Required: Calculate the following budgets for each of May and June: a) Production of Catrell (in units) b) Materials Usage of Samet (in kgs) c) Materials Purchase of Samet (in kgs) ww d) Direct Labour (in hours)
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
Step by step
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- Riggins, Inc. manufactures one product called tybos. The company uses a standard cost system and sells each tybo for $8. At the start of monthly production, Riggins estimated 9,500 tybos would be produced in March. Riggins has established the following material and labor standards to produce one tybo: Standard Quantity Standard Price Direct materials 2.5 pounds $3 per pound Direct labor 0.6 hours $10 per hour During March 2022, the following activity was recorded by the company relating to the production of tybos: 1. The company produced 9,000 units during the month. 2. A total of 24,000 pounds of materials were purchased at a cost of $66,000. 3. A total of 24,000 pounds of materials were used in production. 4. 5,000 hours of labor were incurred during the month at a total wage cost of $55,000. Calculate the following variances for March for Riggins, Inc. Identify whether each variance is favorable or unfavorable.…Ceder Company has compiled the following data for the upcoming year: Sales are expected to be 15,000 units at $55.00 each. Each unit requires 4 pounds of direct materials at $2.70 per pound. Each unit requires 1.5 hours of direct labor at $18.00 per hour. Manufacturing overhead is $3.70 per unit. Beginning direct materials inventory is $4,200.00. Ending direct materials inventory is $5,150.00. Selling and administrative costs totaled $136,920. Required: 1. Determine Ceder's budgeted cost of goods sold. 2. Complete Ceder's budgeted income statement.A company manufactures 5,000 units of a product per month. The cost of placing an order is 100. The purchase price of the raw material is 10 per kg. The re-order period is 4 to 8 weeks. The consumption of raw materials varies from 100 kg to 450 kg per week, the average consumption being 275 kg. The carrying cost of inventory is 20% per annum. Calculate: (I) Re-order quantity (II) Re-order level
- Shadee Corporation expects to sell 630 sun shades in May and 320 in June. Each shade sells for $162. Shadee's beginning and ending finished goods inventories for May are 60 and 50 shades, respectively. Ending finished goods inventory for June will be 55 shades. Suppose that each shade takes three direct labor hour to produce and Shadee pays its workers $15 per hour. Additionally, Shadee's fixed manufacturing overhead is $10,000 per month, and variable manufacturing overhead is $10 per unit produced. Required: 1. Prepare Shadee's direct labor budget for May and June. 2. Prepare Shadee's manufacturing overhead budget for May and June.Ceder Company has compiled the following data for the upcoming year: Sales are expected to be 14,500 units at $50.00 each. Each unit requires 3 pounds of direct materials at $2.60 per pound. Each unit requires 1.4 hours of direct labor at $17.00 per hour. Manufacturing overhead is $3.60 per unit. Beginning direct materials inventory is $4,100.00. Ending direct materials inventory is $5,000.00. Selling and administrative costs totaled $136,770. Required: 1. Determine Ceder's budgeted cost of goods sold. (do not round intermediate values) 2. Complete Ceder's budgeted income statement.Ceder Company has compiled the following data for the upcoming year:Sales are expected to be 14,000 units at $60.00 each.Each unit requires 3 pounds of direct materials at $3.50 per pound.Each unit requires 1.7 hours of direct labor at $18.00 per hour.Manufacturing overhead is $4.50 per unit.Beginning direct materials inventory is $5,000.00.Ending direct materials inventory is $6,350.00.Selling and administrative costs totaled $138,120.Required:1. Determine Ceder's budgeted cost of goods sold.2. Complete Ceder's budgeted income statement. Required 1 Required 2 Complete this question by entering your answers in the tabs below.Determine Ceder's budgeted cost of goods sold. (Do not round the intermediate values.)
- Axion manufactures a household product. The standard cost if this product is Direct material 3kg at $1.25 per kg = $3.75 per unit Direct Labour 3 hours at $5.10 per hour The company manufactures this product in batches of 50,000 units per month and all production is completed by the end of the period. In October the actual results were: Direct material 158,000 kg costing $189,600 Direct labour 156,000 hours costing $819,000 ($819,000 / 156,000hrs = $5.25) Prior to the compilation of the actual results some of the senior management were asked to comment on the possible outcome of the comparison exercise that would take place. The purchasing manager stated that he had obtained very good terms from his suppliers and there should be a favourable price variance. The personnel manager reported that no increase in wage rates had been agreed, so there should be no variance emerging in the wage rate…Sunrise Poles manufactures hiking poles and is planning on producing 4,000 units in March and 3,700 in April. Each pole requires a half pound of material, which costs $1.20 per pound. The company's policy is to have enough material on hand to equal 10% of the next month's production needs and to maintain a finished goods inventory equal to 25% of the next month's production needs. PLEASE NOTE: Units are rounded to whole numbers with commas as needed (i.e. 1,234). All dollar amounts are rounded to whole dollars and shown with "$" and commas as needed (i.e. $12,345), except for any "per" amounts (units or dollars), which are rounded to two decimal places and shown with "$" and commas as needed (i.e. $1,234.56) Cost per Pound Desired Ending Inventory DM per Unit Units to be Produced Pounds Needed for Production Required DM Pounds Beginning Inventory Total Cost of DM Purchase Total DM Required Using the information aboye, along with the terms above, prepare a direct materials (DM) budget…Ceder Company has compiled the following data for the upcoming year: • Sales are expected to be 16,500 units at $50 each. • Each unit requires 4 pounds of direct materials at $3.00 per pound. • Each unit requires 1.8 hours of direct labor at $13 per hour. • • • • Manufacturing overhead is $4.00 per unit. Beginning direct materials inventory is $4,500. Ending direct materials inventory is $5,600. Selling and administrative costs totaled $137,370. Required: 1. Determine Ceder's budgeted cost of goods sold. 2. Complete Ceder's budgeted income statement. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Complete Ceder's budgeted income statement. Note: Do not round the intermediate values. CEDER COMPANY Budgeted Income Statement Budgeted Gross Margin Budgeted Net Operating Income
- Lasso Company expects to sell 1,750 units in January and 1,990 units in February. The company expects to incur the following product costs: Lasso Company Direct materials cost per unit $52.00 Direct labor cost per unit $57.00 Manufacturing overhead cost per unit $25.00 Total projected manufacturing cost per unit 134 The beginning balance in Finished Goods Inventory is 280 units at $134 each for a total of $37,520. Lasso Company uses FIFO inventory costing method. Prepare the cost of goods sold budget for Lasso Company for January and February.Gillman Co. is forecasting sales of 62,000 units of products for August. To make one unit of finished product, 5 pounds of raw materials are required. Actual beginning and desired ending inventories of raw materials and finished goods are: August 1 (Actual) August 30 (Desired) Raw materials (pounds) 74,700 68,200 Finished goods (units) 5,900 8,300 a. Calculate the number of units of product to be produced during August. b. Calculate the number of pounds of raw materials to be purchased during August.Coronado Industries required production for June is 142000 units. To make one unit of finished product, three pounds of direct material Z are required. Actual beginning and desired ending inventories of direct material Z are 35000 and 65000 pounds, respectively. How many pounds of direct material Z must be purchased?