Financial Analysis Mastery: Tips for Top Grades
43. 8-23 Variable manufacturing overhead variance analysis. The Sourdough Bread Company bakes...
8-23 Variable manufacturing overhead variance analysis. The Sourdough Bread Company bakes baguettes for distribution to upscale grocery stores. The company has two direct-cost categories: direct materials and direct manufacturing labor. Variable manufacturing overhead is allocated to products on the basis of standard direct manufacturing labor-hours. Following is some budget data for the Sourdough Bread Company: Direct manufacturing labor use 0.02 hours per baguette Variable manufacturing overhead $10.00 per direct manufacturing labor-hour The Sourdough Bread Company provides the following additional data for the year ended December 31, 2017: Planned (budgeted) output 3,100,000 baguettes Actual production 2,600,000 baguettes Direct manufacturing labor 46,800 hours Actual variable manufacturing overhead $617,760 1. What is the denominator level used for allocating variable manufacturing overhead? (That is, for how many direct manufacturing labor-hours is Sourdough Bread budgeting?) 2. Prepare a variance analysis of variable manufacturing overhead. Use Exhibit 8-4 (page 304) for reference. 8-24 Fixed manufacturing overhead variance analysis The Sourdough Bread Company also allocates fixed manufacturing overhead to products on the basis of standard direct manufacturing labor-hours. For 2017, fixed manufacturing overhead was budgeted at $3 per direct manufacturing labor-hour. Actual fixed manufacturing overhead incurred during the year was $294,000 1. Prepare a variance analysis of fixed manufacturing overhead cost. Use Exhibit 8-4 (page 304) as a guide. 2. Is fixed overhead underallocated or overallocated? By what amount?
44. Presented below are selected transactions for Corbin Company for 2011.Jan. 1 Received $9,000 scrap..
Presented below are selected transactions for Corbin Company for 2011.Jan. 1 Received $9,000 scrap value on retirement of machinery that was purchased on January 1, 2000. The machine cost $90,000 on that date, and had a useful life of 10 years with no salvage value.April 30 Sold a machine for $28,000 that was purchased on January 1, 2008. The machine cost $75,000, and had a useful life of 5 years with no salvage value.Dec. 31 Discarded a business automobile that was purchased on April 1, 2007. The car cost $32,000 and was depreciated on a 5-year useful life with a salvage value of $2,000View Solution:
Presented below are selected transactions for Corbin Company for
45. Gallop Corporation prepared the following report for the first quarter of this year:...
Gallop Corporation prepared the following report for the first quarter of this year: |
Sales (2,400 units @ $2,700 per unit) | $ | 6,480,000 | ||
Less: Cost of goods sold | 3,232,000 | |||
Gross margin | 3,248,000 | |||
Less: | ||||
Selling expenses | $ | 1,044,000 | ||
Administrative expenses | 1,040,000 | 2,084,000 | ||
Income | $ | 1,164,000 | ||
Gallop’s controller, Nancy Johnstone, studied the costs in detail, particularly focusing on cost behaviour. |
Her analysis revealed the following: | |
Sixty percent of the cost of goods sold was variable with respect to the number of units. | |
Of the selling expenses, $810,000 was fixed; the remaining was variable with respect to the number of units. | |
All of the administrative expenses were fixed. | |
Required: | |
1. | Express the cost of goods sold and the selling expenses in terms of cost equations. (Round the "Variable cost" to 2 decimal places.) |
46. The Great Northern Specific Railway has noncallable, perpetual bonds outstanding. When originally...
The Great Northern Specific Railway has noncallable, perpetual bonds outstanding. When originally issued, the perpetual bonds sold for $955 per bond; today (January 1) their current market price is $1,120 per bond. The company pays a semiannual interest payment of $45 per bond on June 30 and December 31 each year.
a. As of today (January 1), what is the implied semiannual yield on these bonds?
b. Using your answer to Part (a), what is the (nominal annual) yield on these bonds? The (effective annual) yield on these bonds?
1. What are the six core ethical values described by the Josephson Institute? What are some other sources of ethical values?
2. Describe an ethical dilemma. How does a person resolve an ethical dilemma?
3. Why is there a special need for ethical behavior by professionals? Why do the ethical requirements of the CPA profession differ from those of other professions?
4. List the four parts of the Code of Professional Conduct, and state the purpose of each.
48. 2. Mohan purchases a car on hire purchase system. The total cash price of the car is Rs. 15,980,...
2.Mohan purchases a car on hire purchase system. The total cash price of the car is
Rs. 15,980, payable Rs. 4,000 down and in three instalments of Rs. 6,000, Rs. 5,000
and Rs. 2,000 at the end of first, second and third years, respectively. Interest is
charged at 5% per annum. You are required to calculate interest paid by hirer, each
year.
194.Given the following:
Variable cost as a percentage of sales = 60%
Unit Variable cost = $30
Fixed costs = $200,000
What is the break-even point in units?
195.A business had a margin of safety ratio of 20%, variable costs of 75% of sales, fixed costs of $240,000, a break-even point of $960,000, and operating income of $60,000 for the current year. Calculate the current year's sales.
196.For the current year ending January 31, Harp Company expects fixed costs of $188,500 and a unit variable cost of $51.50. For the coming year, a new wage contract will increase the unit variable cost to $55.50. The selling price of $70.00 per unit is expected to remain the same.
(a) | Compute the break-even sales (units) for the current year. |
(b) | Compute the anticipated break-even sales (units) for the coming year, assuming the new wage contract is signed. |
197.
(a) | If Swannanoa Company's budgeted sales are $1,000,000, fixed costs are $350,000, and variable costs are $600,000, what is the budgeted contribution margin ratio? |
(b) | If the contribution margin ratio is 30%, sales are $900,000 and fixed costs are $200,000, what is the operating profit? |
198.Louis Company sells a single product at a price of $65 per unit. Variable costs per unit are $45 and total fixed costs are $625,500. Louis is considering the purchase of a new piece of equipment that would increase the fixed costs to $800,000, but decrease the variable costs per unit to $42.
Required:
If Louis Company expects to sell 44,000 units next year, should they purchase this new equipment?
50. What are the advantages and disadvantages of the scatter graph m What are the advantages and...
What are the advantages and disadvantages of the scatter graph m
What are the advantages and disadvantages of the scatter-graph method as compared to the high-low method?
What are the advantages and disadvantages of the scatter graph m