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Special order lamps are manufactured in division S. Because of the precise nature of the process a standard cost system has been developed. The following
Special order lamps are manufactured in division S. Because of the precise nature of the process a | |||||||
standard cost system has been developed. The following standards are used for the special orders: | |||||||
Standards | |||||||
Lamp Kits | $16.000000 | per lamp | |||||
Direct Labor | 2.400000 | per lamp (4 lamps/hr.) | |||||
Variable Overhead | 0.250000 | per lamp (4 lamps/hr.) | |||||
** | Fixed Overhead | 10.000000 | per lamp | ||||
Total | $28.650000 | ||||||
** Fixed overhead is based on expected production of 4,012 customized lamps each month. | |||||||
To keep records of the actual cost of a job, a Job Order Cost System has been developed. Entries | |||||||
are made to the Job Order System at actual cost (overhead is applied based on actual labor hours) | |||||||
while entries are made to the accounting system at standard. Variance analysis is used to analyze the | |||||||
differences. | |||||||
I See The Light Projected Income Statement For the Period Ending December 31, 20x1 $45.00 $30.00 $ 1,125,000.00 750,000.00 $ 375,000.00 Sales 25,000 lamps @ Cost of Goods Sold @ Gross Profit Selling Expenses: Fixed Variable (Commission per unit) @ Administrative Expenses: Fixed Variable @ Total Selling and Administrative Expenses: Net Profit $3.00 $ 23,000.00 75,000.00 $ 98,000.00 $2.00 $ 42,000.00 50,000.00 92,000.00 $ 190,000.00 185,000.00 Projected Balance Sheet As of December 31, 20x1 $ 34,710.00 67,500.00 Current Assets Cash Accounts Receivable Inventory Raw Material Lamp Kits Work in Process Finished Goods Total Current Assets 500 @ $16.00 8,000.00 3000 @ $30.00 90,000.00 $ 200,210.00 Fixed Assets Equipment Accumulated Depreciation Total Fixed Assets Total Assets $ 20,000.00 6,800.00 13,200.00 $ 213,410.00 $ $ 54,000.00 54,000.00 Current Liabilities Accounts Payable Total Liabilities Stockholder's Equity Common Stock Retained Earnings Total Stockholder's Equity Total Liabilities and Stockholder's Equity $ 12,000.00 147,410.00 159,410.00 213.410.00 Job Order Costing Section On January 1, 20x2, Division S began Job 1101 for the Client, THE BIG CHILDREN STORE. The job called for 4,000 customized lamps. The following set of transactions occurred from January 5 until the job was completed: 5-Jan Purchased 4,025 Lamp Kits @ $16.75 per kit. 9-Jan 4,075 sets of Lamp Kits were requisitioned. 17-Jan Payroll of 570 Direct Labor Hours @ $9.40 per hour. 30-Jan Payroll of 620 Direct Labor Hours @ $9.65 per hour. 30-Jan 3,988 lamps were completed and shipped. All materials requisitioned were used or scrapped. Month End Overhead Information Actual Variable Overhead Actual Fixed Overhead $ 1,213.80 $ 39,623.45 How many Lamps were completed? Note: Show favorable variances as negative numbers two places, $## ## 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) What was the direct labor efficiency variance ? {15.03) What was the direct labor rate variance? {15.04) Note: Show favorable variances as negative numbers What was the variable overhead efficiency variance? (16.01) What was the variable OH spending variance? {16.02) What is the fixed OH volume (denominator) variance? (16.03) What is the foxed OH spending variance? (16.04) I See The Light Projected Income Statement For the Period Ending December 31, 20x1 $45.00 $30.00 $ 1,125,000.00 750,000.00 $ 375,000.00 Sales 25,000 lamps @ Cost of Goods Sold @ Gross Profit Selling Expenses: Fixed Variable (Commission per unit) @ Administrative Expenses: Fixed Variable @ Total Selling and Administrative Expenses: Net Profit $3.00 $ 23,000.00 75,000.00 $ 98,000.00 $2.00 $ 42,000.00 50,000.00 92,000.00 $ 190,000.00 185,000.00 Projected Balance Sheet As of December 31, 20x1 $ 34,710.00 67,500.00 Current Assets Cash Accounts Receivable Inventory Raw Material Lamp Kits Work in Process Finished Goods Total Current Assets 500 @ $16.00 8,000.00 3000 @ $30.00 90,000.00 $ 200,210.00 Fixed Assets Equipment Accumulated Depreciation Total Fixed Assets Total Assets $ 20,000.00 6,800.00 13,200.00 $ 213,410.00 $ $ 54,000.00 54,000.00 Current Liabilities Accounts Payable Total Liabilities Stockholder's Equity Common Stock Retained Earnings Total Stockholder's Equity Total Liabilities and Stockholder's Equity $ 12,000.00 147,410.00 159,410.00 213.410.00 Job Order Costing Section On January 1, 20x2, Division S began Job 1101 for the Client, THE BIG CHILDREN STORE. The job called for 4,000 customized lamps. The following set of transactions occurred from January 5 until the job was completed: 5-Jan Purchased 4,025 Lamp Kits @ $16.75 per kit. 9-Jan 4,075 sets of Lamp Kits were requisitioned. 17-Jan Payroll of 570 Direct Labor Hours @ $9.40 per hour. 30-Jan Payroll of 620 Direct Labor Hours @ $9.65 per hour. 30-Jan 3,988 lamps were completed and shipped. All materials requisitioned were used or scrapped. Month End Overhead Information Actual Variable Overhead Actual Fixed Overhead $ 1,213.80 $ 39,623.45 How many Lamps were completed? Note: Show favorable variances as negative numbers two places, $## ## 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) What was the direct labor efficiency variance ? {15.03) What was the direct labor rate variance? {15.04) Note: Show favorable variances as negative numbers What was the variable overhead efficiency variance? (16.01) What was the variable OH spending variance? {16.02) What is the fixed OH volume (denominator) variance? (16.03) What is the foxed OH spending variance? (16.04)
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