/*! This file is auto-generated */ .wp-block-button__link{color:#fff;background-color:#32373c;border-radius:9999px;box-shadow:none;text-decoration:none;padding:calc(.667em + 2px) calc(1.333em + 2px);font-size:1.125em}.wp-block-file__button{background:#32373c;color:#fff;text-decoration:none} Q15E Office Plus sells its main produ... [FREE SOLUTION] | 91影视

91影视

Log out

Learning Materials

Features

Discover

Chapter 23: Q15E (page 1309)

Office Plus sells its main product, ergonomic mouse pads, for \(13 each. Its variable cost is \)5.10 per pad. Fixed costs are \(205,000 per month for volumes up to 65,000 pads. Above 65,000 pads, monthly fixed costs are \)250,000. Prepare a monthly flexible budget for the product, showing sales revenue, variable costs, fixed costs, and operating income for volume levels of 45,000, 55,000, and 75,000 pads.

Short Answer

Expert verified

The flexible budget for office plus is prepared with volume levels of 45,000, 55,000 and 75,000 pads.

Step by step solution

01

Definition of flexible budget

A flexible budget is a budget prepared by the company's management that adjusts with any variations in the the activity.

02

Preparation of flexible budget

Flexible Budget

Particulars

Per unit ($)

45,000 ($)

55,000 ($)

75,000 ($)

  1. Sales

13.00

585,000

715,000

975,000

  1. Variable cost

5.10

229,500

280,500

382,500

  1. Contribution Margin

7.90

355,500

434,500

592,500

  1. Fixed Cost

205,000

205,000

250,000

  1. Income/(loss) (C 鈥� D)

150,500

229,500

342,500

Unlock Step-by-Step Solutions & Ace Your Exams!

  • Full Textbook Solutions

    Get detailed explanations and key concepts

  • Unlimited Al creation

    Al flashcards, explanations, exams and more...

  • Ads-free access

    To over 500 millions flashcards

  • Money-back guarantee

    We refund you if you fail your exam.

Over 30 million students worldwide already upgrade their learning with 91影视!

One App. One Place for Learning.

All the tools & learning materials you need for study success - in one app.

Get started for free

Most popular questions from this chapter

What is a variance?

McCarthy Fender, which uses a standard cost system, manufactured 20,000 boat fenders during 2018. The 2018 revenue and cost information for McCarthy follows:

Sales Revenue \( 1,300,000

Cost of Goods Sold (at standard) 196,800

Direct materials cost variance 7,150 F

Direct materials efficiency variance 5,950 U

Direct labor cost variance 400 U

Direct labor efficiency variance 530 F

Variable overhead cost variance 650 U

Variable overhead efficiency variance 360 F

Fixed overhead cost variance 2,350 U

Fixed overhead volume variance 4,410 U

Assume each fender produced was sold for the standard price of \)65, and total selling and administrative costs were $250,000. Prepare a standard cost income statement for 2018 for McCarthy Fender

Computing standard cost variances and reporting to management

Hear Smart manufactures headphone cases. During September 2018, the company produced and sold 105,000 cases and recorded the following cost data:

Standard Cost Information

Quantity

Cost

Direct Materials

2 parts

\( 0.15 per part

Direct Labor

0.02 hours

8.00 per hour

Variable Manufacturing Overhead

0.02 hours

10.00 per hour

Fixed Manufacturing Overhead (\)28,500 for static budget volume of

95,000 units and 1,900 hours, or \(15 per hour)

Actual Cost Information

Direct Materials (209,000 parts @ \)0.20 per part) \( 41,800

Direct Labor (1,600 hours @ \)8.15 per hour) 13,040

Variable Manufacturing Overhead 9,000

Fixed Manufacturing Overhead 26,000

Requirements

1. Compute the cost and efficiency variances for direct materials and labor.

2. For manufacturing overhead, compute the variable overhead cost and efficiency variances and the fixed overhead cost and volume variances.

3. Hear Smart鈥檚 management used better quality materials during September. Discuss the tradeoff between the two direct material variances.

Question:List the direct materials variances, and briefly describe each.

Question:Mills, Inc. is a competitor of Murry, Inc. from Exercise E23颅18. Mills also uses a standard cost system and provides the following information:

Static budget variable overhead \( 1,200

Static budget fixed overhead \) 1,600

Static budget direct labor hours 800 hours

Static budget number of units 400 units

Standard direct labor hours 2 hours per unit

Mills allocates manufacturing overhead to production based on standard direct labor hours. Mills reported the following actual results for 2018: actual number of units produced, 1,000; actual variable overhead, \(4,000; actual fixed overhead, \)3,100; actual direct labor hours, 1,600.

Requirements

1. Compute the variable overhead cost and efficiency variances and fixed overhead cost and volume variances.

2. Explain why the variances are favorable or unfavorable
See all solutions

Recommended explanations on Business Studies Textbooks

Nature of Business

Read Explanation

Insurance

Read Explanation

Intermediate Accounting

Read Explanation

Managers

Read Explanation

Strategic Analysis

Read Explanation

Organizational Communication

Read Explanation
View all explanations

What do you think about this solution?

We value your feedback to improve our textbook solutions.

Study anywhere. Anytime. Across all devices.