Exercise 9-11 (Algo) Activity Variances [LO9-2] Lavage Rapide owns and operates a large automatic car wash facility near Montreal. The following table provides estimates concerning the company's costs: Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses Fixed Cost per Month Cost per Car Washed $ 0.70 $ 1,000 $ 0.09 $ 0.20 $ 4,000 $ 0.40 $ 8,500 $ 2,200 $ 1,500 $ 0.03 For example, electricity costs should be $1,000 per month plus $0.09 per car washed. The company expects to wash 8,300 cars in August and to collect an average of $6.50 per car washed. The company actually washed 8,400 cars in August. Required: Calculate the company's activity variances for August. Note: Indicate the effect of each varlance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (l.e., zero varlance). Input all amounts as positive values. Revenue Expenses: Lavage Rapide Activity Variances For the Month Ended August 31 Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses Total expenses Net operating income

Exercise 9-11 (Algo) Activity Variances [LO9-2] Lavage Rapide owns and operates a large automatic car wash facility near Montreal. The following table provides estimates concerning the company's costs: Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses Fixed Cost per Month Cost per Car Washed $ 0.70 $ 1,000 $ 0.09 $ 0.20 $ 4,000 $ 0.40 $ 8,500 $ 2,200 $ 1,500 $ 0.03 For example, electricity costs should be $1,000 per month plus $0.09 per car washed. The company expects to wash 8,300 cars in August and to collect an average of $6.50 per car washed. The company actually washed 8,400 cars in August. Required: Calculate the company's activity variances for August. Note: Indicate the effect of each varlance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (l.e., zero varlance). Input all amounts as positive values. Revenue Expenses: Lavage Rapide Activity Variances For the Month Ended August 31 Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses Total expenses Net operating income

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter7: Allocating Costs Of Support Departments And Joint Products

Section: Chapter Questions

Problem 1CE: The expected costs for the Maintenance Department of Stazler, Inc., for the coming year include:...

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ndenccinstructure.com/courses/3788/assignments/35969 Question 19 View Policies -/1 Current Attempt in Progress Bangor Company manufactures two products, Velveeto and Fondant. Bangor has estimated overhead costs as follows: setting up machines ($160,000), machining ($300,000) and inspecting ($100,000). Information on the two products follows: Velveeto Fondant Direct labor hours 60,000 100,000 Machine setups 2,400 1,600 Machine hours 96,000 104,000 Inspections 3,200 2,800 Overhead is applied to Fondant using direct labor hours. What is the total amount of overhead charged to this product line using traditional costing? $280,000 O $210,000 $350,000 O $105,000 2:29 PM 10/13/2019 e
1 4 points Skipped TB MC Qu. 10A-86 (Static) Tierman Incorporated makes a single product--a... Tierman Incorporated makes a single product--a cooling coil used in commercial refrigerators. The company has a standard cost system in which it applies overhead to this product based on the standard machine-hours allowed for the actual output of the period. Data concerning the most recent year appear below: Budgeted fixed manufacturing overhead Budgeted production (a) $ 221,700 15,000 units Standard hours per unit (b) eBook Budgeted hours (a) x (b). Actual production (a) Standard hours per unit (b) Standard hours allowed for the actual production (a) x (b) Actual fixed manufacturing overhead The fixed overhead volume variance is: 2.00 machine-hours 30,000 machine-hours 17,000 units 2.00 machine-hours 34,000 machine-hours $ 207,700 Multiple Choice
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E4-4 Altex Inc. manufactures two products: car wheels and truck wheels. To determine the amount of overhead to assign to each product line, the controller, Robert Hermann, has developed the following information. Estimated wheels produced Direct labor hours per wheel Car 40,000 1 Total estimated overhead costs for the two product lines are $770,000. Instructions (a) Compute the overhead cost assigned to the car wheels and truck wheels, assuming that direct labor hours is used to allocate overhead costs. Activity Cost Pools Setting up machines Assembling Inspection Truck 10,000 3 (b) Hermann is not satisfied with the traditional method of allocating overhead because he believes that most of the overhead costs relate to the truck wheels product line because of its complexity. He therefore develops the following three activity cost pools and related cost drivers to better understand these costs. Expected Use of Cost Drivers 1,000 setups 70,000 labor hours 1,200 inspections Estimated…
Given the following cost and activity observations for George Company’s utilities, use the high-low method to determine George’s variable utilities cost per machine hour. Cost Machine Hours May $16,500 105,000 June 18,000 120,000 July 16,000 100,000 August 17,500 117,000 a. $10.00 b. $0.10 c. $100.00 d. $1.00
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Fantastic29 Cleapers owns and operates a large automatic laundry facility in Winchester. The company expects to process 8,100 loads of laundry in June and to collect an average of $6.20 per load processed. The following table provides data concerning the company's costs: Cost per Load of Laundry $ 0.60 $ 0.15 $ 0.40 $0.08 Detergents and Softeners. Equipment Maintenance Staff Compensation $ 4,300 $ 1,200 $ 8,100 $ 2,000 Administrative Expenses $1,500 $ 0.04 For example, utilities costs are $1,200 per month plus $0.08 per load of laundry. Utilities Equipment Depreciation Facility Lease The actual operating results for June are as follows: Fantastic29 Cleaners Income Statement For the Month Ended June 30 Actual loads processed Revenue Expenses: Fixed Cost per Month Detergents and Softeners Equipment Maintenance Staff Compensation Utilities Equipment Depreciation ( Facility Lease Administrative Expenses Total expense Net operating income 8,200 $ 52,320 5,360 1,455 7,900 1,018 8,100 2,200…
Problem 5A-8 (Algo) High-Low Method; Predicting Cost [LO5-10] Nova Company's total overhead cost at various levels of activity are presented below: Total Overhead Cost $ 170,500 $ 148,000 Month April May June July Machine-Hours 46,000 36,000 56,000 66,000 Assume the total overhead cost above consists of utilities, supervisory salaries, and maintenance. The breakdown of these costs at the 36,000 machine-hour level of activity is: Utilities (variable) Supervisory salaries (fixed) Maintenance (mixed) Total overhead cost $ 193,090 $ 215,500 Nova Company's management wants to break down the maintenance cost into its variable and fixed cost elements. Required 1 Required: 1. Estimate how much of the $215,500 of overhead cost in July was maintenance cost. (Hint: To do this, it may be helpful to first determine how much of the $215,500 consisted of utilities and supervisory salaries. Think about the behavior of variable and fixed costs.) 2. Using the high-low method, estimate a cost formula for…
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MC.18.50 MC.18.60 MC.18.70 MC.18.81 Hide or show questions Progress:3/5 items Kaumajet Factory produces two products: table lamps and desk lamps. It has two separate departments: Fabrication and Assembly. The factory overhead budget for the Fabrication Department is $550,000, using 500,000 direct labor hours. The factory overhead budget for the Assembly Department is $400,000, using 80,000 direct labor hours. If a table lamp requires 2 hours of fabrication and 1 hour of assembly, the amount of factory overhead that Kaumajet Factory will allocate to each unit of table lamp using the multiple production department factory overhead rate method with an allocation base of direct labor hours is
Exercise 6-50 (Algo) Two-Stage Cost Allocation and Predetermined Rates (LO 6-1, 2, 3) Tacoma Accessories makes two laptop cases, Plastic and Leather, that require direct materials, direct labor, and overhead. The following data refer to operations expected for next quarter: Revenue Direct material Direct labor Overhead: Material handling overhead Fabrication overhead Plastic $ 560,000 260,000 140,000 a. Material handling predetermined rate b. Fabrication predetermined rate Leather $ 580,000 340,000 120,000 c. Total overhead (Plastic) d. Total overhead (Leather) Total $ 1,140,000 Required: a. Compute the material handling overhead rate for next quarter. b. Compute the fabrication overhead rate for next quarter. c. What is the total overhead allocated to the Plastic case next quarter? d. What is the total overhead allocated to the Leather case next quarter? Tacoma uses a two-stage cost allocation system: It uses direct-material costs to allocate material handling overhead and direct-…