The following report explains the significance and reasons for the variances in New Look Jacket’s 2012 detailed variance report and provides a draft operating budget for 2013. Analysis of Variances The sales price variance is zero‚ meaning the average price New Look Jackets sold products was the same as the budgeted sales price. The sales mix variance is unfavourable for Nylon Jackets and favourable for Leather Jackets as the demand for leather jackets were unexpectedly high in 2012 and as a result
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expenses by the same dollar amount. increasing average operating assets and operating expenses by the same dollar amount. increasing sales revenue and operating expenses by the same percentage. decreasing average operating assets and sales by the same percentage. 2. (TCO D) Given the following data‚ what would ROI be? Sales $50‚000 Net operating income $5‚000 Contribution margin $20‚000 Average operating assets $25‚000 Stockholder’s equity $15
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direct labour‚ variable and fixed manufacturing overhead acceptable quality level (AQL) the defect rate at which total quality costs are minimised account classification method (or account analysis) the process in which managers use their judgement to classify costs as fixed‚ variable or semivariable costs accounting rate of return (or simple rate of return‚ rate of return on assets‚ unadjusted rate of return or return on investment (ROI)) the average annual profit from a project‚ divided by the initial
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BUGETARY CONTROL MEANING AND NEED FOR BUDGET A budget is prepared to have effective utilisation of funds and for the realisation of objectives as efficiently as possible. Budgeting is a powerful tool to the management for performing its functions efficiently. The Chartered Institute of Management Accountants‚ ENGLAND defines budget as under‚ A plan quantified in monetary terms prepared and approved prior to a defined period of time usually
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| Construct the Variable Costing Income Statement Year 1 Sales $111‚000 Variable expenses: Variable cost of goods sold Variable selling and administrative expenses - 0 Contribution margin (.65*111000) - 72150 Fixed expenses: Fixed manufacturing overhead Fixed selling and administrative expenses - $64‚000 Net operating income = $8‚150 | | | | Points Received: | 45 of 45 | | Comments: | | | | 2. | Question : | Babb Company is a manufacturing firm that uses job-order costing
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management of the company has decided to adopt the activity-based costing system and has identified three activity cost pools. Information on its annual overhead costs and the activity cost pools are as follows: Activity cost pools (rate of consumption) Overhead Leather Insole Other Total costs cutting fabrication Production overhead RM240‚000 35% 45% 20% 100% Office expense RM160‚000 15% 55% 30% 100% The “Other”
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statements 3 Process cost reports: 1) 2) 3) Quantity statement (also called production statement) Production cost statement Cost allocation statement (also called allocation statement) Process costing – methods of stock valuation -The weighted average method -FIFO-method “What’s the difference?” Process costing – methods of stock valuation 1. QUANTITY STATEMENT FIFO: Opening work in process (units) kept separate from units started and completed in the current period. WAM: All units completed
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Static Budget (A) 10‚000 units Actual Results (B) 16‚000 units Static Budget Variance (A) – (B) Revenue Variable costs: Materials Labor Overhead Total Contribution margin Fixed costs: Manufacturing Overhead Marketing costs Total fixed costs Operating income $40 15 10 5 30 $10 $400‚000 150‚000 100‚000 50‚000 300‚000 100
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manufacturing overhead costs listed above for September is: $351‚000 $40‚000 $71‚000 $669‚000 2. award: 4 out of 4.00 points The total of the product costs listed above for September is: $669‚000 $351‚000 $71‚000 $318‚000 3. award: 4 out of 4.00 points Freeman Company uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs. At the beginning of the year‚ the company estimated manufacturing overhead would
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Harvard Business School 9-187-107 Rev. November 4‚ 1998 John Deere Component Works (A) The phone rang in the office of Keith Williams‚ manager of Cost Accounting Services for Deere & Company. On the line was Bill Maxwell‚ accounting supervisor for the Gear and Special Products Division in Waterloo‚ Iowa. The division had recently bid to fabricate component parts for another Deere division. Maxwell summarized the situation: They’re about to award the contracts‚ and almost all of the work
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