Activity-based costing, batch-level variance analysis. Audrina\'s Fleet Feet, In
ID: 2424200 • Letter: A
Question
Activity-based costing, batch-level variance analysis. Audrina's Fleet Feet, Inc., produces dance shoes for stores all over the world. While the pairs of shoes are boxed individually, they are crated and shipped in batches. The shipping department records both variable direct batch-level costs and fixed batch-level overhead costs. The following information pertains to shipping department costs for 2014. What is the static budget number of crates for 2014? What is the flexible budget number of crates for 2014? What is the actual number of crates shipped in 2014? Assuming fixed overhead is allocated using crate-packing hours, what is the predetermined fixed overhead allocation rate? For variable direct batch-level costs, compute the price and efficiency variances. For fixed overhead costs, compute the spending and the production-volume variances.Explanation / Answer
Answer:1 Static budget number of crates = Budgeted pairs shipped / Budgeted pairs per crate
= 225,000/15
= 15,000 crates
Answer:2 Flexible budget number of crates = Actual pairs shipped / Budgeted pairs per crate
= 180,000/15
= 12,000 crates
Answer:3 Actual number of crates shipped = Actual pairs shipped / Actual pairs per box
= 180,000/10
= 18000 crates
Answer:4 Static budget number of hours = Static budget number of crates × budgeted hours per box
= 15,000 × 0.9 = 13,500 hours
Fixed overhead rate = Static budget fixed overhead / static budget number of hours
= $54,000/13,500
= $4.00 per hour
Answer:5
Price variance=(SP-AP)*Actual Hours
=(18-16)*18000 crates*1.1
=39600 F
Efficiency variance=(SH-AH)*SP
=[(12000*0.9)-(18000*1.1)]*$18
=[10800-19800]*18
=162000 U
Answer:6 Spending variance=Actual Fixed overhead-Static Budget fixed overhead
=$56500-$54000
=2500 U
Production volume variance=Budget Hours allowed for actual output*budgeted rate-Static budget Fixed overhead
=(12000*0.9*4)-54000
=10800 U
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.