TB Problem Qu. 9-398 During September, Clendennen Corporation budgeted for...
During September, Clendennen Corporation budgeted for 37,000 customers, but actually served 35,000 customers. The company uses the following revenue and cost formulas in its budgeting, where q is the number of customers served:
Wages and salaries: $36,200 + $1.83q
Miscellaneous expense: $6,200 + $0.23q
Prepare the company's flexible budget for September based on the actual level of activity for the month.
Actual customers served: 35,000
Wages and salaries: ________
Miscellaneous expense: ________
Total expenses: __________
Net operating income: __________
Huron Company produces a commercial cleaning compound known as Zoom. The direct materials and direct labor standards for one unit of Zoom are given below:
|Standard Quantity or Hours||Standard Price
|Direct materials||4.6||pounds||$||2.50||per pound||$||11.50|
|Direct labor||0.2||hours||$||18.00||per hour||$||3.60|
During the most recent month, the following activity was recorded:
Twenty thousand pounds of material were purchased at a cost of $2.35 per pound.
All of the material purchased was used to produce 4,000 units of Zoom.
750 hours of direct labor time were recorded at a total labor cost of $14,925.
1. Compute the materials price and quantity variances for the month.
2. Compute the labor rate and efficiency variances for the month.
(For all requirements, Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Do not round intermediate calculations.)
|Materials price variance|
|Materials quantity variance|
|Labor rate Variance|
|Labor efficiency variance|
|Actual customers served||35000|
|Wages and salaries||100250||=36200+(35000*1.83)|
|Net operating income||4250|
|Materials price variance||3000||F||=20000*(2.35-2.5)|
|Materials quantity variance||4000||U||=2.5*(20000-4000*4.6)|
|Labor rate Variance||1425||U||=14925-(750*18)|
|Labor efficiency variance||900||F||=18*(750-4000*0.2)|
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