Do It! Review 22-2 Mussatto Company expects to produce 48,240 units of product I
ID: 2417364 • Letter: D
Question
Do It! Review 22-2
Mussatto Company expects to produce 48,240 units of product IOA during the current year. Budgeted variable manufacturing costs per unit are direct materials $7, direct labor $12, and overhead $19. Annual budgeted fixed manufacturing overhead costs are $94,980 for depreciation and $49,140 for supervision.
In the current month, Mussatto produced 5,790 units and incurred the following costs: direct materials $37,934, direct labor $67,685, variable overhead $118,515, depreciation $7,915, and supervision $4,334.
Prepare a flexible budget report. (List variable costs before fixed costs.)
Mussatto Company
Manufacturing Flexible Budget Report
Difference
Budget
Actual
Favorable (F)
Unfavorable (U)
Neither Favorable
nor Unfavorable (N)
Were costs controlled?
Do It! Review 23-1
Jacque Company accumulated the following standard cost data concerning product I-Tal.
Compute the standard cost of one unit of product I-Tal. (Round answer to 2 decimal places, e.g. 2.75.)
Do It! Review 23-2
The standard cost of product 777 includes 2.40 units of direct materials at $6.10 per unit. During August, the company bought 29,700 units of materials at $6.18 and used those materials to produce 12,600 units.
Compute the total, price, and quantity variances for materials.
Do It! Review 23-3 (part level submission)
The standard cost of product 5252 includes 1.40 hours of direct labor at $16.00 per hour. The predetermined overhead rate is $21.00 per direct labor hour. During July, the company incurred 4,000 hours of direct labor at an average rate of $15.93 per hour and $80,500 of manufacturing overhead costs. It produced 2,700 units.
(a)
Mussatto Company
Manufacturing Flexible Budget Report
Difference
Budget
Actual
Favorable (F)
Unfavorable (U)
Neither Favorable
nor Unfavorable (N)
$
$
$
FUN
DepreciationDirect LaborDirect MaterialsFixed CostsOverheadSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUnits ProducedVariable CostsFUN
DepreciationDirect LaborDirect MaterialsFixed CostsOverheadSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUnits ProducedVariable CostsFUN
DepreciationDirect LaborDirect MaterialsFixed CostsOverheadSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUnits ProducedVariable CostsFUN
DepreciationDirect LaborDirect MaterialsFixed CostsOverheadSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUnits ProducedVariable Costs DepreciationDirect LaborDirect MaterialsFixed CostsOverheadSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUnits ProducedVariable CostsFUN
DepreciationDirect LaborDirect MaterialsFixed CostsOverheadSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUnits ProducedVariable CostsFUN
DepreciationDirect LaborDirect MaterialsFixed CostsOverheadSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUnits ProducedVariable CostsFUN
DepreciationDirect LaborDirect MaterialsFixed CostsOverheadSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUnits ProducedVariable Costs$
$
$
FUN
Explanation / Answer
Standard cost per unit
Material price variane = (6.10 - 6.18)29,700 = 2376(U)
Material quantity variance = (2.40*12,600 - 29,700)6.10
= 3294(F)
total material variance = 918(F)
Labor price variance = (16-15.93)4000 = 280(F)
Efficiency variance = (1.4 *2700 - 4000)16
= $3,520(U)
Total variance = 3,240(U)
Flexible budget Actual F/U Variable cost Direct materials $40,530 $37,934 2,596(F) Direct labor 69,480 67,685 1,795(F) Variable overhead 110,010 118,515 8,505(U) total variable cost $220,020 224,134 4114(U) Fixed cost Depreciation $94,980 $7,915 $87,065(F) Supervision 49,140 4,334 44,806(F) total cost 364,140 236,383 $127,757(F)Related Questions
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