Question
need help with question act 8-1
all of the problems. thanks
·??_auber unsed msnufacturing overhead tim labor usage variance 8-298 Competing most of Bartne Products -rereryingto piece together the company the following data standard materials quantity per unit Standard materiairs price Standard labor quantity per unit Standard labor price Actual number of products produced Materials price variance Materials usage variance Labor price variance Labor usage variance ual amount of materials used. Delermnn the actual price per pound paid for materials. Determine the actual labor hours used. d. Determine the actual labor price per hour ANALYZE, THINK, COMMUNICATE ???6-1 Anthony soend bonus that he had expected, he told his wife, "This is the 240.000. The company lost money and gave me a b labor as was called for budget Business Applications Case tie versus flexible budget variances Sta manufacturing production supervisor for Green Bottle vw less-steel water bottles. Trying to explain why he did not get the dumbes t place 1 set up this budget assuming it would sell 250,000 units n the budget. This year, the company has the same 250,000 units goal worked, Well, it sold only bonus for not using as much materials and and sme I used more materials and labor than was budgeted. They said the ny's making all kinds of money. You'd think I'd get this big fat bonus sd would have made a lot more money if I'd stayed within GBW's master budget and the actual results for the most recent year of operating activ ea lot more money if I'd stayed within my budget. I guess I gotta wait company would for another bad year before I get a bonus. Like I said, this is the dumbest place 1 ever worked a ity follow. Master Budget Actual Results Variances For Number of units Sales revenue 250,000 $3,750,000 260,000 10,000 $3,950,000 $200,000 Variable manufacturing costs Materials Labor Overhead (600,000(622,200) 22,200 (312,500) (337,500) (321,000) (354,700) 7,200 U 8,500 U Variable selling, general, (475,000) (501,300) 26,300 U 2,025,000 and admin. costs 2,150,800 125,800 F (1275,000) (1,273,100) ,900F Selling, general, and admin. costs 470.000 (479,300) 9.300 U Contribution margin Fixed costs Manufacturing overhead S 280,000 280,000 398.,400 398400 $118,400 F Net income
Explanation / Answer
1. GBW has increased sales not by cutting selling price, infact it has increased the selling price and sale volume also has increased
2. Yes, Master budget and Actuals cannot be compared for variance analysis. Flexible budget should be used to compare the actual results and variance to be computed between flexible budget and actual results
3. Refer workings
4. Manufacturing overhead is based on the quantity manufactured, the unit rate of overhead has decreased with increase in production
Hence he is not responsible for the material price variance
6. Overall labour variance is favourable. Hence if price is unfavourable, usage variance is favourable.
7. Fixed cost volumevariance
Master budget Per unit cost Flexible budget Actuals Variances recomputed Fav/ Unfav Sales volume 250,000 260000 260,000 Sales revenue 3,750,000 3,900,000 3,950,000 50,000 Fav Selling price per unit 15.00 15.00 15.19 Variable Manufacturing cost Material 600,000 2 624,000.00 622,200 1,800.00 Fav Labour 312,500 1 325,000.00 321,000 4,000.00 Fav Overhead 337,500 1 351,000.00 354,700 - 3,700.00 Un Fav Variable selling and general admin cost 475,000 2 494,000.00 501,300 - 7,300.00 Un Fav Contribution 2,025,000 2,106,000 2,150,800 - 44,800 Fav Fixed cost Manu overhead 1,275,000 1,275,000 1,273,100 1,900 Fav Selling and general admin cost 470,000 470,000 479,300 -9,300 Un Fav Net Income 280,000 398,400 - 37,400 Fav
