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Kwikeze Company set the following standard costs...

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Kwikeze Company set the following standard costs for one unit of its product. Direct materials ((3.0 Ibs. @ $5.0 per Ib.) $ 15.00 Direct labor (1.7 hrs. @ $11.0 per hr.) 18.70 Overhead (1.7 hrs. @ $18.50 per hr.) 31.45 Total standard cost $ 65.15 The predetermined overhead rate ($18.50 per direct labor hour) is based on an expected volume of 75% of the factory?s capacity of 20,000 units per month. Following are the company?s budgeted overhead costs per month at the 75% level. Overhead Budget (75% Capacity) Variable overhead costs Indirect materials $ 15,000 Indirect labor 75,000 Power 15,000 Repairs and maintenance 30,000 Total variable overhead costs $ 135,000 Fixed overhead costs Depreciation?building 23,000 Depreciation?machinery 74,000 Taxes and insurance 20,000 Supervision 219,750 Total fixed overhead costs 336,750 Total overhead costs $ 471,750 The company incurred the following actual costs when it operated at 75% of capacity in October. Direct materials (46,500 Ibs. @ $5.10 per lb.) $ 237,150 Direct labor (32,000 hrs. @ $11.20 per hr.) 358,400 Overhead costs Indirect materials $ 45,250 Indirect labor 176,000 Power 17,250 Repairs and maintenance 34,500 Depreciation?building 23,000 Depreciation?machinery 99,900 Taxes and insurance 18,000 Supervision 219,750 633,650 Total costs $ 1,229,200 16. Required: 1(a) Examine the monthly overhead budget to determine the costs per unit for each variable overhead item and its total per unit costs. (Round your answers to 2 decimal places. Omit the "$" sign in your response.) Variable or Fixed Classification Amount Variable costs (per unit)* Indirect materials $ Indirect labor Power Repairs and maintenance Total variable costs $ 1(b) Examine the monthly overhead budget to identify the total fixed costs per month. (Omit the "$" sign in your response.) Total fixed costs $ 17. 2. Prepare flexible overhead budgets for October showing the amounts of each variable and fixed cost at the 65%, 75%, and 85% capacity levels. (Round your variable amount per unit answers to 2 decimal places. Omit the "$" sign in your response.) KWIKEZE COMPANY Flexible Overhead Budgets For Month Ended October 31 Flexible Budget Variable Total Flexible Budget Flexible Budget Flexible Budget Amount Fixed for Unit Sales for Unit Sales for Unit Sales per Unit Cost of 13,000 of 15,000 of 17,000 Variable overhead costs $ $ $ $ Total variable costs $ Fixed overhead costs $ Total fixed costs $ Total overhead costs $ $ $ 18. 3. Compute the direct materials cost variance, including its price and quantity variances.(Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.) Direct materials cost variance $ Price variance $ Quantity variance $ 19. 4. Compute the direct labor cost variance, including its rate and efficiency variances.(Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.) Direct labor cost variance $ Rate variance $ Efficiency variance $ 20. 5. Prepare a detailed overhead variance report that shows the variances for individual items of overhead. (Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Omit the "$" & "%" signs in your response.) KWIKEZE COMPANY Overhead Variance Report For Month Ended October 31 Volume Variance Expected production level % of capacity Production level achieved % of capacity Volume variance Controllable Variance Flexible Budget Actual Results Variances Variable overhead costs $ $ $ Total variable costs Fixed overhead costs Total fixed costs Total overhead costs $ $ $ *Look at the .Docx file

 

Paper#9689 | Written in 18-Jul-2015

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