Comprehensive Problem 5 Part C: Note: This section is a continuation from Parts

Question

Comprehensive Problem 5
Part C:

Note: This section is a continuation from Parts A and B of the comprehensive problem. Be sure you have completed Parts A and B before attempting Part C. You may have to refer back to data presented in Parts A and B as well as use answers from those parts when completing this section.

Part C—August Variance Analysis

The prices of the materials were different than standard due to fluctuations in market prices. The standard quantity of materials used per case was an ideal standard. The Mixing Department used a higher grade labor classification during the month, thus causing the actual labor rate to exceed standard. The Filling Department used a lower grade labor classification during the month, thus causing the actual labor rate to be less than standard.

Required:

10. Determine and interpret the direct materials price and quantity variances for the three materials. Enter the costs in dollars and cents (carried to three decimal places when required). Enter all amounts as positive numbers.

Enter the standard price to two decimal places.

11. Determine and interpret the direct labor rate and time variances for the two departments. Round hours to the nearest hour. Enter the costs in dollars and cents. Enter all amounts as positive numbers.

12. Determine and interpret the factory overhead controllable variance. Enter all amounts as positive numbers.

13. Determine and interpret the factory overhead volume variance. When determining the fixed factory overhead rate, round your answer to two decimal places (and use that rounded rate when calculating factory overhead volume variance). Enter all amounts as positive numbers.

Direct Materials Price Variance: Cream Base Natural Oils Bottles Actual price $ $ $ Standard price Difference $ $ $ Actual quantity (units) X ozs. X ozs. X btls. Direct materials price variance $ $ $ Indicate if favorable or unfavorable SelectFavorableUnfavorableItem 16 SelectFavorableUnfavorableItem 17 SelectFavorableUnfavorableItem 18

Explanation / Answer

contribution margin per case. = 100 - (17+7.20 + 20 + 0.20)

contribution margin per case. = $ 55.60

Break-even number of cases per month = Total fixed Cost/ Contribution margin per unit

Break-even number of cases per month = 19460/55.60

Break-even number of cases per month = 350 Cases

9)

Break Even Analysis 2014 Case Production Utility Total Cost January 500 $600.00 February 800 $660.00 March 1200 $740.00 April 1100 $720.00 May 950 $690.00 June 1025 $705.00 Question 1 At High Point At Low Point Variable Cost per Unit 0.20 0.20 Total Fixed Cost 500 500 Total Cost 740 600 Question 2 Determine the contribution margin per case.

contribution margin per case. = 100 - (17+7.20 + 20 + 0.20)

contribution margin per case. = $ 55.60

Question 3 Utilities Cost 500 Facility Lease 14000 Equipment Depreciation 4300 Supplies 660 Total Fixed Costs 19460 Question 4 Determine the break-even number of cases per month.

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