Chubbs Inc.'s manufacturing overhead budget for the first quarter of 2020 contained the following data.
Actual variable costs were indirect materials $14,900, indirect labor $9,500, utilities $9,000, and maintenance $5,200. Actual fixed costs equaled budgeted costs except for property taxes and insurance, which were $8,300. The actual activity level equaled the budgeted level All costs are considered controllable by the production department manager except for depreciation, and property taxes, and insurance
a) Prepare a manufacturing overhead flexible budget report for the first quarter.
b) Prepare a responsibility report for the first quarter.
Actual variable costs were: indirect materials $15,246, indirectlabor $9,315, utilities $9,022, and maintenance $4,987. Actualfixed costs equaled budgeted costs except for property taxes andinsurance, which were $8,665. The actual activity level equaled thebudgeted level.
All costs are considered controllable by the production departmentmanager except for depreciation, and property taxes andinsurance.
(a) Prepare a manufacturing overhead flexiblebudget report for the first quarter. (List variablecosts before fixed costs.)
LOWELL COMPANY Manufacturing Overhead Flexible Budget Report For the Quarter Ended March 31, 2014
Difference
Budget
Actual
Favorable F Unfavorable U Neither Favorable nor Unfavorable N
(a) Calculate the total cost per direct laborhour at each of the activity levels specified in part (a).(Round answers to 2 decimal places, e.g.10.25.)
Activity level 1
$
Activity level 2
$
Activity level 3
$
(b) The groomers at Rensing normally work a totalof 616 direct labor hours during each month. Each grooming jobnormally takes a groomer 1.30 hours. Milo wants to earn a profitequal to 30% of the costs incurred. Determine what he should chargeeach pet owner for grooming. (Round answer to 2 decimalplaces, e.g. 10.25.)
Charge per client
$
Exercise 10-9
Lowell Companyâs manufacturing overhead budget for the firstquarter of 2014 contained the following data.
Variable Costs
Fixed Costs
Indirect materials
$11,004
Supervisory salaries
$35,170
Indirect labor
10,758
Depreciation
6,084
Utilities
7,760
Property taxes and insurance
7,986
Maintenance
5,575
Maintenance
5,566
Actual variable costs were: indirect materials $15,083, indirectlabor $9,497, utilities $9,235, and maintenance $5,111. Actualfixed costs equaled budgeted costs except for property taxes andinsurance, which were $8,225. The actual activity level equaled thebudgeted level.
All costs are considered controllable by the production departmentmanager except for depreciation, and property taxes andinsurance.
(a) Prepare a manufacturing overhead flexiblebudget report for the first quarter. (List variablecosts before fixed costs.)
LOWELL COMPANY Manufacturing Overhead Flexible Budget Report For the Quarter Ended March 31, 2014
Difference
Budget
Actual
Favorable F Unfavorable U Neither Favorable nor Unfavorable N
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Exercise 10-14
The Mixing Department manager of Malone Company is able tocontrol all overhead costs except rent, property taxes, andsalaries. Budgeted monthly overhead costs for the MixingDepartment, in alphabetical order, are:
Indirect labor
$12,870
Property taxes
$1,150
Indirect materials
7,980
Rent
1,840
Lubricants
2,600
Salaries
11,860
Maintenance
3,820
Utilities
6,550
Actual costs incurred for January 2014 are indirect labor $13,970;indirect materials $14,070; lubricants $2,070; maintenance $3,820;property taxes $2,050; rent $1,840; salaries $11,860; and utilities$6,540.
Prepare a responsibility report for January 2014.
MALONE COMPANY Mixing Department Responsibility Report For the Month Ended January 31, 2014
Difference
Controllable Costs
Budget
Actual
Favorable F Unfavorable U Neither Favorable nor Unfavorable N
Deitz Inc. has three divisions which are operated as profitcenters. Actual operating data for the divisions listedalphabetically are as follows.
Compute the missing amounts. Show computations.
Operating Data
Womenâs Shoes
Menâs Shoes
Childrenâs Shoes
Contribution margin
$266,000
$
(3)
$191,520
Controllable fixed costs
106,400
(4)
(5)
Controllable margin
(1)
95,760
101,080
Sales
638,400
478,800
(6)
Variable costs
(2)
340,480
266,000
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Prepare a responsibility report for the Womenâs Shoes Divisionassuming (1) the data are for the month ended June 30, 2014, and(2) all data equal budget except variable costs which are $10,640over budget.
DEITZ INC. Womenâs Shoe Division Responsibility Report For the Month Ended June 30, 2014
Difference
Budget
Actual
Favorable F Unfavorable U Neither Favorable nor Unfavorable N
The Pletcher Transportation Company uses a responsibilityreporting system to measure the performance of its three investmentcenters: Planes, Taxis, and Limos. Segment performance is measuredusing a system of responsibility reports and return on investmentcalculations. The allocation of resources within the company andthe segment managersâ bonuses are based in part on the resultsshown in these reports.
Recently, the company was the victim of a computer virus thatdeleted portions of the companyâs accounting records. This wasdiscovered when the current periodâs responsibility reports werebeing prepared. The printout of the actual operating resultsappeared as follows.
Determine the missing pieces of information below.(Round intermediate calculations and final answer to 0decimal places, e.g. 1,255.)
Cresline Pipe had the following static budget and overhead costsfor March. Manufacturing overhead is budgeted based on direct laborhours (DLH). Direct labor is budgeted at 12 minutes per linear foot(LF).
Instructions:
1. Prepare a flexible manufacturing overhead budget based on thefollowing amounts produced.
a) 115,500 LF
b) 116,500 LF
c) 117,500 LF
d) 118,500 LF
e) 119,500 LF
2. Prepare a flexible budget report showing the differences(favorable and unfavorable) in manufaturing overhead costs for themonth of March. Include your analysis of what varianecs should beinvestigated further.
3. Prepare a responsibility report for the manufacturingoverhead for March, assuming only variable costs are controllable.Provide a brieg evaluation of how this information could be used tomeasure the maufacturing manager's performance.
