- Puget Sound Divers is a company that provides diving services such as underwater ship repairs to clients in the Puget Sound area. The company’s planning budget for May appears below:
| Puget Sound Divers Planning Budget For the Month Ended May 31 |
|
| Budgeted diving-hours (q) | 300 |
| Revenue ($460.00q) | $ 138,000 |
| Expenses: | |
| Wages and salaries ($11,500 + $128.00q) | 49,900 |
| Supplies ($3.00q) | 900 |
| Equipment rental ($2,200 + $25.00q) | 9,700 |
| Insurance ($4,000) | 4,000 |
| Miscellaneous ($540 + $1.48q) | 984 |
| Total expense | 65,484 |
| Net operating income | $ 72,516 |
During May, the company’s actual activity was 290 diving-hours.
Required:
Prepare a flexible budget for May. (Round your answers to the nearest whole dollar.)
Quilcene Oysteria farms and sells oysters in the Pacific Northwest. The company harvested and sold 7,900 pounds of oysters in August. The company’s flexible budget for August appears below:
| Quilcene Oysteria | |
| Flexible Budget | |
| For the Month Ended August 31 | |
| Actual pounds (q) | 7,900 |
| Revenue ($4.10q) | $ 32,390 |
| Expenses: | |
| Packing supplies ($0.35q) | 2,765 |
| Oyster bed maintenance ($3,600) | 3,600 |
| Wages and salaries ($2,300 + $0.35q) | 5,065 |
| Shipping ($0.60q) | 4,740 |
| Utilities ($1,250) | 1,250 |
| Other ($500 + $0.01q) | 579 |
| Total expense | 17,999 |
| Net operating income | $ 14,391 |
The actual results for August appear below:
| Quilcene Oysteria | |
| Income Statement | |
| For the Month Ended August 31 | |
| Actual pounds | 7,900 |
| Revenue | $ 26,600 |
| Expenses: | |
| Packing supplies | 2,935 |
| Oyster bed maintenance | 3,460 |
| Wages and salaries | 5,475 |
| Shipping | 4,470 |
| Utilities | 1,060 |
| Other | 1,199 |
| Total expense | 18,599 |
| Net operating income | $ 8,001 |
Required:
Calculate the company’s revenue and spending variances for August.
Note: 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.
- Bandar Industries Berhad of Malaysia manufactures sporting equipment. One of the company’s products, a football helmet for the North American market, requires a special plastic. During the quarter ending June 30, the company manufactured 3,900 helmets, using 2,847 kilograms of plastic. The plastic cost the company $18,790.
According to the standard cost card, each helmet should require 0.66 kilograms of plastic, at a cost of $7.00 per kilogram.
Required:
- What is the standard quantity of kilograms of plastic (SQ) that is allowed to make 3,900 helmets?
- What is the standard materials cost allowed (SQ × SP) to make 3,900 helmets?
- What is the materials spending variance?
- What is the materials price variance and the materials quantity variance?
(For requirements 3 and 4, 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.)
- SkyChefs, Incorporated, prepares in-flight meals for a number of major airlines. One of the company’s products is grilled salmon in dill sauce with baby new potatoes and spring vegetables. During the most recent week, the company prepared 5,100 of these meals using 2,000 direct labor-hours. The company paid its direct labor workers a total of $28,000 for this work, or $14.00 per hour.
According to the standard cost card for this meal, it should require 0.40 direct labor-hours at a cost of $13.50 per hour.
Required:
- What is the standard labor-hours allowed (SH) to prepare 5,100 meals?
- What is the standard labor cost allowed (SH × SR) to prepare 5,100 meals?
- What is the labor spending variance?
- What is the labor rate variance and the labor efficiency variance?
(For requirements 3 and 4, 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.)
- Logistics Solutions provides order fulfillment services for dot.com merchants. The company maintains warehouses that stock items carried by its dot.com clients. When a client receives an order from a customer, the order is forwarded to Logistics Solutions, which pulls the item from storage, packs it, and ships it to the customer. The company uses a predetermined variable overhead rate based on direct labor-hours.
In the most recent month, 180,000 items were shipped to customers using 7,700 direct labor-hours. The company incurred a total of $26,180 in variable overhead costs.
According to the company’s standards, 0.03 direct labor-hours are required to fulfill an order for one item and the variable overhead rate is $3.45 per direct labor-hour.
Required:
- What is the standard labor-hours allowed (SH) to ship 180,000 items to customers?
- What is the standard variable overhead cost allowed (SH × SR) to ship 180,000 items to customers?
- What is the variable overhead spending variance?
- What is the variable overhead rate variance and the variable overhead efficiency variance?
(For requirements 3 and 4, 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.)