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##### accounting problems with A+ answers-Dolly Corporation

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Question;Problem 1From the data below, you are asked to prepare an absorption costing income statement.Dolly CorporationVariable costing income statementSales (5,000 units)Variable Expenses:Variable Cost of Goods SoldVariable Selling expenses (10% of sales)Total variable expensesContribution MarginFixed expenses:Manufacturing Overhead (Fixed COGS)AdministrativeTotal fixed expensesOperating Income$100,00035,00010,00045,00055,000Notice on a variable costing income statement we have a CONTRIBUTION margin subtotal24,00012,50036,500$18,500Profit is always sales less all costsPrepare an Absorption Costing Income Statement assuming no beginning inventory and SALES of 5,000 units and the following cost data:DM per unit$5.00DL per unit$2.30Variable MOH per unit$2.40Total Variable COGS per unitVariable selling expenses per unit$2.00Fixed MOH per unitCompute. Take the fixed MOH above and divide it by 6000 units, the units we produced.Dolly Corporationosting income statement for 5,000 unitsAbsorption costing income statement for 5,000 unitsSalesCost of Goods Sold:DMHere we only expense COGS for the units we actually sold. We sold 5000 unitsDLHere we only expense COGS for the units we actually sold. We sold 5000 unitsVariable MOHHere we only expense COGS for the units we actually sold. We sold 5000 unitsFixed MOHHere we only expense COGS for the units we actually sold. We sold 5000 unitsTotal COGSGross Profit$Less: Operating ExpensesSelling ExpensesAdministrative expensesTotal Operating ExpensesOperating Income$-Wk 7 Problem 2Study part b for a 30 point problem on the final. This is pretty easy folks once you study it a bit.Standard costsMaterials4 ounces per unit at $5/ozDirect labor (on hour per unit)Variable overhead (based on DL hours)Fixed overhead budgetPer unit2084Total $so you can see that variable overhead is half of DL$19,000Actual results and costsMaterials purchased:Units9,000Costs$39,600Materials used in Production:Finished product units2,000raw material (ounces)8,200$41,000 They did not give us $ so I had to assume the price was the same as standard hereDirect labor hours2,000direct labor cost$20,000Variable overhead cost$5,980Fixed overhead costs$19,500Put on your thinking caps now!MaterialsIf I made 2000 units, how many ounces of material should I have used?Hint: I should use 4 ounces per unitNow multiply that times $5 per ounce for the flexible budget direct materialsFill this in belowLaborIf I Made 2000 units, how many hours of labor should I have used?Hint: I should use 1 hour of labor per unitNow multiply those hours times the budgeted hourly rate of $8per hour given aboveFill this in belowVariable overheadIf I made 2000 units, how much $ should I have spent on variable OH?Note: above they said the overhead was based on labor. It is half of the labor amounta. Fill in the performance reportDirect MaterialsDirect LaborVariable overheadFixed overheadTotalb. Compute variancesMaterials usage variance = (AQ-SQ)*SPActual Ounces of materials usedFlexible budget/standard quantity/ouncesDifference in quantity/usageStandard cost per ounceMaterials usage varianceLabor rate variance = (AR-SR)*AHActual Hourly rateStandard rate per hourDifference in rate per hourActual Labor hours usedLabor rate varianceActualProductioncosts$41,000FlexibleBudgetCosts$41,000$-FlexibleBudgetVariance$-In other words, the difference in the quantity used times the standard price. That is how much of a variance we had because we used a different quantity than standardSee data abovesee your answer to F220$-Also, is this favorable for unfavorable?In other words, the diffence in rate per hour times the actual hours. This is the amount we were off budget/standard because our labor rate was different than planned.You are given actual labor $ and actual labor hours so you can compute the actual hourly rate8 given above-82,000 given aboveMultiply difference in rate times actual labor hours usedFixed overhead budget variance = Actual fixed OH - Budgeted fixed OHActual fixed overheadBudgeted fixed overheadFixed overhead budget varianceNote: See yellow highlights above. You WILL get a 30 point problem on page 2 of the final which will askyou to compute these variances. Be able to do this on your own. It is very much like this problem exceptthey do not ask you to do the performance report.They will not give you the hints I did below "put on your thining caps!"I am not asking you to compute the variable overhead variances on this homework and you will not have to compute these on the final either

Paper#38154 | Written in 18-Jul-2015

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