead variances. (Enter the results as positive numbers. Label each variance as favourable (F) or unfavourable (U).) Total actual manufacturing costs Total flexible budget manufacturing costs Total flexible budget variance for manufacturing costs Direct material variances: Price Efficiency Total material variances Direct labour variances: Price Efficiency Total direct labour variances Overhead flexible budget variance Total flexible budget variance for manufacturing costs Requirement 7. Have One System's managers done a good job or a poor job controlling material and labour costs? Why? job controlling materials and labour costs. The direct materials price variance, direct materials efficiency variance, and direct labour efficiency variance far outweigh the direct The variances computed in Requirements 3 and 4 suggest that the managers have done a labour price variance. Requirement 8. Describe how One System's managers can benefit from the standard costing system. Select five benefits managers may have from the standard costing system. Standards: Requirement 7. Have One System's managers done a good job or a poor job controlling material and labour costs? Why? job controlling materials and labour costs. The direct materials price variance, direct materials efficiency variance, and direct labour efficiency variance far outweigh the direct The variances computed in Requirements 3 and 4 suggest that the managers have done a labour price variance. Requirement 8. Describe how One System's managers can benefit from the standard costi Select five benefits managers may have from the standard costing system. good poor direct materials price variance, direct materials efficiency variance, and direct labour efficiency variance far outweigh the direct Requirement 7. Have One System's managers done a good job or a poor job controlling material and labour costs? Why? The variances computed in Requirements 3 and 4 suggest that the managers have done a job controlling materials and labour costs. The labour price variance. Requirement 8. Describe how One System's managers can benefit from the standard costing system. Select five benefits managers may have from the standard costing system. favourable unfavourable Requirement 7. Have One System's managers done a good job or a poor job controlling material and labour costs? Why? direct materials price variance, direct materials efficiency variance, and direct labour efficiency variance far outweigh the direct The variances computed in Requirements 3 and 4 suggest that the managers have done a job controlling materials and labour costs. The labour price variance. Requirement 8. Describe how One System's managers can benefit from the standard costing system. Select five benefits managers may have from the standard costing system. favourable unfavourable