ACC 312 Lecture Notes - Lecture 8: Contribution Margin, Balanced Scorecard, Cost Driver

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viridianraven17

19 Dec 2017

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Chapter 11: flexible budgeting and analysis of overhead costs. Flexible budget: a budget that is valid for a range of activity. Static budget: a budget that is valid for only one planned activity level. Total budgeted monthly overhead cost = (budgeted variable overhead cost per. Activity unit * total activity units) + budgeted fixed-overhead cost per month. Actual variable overhead - (aq * svr) (aq * avr) - (aq * svr) (aq * svr) - (sq * svr) Fixed-overhead budget variance: actual fixed overhead - budgeted fixed overhead. Fixed-overhead volume variance = budgeted fixed overhead - applied fixed. Applied fixed overhead = predetermined fixed overhead rate * standard allowed. Overhead cost performance report: a report showing the actual and flexible-budget. Activity level (quantity of the activity measure) cost levels for each overhead item, together with variable-overhead spending and efficiency variances and fixed-overhead budget variances than on a single, volume-based cost driver.

Related Questions

The standard cost card for the single product manufactured by Cutter, Inc., is given below:

Inputs	(1) Standard Quantity or Hours	(2) Standard Price or Rate			Standard Cost (1) Ã (2)
Direct materials	4.2 yards	$	5.00	per yard	$	21.00
Direct labor	0.8 hours	$	15.00	per hour		12.00
Variable overhead	0.8 hours	$	1.50	per hour		1.20
Fixed overhead	0.8 hours	$	5.00	per hour		4.00
Total standard cost per unit					$	38.20

Manufacturing overhead is applied to production on the basis of standard direct labor-hours. During the year, the company worked 8,760 hours and manufactured 10,700 units of product. Selected data relating to the companyâs fixed manufacturing overhead cost for the year are shown below:

Actual Fixed Overhead		Budgeted Fixed Overhead		Fixed Overhead Applied to Work in Process

$42,000		?		? hours Ã $? per hour = $?
	Budget variance, $?		Volume variance, $1,800 F

Required:

1. What were the standard hours allowed for the yearâs production?

2. What was the amount of budgeted fixed overhead cost for the year?

3. What was the fixed overhead budget variance for the year? (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.)

4. What denominator activity level did the company use in setting the predetermined overhead rate for the year?

limellama64

Alden Company uses a two-variance analysis for overheadvariances. Practical capacity is defined as 36 setups and 36,000machine hours to manufacture 7,200 units for the year. Selecteddata for 2016 follow: Budgeted fixed factory overhead: Setup $57,600 Other 265,000 $ 322,600 Total factory overhead incurred $494,000 Variable factory overhead rate: Per setup $ 650 Per machinehour $ 4 Total standard machine hours allowed for the unitsmanufactured 24,000 hours Machine hours actually worked 28,000hours Actual total number of setups 32 Assume that the company usesonly machine hours as the activity measure to apply both variableand fixed overhead, and that it includes all setup costs asvariable factory overhead. What is the (a) overhead spendingvariance, (b) efficiency variance, and (c) flexible-budget variancefor the year?

erinmuskrat122

Weller Company's variable manufacturing overhead should be $1.10per standard machine-hour and its fixed manufacturing overheadshould be $24,633 per month. The following information is availablefor a recent month:

a.	The denominator activity of 7,140 machine-hours was chosen tocompute the predetermined overhead rate.
b.	At the 7,140 standard machine-hours level of activity, the companyshould produce 3,400 units of product.
c.	The company%u2019s actual operating results were as follows:


Number of units produced		4,680
Actual machine-hours		8,040
Actual variable manufacturing overhead cost	$	10,050
Actual fixed manufacturing overhead cost	$	26,900

Required:

1.	Compute the predetermined overhead rate and break it down intovariable and fixed cost elements.(Round your answers to2 decimal places. Omit the "$" sign in yourresponse.)


Predetermined overhead rate	$	per MH
Variable element	$	per MH
Fixed element	$	per MH

2.	What were the standard hours allowed for the year%u2019s actualoutput? (Round yourintermediate calculations to 2 decimal places.)

Standard hours

MHs

Compute the variable overhead rate and efficiency variances and thefixed overhead budget and volume variances. (Input all amounts aspositive values. Indicate the effect of each variance by selecting"F" for favorable, "U" for unfavorable, and "None" for no effect(i.e., zero variance). Round your intermediate calculations andfinal answers to 2 decimal places. Omit the "$" sign in yourresponse.)


Variable overhead rate variance	$	(Click toselect)FUNone
Variable overhead efficiency variance	$	(Click toselect)FUNone
Fixed overhead budget variance	$	(Click toselect)FUNone
Volume variance	$	(Click toselect)FUNone

taupeeagle297

ACC 312 Lecture Notes - Lecture 8: Contribution Margin, Balanced Scorecard, Cost Driver

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