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Accounting Seven Problems Set Solution

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Question;Problem1. Standard and actual costs for direct materials for the manufacture of 1,000 units of product were as follows:Actual costs1,550 lbs. @ $9.10Standard costs1,600 lbs. @ $9.00Determine the (a) quantity variance, (b) price variance, and (c) total direct materials cost variance.2. Standard and actual costs for direct labor for the manufacture of 1,000 units of product were as follows:Actual costs950 hours @ $37.00Standard costs975 hours @ $36.00Determine the (a) time variance, (b) rate variance, and (c) total direct labor cost variance.3. A department store apportions payroll costs on the basis of the number of payroll checks issued. Accounting costs are apportioned on the basis of the number of reports. The payroll costs for the year were $231,000 and the accounting costs for the year totaled $75,500. The departments and the average cost of store equipment and average cost of inventory for each are as follows:Number ofPayroll ChecksNumberof ReportsDepartment R48370Department S1,47085Department T147345Determine the amount of (a) payroll cost and (b) accounting cost to be apportioned to each department.4. The sales, income from operations, and invested assets for each division of Grosbeak Company are as follows:SalesIncome fromOperationsInvestedAssetsDivision E$5,000,000$550,000$2,400,000Division F4,800,000860,0002,500,000Division G7,000,000860,0002,900,000(a)Using the expanded expression, determine the profit margin, investment turnover, and rate of return on investment for each division. Round to one decimal place.(b)Which is (are) the most profitable per dollar invested?5. The sales, income from operations, and invested assets for each division of Wren Company are as follows:SalesIncome fromOperationsInvestedAssetsDivision C$5,000,000$630,000$4,000,000Division D6,800,000760,0003,900,000Division E3,750,000750,0007,500,000Management has established a minimum rate of return for invested assets of 10%.(a)Determine the residual income for each division.(b)Based on residual income, which of the divisions is the most profitable?6. Snipe Company has been purchasing a component, Part Q, for $19.20 a unit. Snipe is currently operating at 70% of capacity and no significant increase in production is anticipated in the near future. The cost of manufacturing a unit of Part Q, determined by absorption costing methods, is estimated as follows:Direct materials$11.50Direct labor4.50Variable factory overhead1.12Fixed factory overhead3.15Total$20.27Prepare a differential analysis report, dated March 12 of the current year, on the decision to make or buy Part Q.7.Schedule of Activity CostsQuality Control ActivitiesActivity CostProcess audits$55,000Training of machine operators26,000Processing returned products18,000Scrap processing (disposal)29,000Rework8,000Preventative maintenance30,000Product design46,000Warranty work12,000Finished goods inspection22,000From the above schedule, determine:a. the value added costs ___________________________b. the nonvalue added costs ________________________c. the internal failure costs ________________________d. the external failure costs

 

Paper#40563 | Written in 18-Jul-2015

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