Horngren's Cost Accounting: A Managerial Emphasis (16th Edition)
16th Edition
ISBN: 9780134475585
Author: Srikant M. Datar, Madhav V. Rajan
Publisher: PEARSON
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Chapter 8, Problem 8.28E
Straightforward coverage of manufacturing overhead, standard-costing system. The Brazil division of an American telecommunications company uses
| Variable |
$537,470 |
| Variable manufacturing overhead cost rate | $7 per standard machine-hour |
| Fixed manufacturing overhead costs incurred | $146,101 |
| Fixed manufacturing overhead costs budgeted | $136,000 |
| Denominator level in machine-hours | 68,000 |
| Standard machine-hour allowed per unit of output | 1.2 |
| Units of output | 66,500 |
| Actual machine-hours used | 75,700 |
| Ending work-in-process inventory | 0 |
- A. Prepare an analysis of all manufacturing overhead variances. Use the 4-
variance analysis framework illustrated in Figure 8-4 (page 304).
Required
- B. Prepare
journal entries for manufacturing overhead costs and their variances. - C. Describe how individual variable manufacturing overhead items are controlled from day to day.
- D. Discuss possible causes of the variable manufacturing overhead variances.
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Indirect Cost Allocation: Direct Method
Sprint Manufacturing Company has two production departments, Melting and Molding. Direct general plant management and plant security costs benefit both production departments. Sprint allocates general plant management costs on the basis of the number of production employees and plant security costs on the basis of space occupied by the production departments. In November, the following overhead costs were recorded:
Melting Department overhead
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Other pertinent data follow:
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10,000
20,000
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a. Prepare a schedule allocating general plant management costs and plant security costs to the Meltingand Molding Departments.
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Required:
1. Should Irrigation Specialties use process costing or job-order costing?
Process costing
2. If Irrigation Specialties uses an actual costing system, what is the cost of a single system installed in June? In July? In August? Round your answers
to the nearest dollar.
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July
654 per system
August
621 per system
3. Now assume that Irrigation Specialties uses a normal costing system. Estimated overhead for the year is $54,000, and estimated production is 600
watering systems. What is the predetermined overhead rate per system?
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July
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Indirect Cost Allocation: Direct MethodSprint Manufacturing Company has two production departments, Melting and Molding. Direct general plant management and plant security costs benefit both production departments. Sprint allocates general plant management costs on the basis of the number of production employees and plant security costs on the basis of space occupied by the production departments. In November, the following overhead costs were recorded:
Melting Department direct overhead
$180,000
Molding Department direct overhead
400,000
General plant management
100,000
Plant security
35,000
Other pertinent data follow:
Melting
Molding
Number of employees
30
55
Space occupied (square feet)
10,000
30,000
Machine hours
10,000
2,000
Direct labor hours
4,000
20,000
(a) Prepare a schedule allocating general plant management costs and plant security costs to the Melting and Molding Departments.Instructions: Do not round computations until you final…
Chapter 8 Solutions
Horngren's Cost Accounting: A Managerial Emphasis (16th Edition)
Ch. 8 - How do managers plan for variable overhead costs?Ch. 8 - How does the planning of fixed overhead costs...Ch. 8 - How does standard costing differ from actual...Ch. 8 - What are the steps in developing a budgeted...Ch. 8 - What are the factors that affect the spending...Ch. 8 - Assume variable manufacturing overhead is...Ch. 8 - Describe the difference between a direct materials...Ch. 8 - What are the steps in developing a budgeted fixed...Ch. 8 - Why is the flexible-budget variance the same...Ch. 8 - Explain how the analysis of fixed manufacturing...
Ch. 8 - Provide one caveat that will affect whether a...Ch. 8 - The production-volume variance should always be...Ch. 8 - What are the variances in a 4-variance analysis?Ch. 8 - Overhead variances should be viewed as...Ch. 8 - Describe how flexible-budget variance analysis can...Ch. 8 - Each of the following statements is correct...Ch. 8 - Steed Co. budgets production of 150,000 units in...Ch. 8 - As part of her annual review of her companys...Ch. 8 - Culpepper Corporation had the following...Ch. 8 - Fordham Corporation produces a single product. The...Ch. 8 - Variable manufacturing overhead, variance...Ch. 8 - Fixed manufacturing overhead, variance analysis...Ch. 8 - Variable manufacturing overhead variance analysis....Ch. 8 - Fixed manufacturing overhead variance analysis...Ch. 8 - Manufacturing overhead, variance analysis. The...Ch. 8 - 4-variance analysis, fill in the blanks. ProChem...Ch. 8 - Straightforward 4-variance overhead analysis. The...Ch. 8 - Straightforward coverage of manufacturing...Ch. 8 - Overhead variances, service sector. Meals Made...Ch. 8 - Total overhead, 3-variance analysis. Pampered...Ch. 8 - Production-volume variance analysis and...Ch. 8 - Overhead variances, service setting. Carlyle...Ch. 8 - Identifying favorable and unfavorable variances....Ch. 8 - Flexible-budget variances, review of Chapters 7...Ch. 8 - Comprehensive variance analysis. Cooking Whiz...Ch. 8 - Journal entries (continuation of 8-35). A. Prepare...Ch. 8 - Graphs and overhead variances. Best Around, Inc.,...Ch. 8 - Overhead variance, missing information. Consider...Ch. 8 - Flexible budgets, 4-variance analysis. (CMA,...Ch. 8 - Activity-based costing, batch-level variance...Ch. 8 - Overhead variances and sales-volume variance. The...Ch. 8 - Activity-based costing, batch-level variance...Ch. 8 - Comprehensive review of Chapters 7 and 8, working...Ch. 8 - Review of Chapters 7 and 8, 3-variance analysis....Ch. 8 - Nonfinancial variances. Kathys Kettle Potato Chips...Ch. 8 - Overhead variances, service sector. Cavio is a...Ch. 8 - Direct-cost and overhead variances, income...Ch. 8 - Overhead variances, ethics. Carpenter Company uses...
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