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1.Boron Chemical Company produces a




Put answers in Excel;1.Boron Chemical Company produces a synthetic;resin that is used in the automotive industry resin that is used in the automotive industry. The company uses a standard cost system. For each gallon of output, the following direct manufacturing costs are anticipated;Direct labor: 2 hours at $25.00 per hour $50.00;Direct materials: 2 gallons at $10.00 per gallon $20.00;During December of 2013, Boron produced a total of 2,500 gallons of output and incurred the;following direct manufacturing costs;Direct labor: 4,900 hours worked @ an average wage rate of $19.50 per hour;Direct materials;Purchased: 6,000 gallons @ $10.45 per gallon;Used in production: 5,100 gallons;Boron records price variances for materials at the time of purchase.;Required Give journal entries for the following events and transactions;1. Purchase, on credit, of direct materials.;2. Direct materials issued to production.;3. Direct labor cost of units completed this period.;4. Direct manufacturing cost (direct labor plus direct materials) of units completed and transferred;to Finished Goods Inventory.;5. Sale, for $150 per gallon, of 2,000 gallons of output. (Hint: You will need two journal entries here.);2. International Finance Incorporated issues;letters of credit to importers for overseas purchases. The company charges a nonrefundable;application fee of $3,000 and, on approval, an additional service fee of 2% of the amount of;credit requested.;The firm?s budget for the year just completed included fixed expenses for office salaries and;wages of $500,000, leasing office space and equipment of $50,000, and utilities and other operating expenses of $10,000. In addition, the budget also included variable expenses for supplies;and other variable overhead costs of $1,000,000. The company estimated these variable over-;head costs to be $2,000 for each letter of credit approved and issued. The company approves;on average, 80% of the applications it receives.;During the year, the company received 600 requests and approved 75% of them. The total;variable overhead was 10% higher than the standard amount applied, the total fixed expenses;were 5% lower than the amount budgeted.;In addition to these expenses, the company paid a $270,000 insurance premium for the letters;of credit issued. The insurance premium is 1% of the amount of credits issued in U.S. dollars.;The actual amount of credit issued often differs from the amount requested due to fluctuations;in exchange rates and variations in the amount shipped from the amount ordered by importers.;The strength of the dollar during the year decreased the insurance premium by 10%.;Required;1. Calculate the (a) variable, and (b) fixed overhead rates for the year.;2. Prepare an analysis of the overhead variances for the year just completed. (a) What is the total;controllable (i.e., flexible-budget) variance for the period? (b) What is the overhead volume variance for the period? (Hint: These two should sum to $88,000U.)


Paper#67690 | Written in 18-Jul-2015

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