Cost Accounting

| June 7, 2016

Question
Peaceful Corporation manufactures figurines based on the following information.

Standard costs $20
Materials (4 ounces at $5) $8
Direct labor (1 hour per unit) $4
Variable overhead (based on direct labor hours)
Fixed overhead budget $19,000
Actual results and costs
Materials purchased
Units 9,000
Cost $39,600
Materials used in production
Finished product units 2,000
Raw material (ounces) 8,200
Direct labor hours 2,000
Direct labor cost $20,000
Variable overhead costs $5,980
Fixed overhead costs $19,500
Required:

Prepare a performance report for Peaceful using the following headings.
Actual Production Costs
Flexible Budget Costs
Flexible Budget Variances
Compute the following variances (show calculations).
Materials usage variance
Labor rate variance
Labor efficiency variance
Variable overhead spending variance
Variable overhead efficiency variance
Fixed overhead budget variance
Give one possible explanation for each of the six variances computed in part b.
Problem 2:
The following is the current variable costing income statement for Dolly Corporation.

Sales (5,000 units) $100,000
Variable expenses Cost of goods sold $35,000
Selling (10% of sales) $10,000 $45,000
Contribution margin $55,000
Fixed expenses
Manufacturing overhead $24,000
Administrative $12,500 $36,500
Operating income $18,500
Below is the following information on operations for Dolly Corporation.

Beginning inventory (units) 0
Units produced (units) 6,000
Manufacturing costs
Direct labor (per unit) $5.00
Direct materials (per unit) $2.30
Variable overhead (per unit) $2.40
Required:
Prepare an absorption costing income statement.

Problem 3:
The following information was compiled for two models of cell phones.

3G model 4G model Average
Budgeted Contribution Margin $80.00 $120.00 $95.25
Budgeted Sales in Units 28,000 18,000
Actual Sales in Units 28,600 16,500
Required:
Calculate the sales mix variance. (Show your calculations.)

Order your essay today and save 30% with the discount code: ESSAYHELPOrder Now