Breakeven Fixed costs $260‚000.00 = ---------------------------------- = ---------------------- = 13‚326 units number of units Unit contribution margin $19.51 UCM (Unit Contribution margin) = USP (Unit Selling Price) UVC (Unit Variable Costs) = = $48.00 - $28.49 = $19.51 USP = Sales / Units sold = $864‚000.00/18‚000 = $48.00 UVC = Total variable costs / Units produced = $512‚800.00/18‚000 =$28.49 Conclusion: The company should produce‚
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possible reasons for each of the variance arising 10 4. Write a brief note outlining the advantages and disadvantages 13 of using variance analysis as a means of controlling a business Question 1. Calculation of Standard Cost per unit for each of the products. Part 1 : Standard Cost of Deluxe Model : ₤430.20/unit Working : Deluxe Model Glass Wood Direct Material/unit 102.40 179.00 Skilled Unskilled Direct Labor 105.60 43.20 Total
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specification‚ and therefore each product is unique. Process costing can not be used under our present set-up. Possible reasons for cost differences between actual and standard costs under Conley’s system: a. Materials Price and Usage Differences b. Labor Rate Differences c. Labor Efficiency Difference d. Production Volume Difference Standard Cost are usually develop from previous year’s experiences and some adjustments from each department’s managers If our product’s sales volume is seasonal
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contribution report is replaced with a flexible budget column. * The variances in the contribution report are recomputed as the difference between the flexible budget and actual columns. Answer Particulars | Static Budget | Flexible Budget | Actual | Variance | Unit (pounds) | 200000 | 225000 | 225000 | 0 | Revenue | 1600000 | 1800000 | 1777500 | 22500 U | Direct Material | 290000 | 326250 | 432500 | -106250 U | Direct Labor | 168000 | 189000 | 174000 | 15000 F | Variable Overhead | 324000
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Managerial Accounting Case ‘Waltham Motors Division’ Answer 1: Breakeven point If Waltham Motors Division sells 13‚326 units‚ it will breakeven. But why Waltham incurred net losses when it sold more than 13‚326 units in May? The unfavorable cost variances (see answer 2 and 3) and Waltham’s high operating leverage were major reasons for its financial problems. Waltham’s operating leverage is 3.85 times‚ which indicates that the operating income is very sensitive to changes in sales. Answer 2: Total
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ACC3320 Accounting for Decision Making Final Exam 1. Riggs Enterprise’s flexible budget cost formula for indirect materials‚ a variable cost‚ is $0.45 per unit of output. If the company’s performance report for last month shows a $90 favorable variance for indirect materials and if 8‚700 units of output were produced last month‚ then the actual costs incurred for indirect materials for the month must have been: A. $4‚005 B. $3‚915 C. $3‚825 D. $3‚735 2. Chmielewski Medical Clinic measures
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Exam II I. TRUE / FALSE 1. A budget generally includes both financial and nonfinancial aspects of the plan. 2. The revenues budget should be based on the production budget. 3. A favorable variance should be ignored by management. 4. The direct manufacturing labor price variance is likely to be unfavorable if lower-skilled workers are put on a job. 5. For fixed overhead costs‚ the flexible-budget amount is always the same as the static-budget amount. II. MULTIPLE CHOICE
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COMPREHENSIVE PROBLEM 6 Utease Corporation 60 Strong This problem covers various topics from Chapters 22‚ 23‚ 24‚ and 25. Students are asked to prepare budget schedules‚ calculate variances‚ determine possible causes for differences between budgeted and actual results‚ and to perform ROI analysis. Copyright © 2015 by McGraw-Hill Education All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. 60 Minutes‚ Strong COMPREHENSIVE PROBLEM 6
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Week 4 Assignment from Textbook: Chapter 23 & 24 Esther Tate ACC/400 July 26‚ 2015 Theresa Pekron Brief Exercise 23.6 – Elements of the Budget Identify the budgets in Column B from which dollar amounts are transferred directly in constructing the budgets listed in Column A: 1. Budgeted income statement a. Direct materials budget 2. Budgeted balance sheet b. Cost of goods sold budget 3. Cash flow budget c. Production budget 4. Cost of goods sold budget d. Payables budget 5. Production
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ACCOUNTING 569 MIDTERM 1 FALL 1995 NAME ______________________ ID # I. 15 Points 1. Otis Corp. has the following data: Selling price $50/unit Variable manufacturing costs $20/unit Fixed costs: Manufacturing $100‚000 Selling and admin. $ 50‚000 a.(3 points) The breakeven point is: b.(3 points) Given a volume of 15‚000 units‚ operating leverage is: c.(4 points)
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