Answer:
The order, in terms of relative size, will be as follows:
(b) Consumption
(c) Investment
(a) Net Exports
Explanation:
The aggregate demand consists of the sum of four components which are government spending, consumption, investment and net exports.
Amongst which the consumption is the largest component of all, as it represents the total income spent by an individual or household on the goods and services in the economy. It's calculation is dependent of several factors such as disposable income, interest rates and future economic conditions.
Investment is the second largest component, after consumption, as shifts in it's value results in improvement/fall on the quality and quantity factors of production in the long run.
In terms of size when compared with the other components, the Net Exports stands as the smallest component. Practically due to the fact that it is calculated after deducting imports from exports.
A facility is setting up an assembly line to produce 75 units per day, working 24 hours per day. Calculate the desired cycle time in minutes per unit.
Task Time (Min) Predecessors
A 4 -
B 3 -
C 5 A
D 5 A,B
E 3 C,D
Solution :
Given :
The production output per day = 75 units
Production time per day = 24 hours
Therefore, the cycle time is
= [tex]$\frac{\text{production time per day}}{\text{outpu}t \text{ per day} }$[/tex]
[tex]$=\frac{24 \times 60}{75}$[/tex]
= 19.2 mins
≈ 20 minutes
The desired cycle time = 15 minutes per unit
Given the task times of A to E from the table.
Sum of the task times (A to E) = 4 + 3 + 5 + 5 + 3
= 20 minutes
Number of workstations needed = (sun of total task times) / (cycle time)
[tex]$=\frac{20}{15}$[/tex]
= 1.33
≈ 2 work stations
If Futura decides to make the starters, a supervisor would have to be hired (at a salary of $60,000) to oversee production. However, the company has sufficient idle tools and machinery such that no new equipment would have to be purchased. The rent charge above is based on space utilized in the plant. The total rent on the plant is $80,000 per period. Depreciation is due to obsolescence rather than wear and tear.
Answer:
$20,000
Explanation:
Calculation to determine the financial advantage (disadvantage) of making the 40,000 starters instead of buying them from an outside supplier
First step is to calculate the Relevant cost of making the starters
Relevant cost of making the starters=($3.1*40,000)+($2.70*40,000)+($0.6*40,000)+$60,000
Relevant cost of making the starters=$124,000+$108,000+$24,000+$60,000
Relevant cost of making the starters=$316,000
Second step is to calculate the Relevant cost of buying the starters
Relevant cost of buying the starters=(40,000*8.4)
Relevant cost of buying the starters=$336,000
Now let calculate the Financial advantage
Financial advantage=$336,000-$316,000
Financial advantage=$20,000
Therefore the financial advantage (disadvantage) of making the 40,000 starters instead of buying them from an outside supplier is $20,000
Cullumber Co. receives $343,800 when it issues a $343,800, 10%, mortgage note payable to finance the construction of a building at December 31, 2020. The terms provide for annual installment payments of $57,300 on December 31. Prepare the journal entries to record the mortgage loan and the first two payments. (Round answers to 0 decimal places, e.g. 15,250. Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)
Answer:
See the journal entries below.
Explanation:
The journal entries will look as follows:
Date Description Debit ($) Credit ($)
31 Dec 20 Cash 343,800
Mortgage note payable 343,800
(To record the issue of mortgage note.)
31 Dec 21 Interest expense (w.1) 34,380
Mortgage note payable (w.2) 22,920
Cash 57,300
(To record the first annual installment on Mortgage note.)
31 Dec 22 Interest expense (w.4) 32,088
Mortgage note payable (w.5) 25,212
Cash 57,300
(To record the second annual installment on Mortgage note.)
Workings:
w.1. Interest expense on December 31, 2021 = Mortgage loan amount * Interest rate = $343,800 * 10% = $34,380
w.2. Principal paid on December 31, 2021 = Annual installment payments - Interest expense on December 31, 2021 = $57,300 - $34,380 = $22,920
w.3 Mortgage loan balance on December 31, 2021 = Mortgage loan amount - Principal paid on December 31, 2021 = $343,800 - $22,920 = $320,880
w.4. Interest expense on December 31, 2022 = Mortgage loan balance on December 31, 2021 * Interest rate = $320,880 * 10% = $32,088
w.5. Principal paid on December 31, 2022 = Annual installment payments - Interest expense on December 31, 2022 = $57,300 - $32,088 = $25,212
Sheffield Company uses a periodic inventory system. For April, when the company sold 560 units, the following information is available. Units Unit Cost Total Cost April 1 inventory 240 $27 $ 6,480 April 15 purchase 370 32 11,840 April 23 purchase 390 35 13,650 1,000 $31,970 Compute the April 30 inventory and the April cost of goods sold using the LIFO method.
Answer:
$19,090
Explanation:
LIFO assumes that the last units to arrive will be sold first. Therefore, the cost of goods sold will be based on later (recent) prices.
Therefore,
Cost of Sales = 390 units x $35 + 170 x $32 = $19,090
Mention any two life domains which will help you when choosing a career?
Answer:
spiritual, community, personal, career, family
Explanation:
There are five life domains. When choosing a career (yes one of the life domains) it is imperitive to know what passion drives you.
Suppose your company needs $13 million to build a new assembly line. Your target debt-equity ratio is .55. The flotation cost for new equity is 6 percent, but the flotation cost for debt is only 3 percent. Your boss has decided to fund the project by borrowing money because the flotation costs are lower and the needed funds are relatively small.
A. What is your company’s weighted average flotation cost, assuming all equity is raised externally?
B. What is the true cost of building the new assembly line after taking flotation costs into account?
Answer:
A. The company’s weighted average flotation cost, assuming all equity is raised externally is:
= 4.35%.
B. The true cost of building the new assembly line after taking flotation costs into account is:
= $13.39 million.
Explanation:
a) Data and Calculations:
Amount needed to build a new assembly line = $13 million
Target debt-equity ratio = 0.55
Therefore, the weight of equity = 1 - 0.55 = 0.45
Flotation cost for new equity = 6%
Flotation cost for debt = 3%
Weighted average flotation cost = (Equity flotation cost * weight) + (Debt flotation cost * weight)
= 6% * 0.45 = 2.7%
+ 3% * 0.55 = 1.65%
Weighted Average = 4.35%
True cost of building the new assembly line:
Amount needed to build a new assembly line = $13 million
Plus Debt flotation cost (3% of $13 million) 0.39 million
Total cost of building the assembly line, including flotation cost = $13.39 million
b) Note that the interest payments are not included in the above cost.
List a minimum of sources of information in Australia that you could access to help you facilitate compliance with relevant international finance regulations.
Answer:
The answer is below
Explanation:
Some of the sources of information in Australia that you could access to help you facilitate compliance with relevant international finance regulations are:
1. Reserve Bank of Australia - RBA
2. Australian Prudential Regulation Authority - APRA
3. Australian Securities and Investments Commission - ASIC
4. Australian Competition and Consumer Commission - ACCC
5. Australian Communications and Media Authority - ACMA
6. Superannuation and Financial Services Industry - Royal Commission
7. Australian Financial Services Licence - AFSL
8. Australian Market Licence - AML
9. Clearing and Settlement - CS
10. Australian Consumer Law - ACL
22) BS Company is considering eliminating the following product line: Product AXP Sales $ 80,000 Less variable costs: Raw materials 50,000 Direct labor 10,000 Contribution margin $ 20,000 Less fixed costs: Facility-level costs allocated to products 30,000 Profit (Loss) $ (10,000 ) What amount of cost is avoidable if BS outsources production of this product
Answer:
Avoidable costs= $60,000
Explanation:
Giving the following formula:
Raw materials 50,000
Direct labor 10,000
Facility-level costs allocated to products 30,000
We were not provided with information regarding the fixed allocated costs. If none of the fixed allocated costs are avoidable, only the variable cost will not be incurred if the product is eliminated.
Avoidable costs= $60,000
*The best answer will receive brainliest, I will friend you, and I will like all of the questions you've asked or answered.
*Any submission unorthodox or not relating to the question will be reported!!!
Think of a business professional you admire. Using an example of a time when this person displayed integrity in a difficult situation, discuss how their business actions demonstrated their values.
Answer:
A business professional that I think of is a family friend is the majority owner of an Architectural Millwork company and a time when they showed great integrity in a difficult situation was when a former employee was suing them for unemployment. They conducted themselves with total maturity and professionalism and they were completely honest the entire time. These business actions demonstrated that honesty is a key value for them in running their company and dealing with legality issues. This is a time when a business professional showed integrity during a difficult in their companies timeline.
Explanation:
Answer:
Amira, a sales rep for a software company, was asked by a potential customer whether the company’s technology could perform a specific function critical to his business needs. Amira wasn’t certain the software could handle his needs, so she told him she would need to get back to him. Rather than provide potential misinformation just to make the sale, Amira checked with the development team first. After determining the product could perform the requested function, she let her customer know. Not only did Amira earn the sale, but she earned trust and respect from her client, too.
Explanation:
In a workplace setting, acting with integrity often means demonstrating your core values in all efforts. Here are a few behaviors that show integrity:
Being dependable and following through on commitments
Being open and honest when communicating with others
Holding yourself accountable and owning up to your shortcomings
It’s important that employees exercise integrity regardless of their department or career level. Integrity is critical, however, in leadership positions where people have the opportunity to set examples for others. By incorporating strong values into your behavior, you can help encourage other employees to do the same.
How to display integrity in the workplace
Whether you’re working in a small business or a large corporation, your commitment to integrity will impact the workplace. Acting with integrity not only helps show employers you are capable of handling responsibilities that can advance your career, but it also helps foster a positive company culture.
Actions to demonstrate integrity and impact your workplace
1. Show up ready to work
2. Set a positive example
3. Be respectful during the conflict
4. Practice accountability
5. Follow and enforce company policies
6. Improve your work ethic
7. Respect property
property rights are important to a free enterprise system because they
Answer: Protect businesses' freedom to buy and sell products
Explanation:
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1. Which of the following words is generally used to describe what managers do as opposed to what leaders do?
O A. Organize
O B. Inspire
O C. Innovate
O D. Influence
The U.S. Rice Millers’ Association claims that if the Japanese rice market were opened to imports by lowering tariffs, the resultant lower prices would save Japanese consumers about $6 billion annually. The Japanese government continues to use the high tariffs to make sure local farmers can earn a living. The tariff on rice is an example of
Answer: Protectionism
Explanation:
Protectionism occurs when the industries in a particular country are being protected from foreign competition by the government of that economy. Protectionism is done through the imposition of tariffs, quotas or total ban on the products of other countries.
In the question, the tariff on rice is an example of protectionism as the tariff will lead to an increase in the price of the foreign rice and the people will have to buy from the local rice suppliers. In this case, the local industry is protected.
JJ Construction Inc. entered into a contract with a customer to build a corporate office on January 1, 2020, for $9,000,000. JJ construction owns the construction in process during the construction process and the office could be sold to other clients as well. The office is expected to be completed in three years for a total cost of $5,700,000. Actual costs incurred through December 31, 2020, are $2,394,000. Determine the amount of revenue to record in 2020 assuming that the cost-to-cost method is used.
Answer:
$3,780,000
Explanation:
Calculation to Determine the amount of revenue to record in 2020 assuming that the cost-to-cost method is used.
First step is to calculate the % of work completed by December 31, 2020 using this formula
% of work completed by December 31, 2020 = Actual cost incurred / Total estimated costs
Let plug in the formula
% of work completed by December 31, 2020=$2,394,000 / $5,700,000
% of work completed by December 31, 2020= 42%
Now let calculate the Amount of revenue to record in 2020 using cost to cost method using this formula
Amount of revenue to record in 2020 = Total contract price * % completion
Let plug in the formula
Amount of revenue to record in 2020 = $9,000,000*42%
Amount of revenue to record in 2020 = $3,780,000
Therefore the amount of revenue to record in 2020 assuming that the cost-to-cost method is used is $3,780,000
The following lots of Commodity Z were available for sale during the year. Beginning inventory 8 units at $50 First purchase 19 units at $51 Second purchase 51 units at $57 Third purchase 15 units at $57 The firm uses the periodic system, and there are 25 units of the commodity on hand at the end of the year. What is the ending inventory balance at the end of the year according to the LIFO method
Answer:
The ending inventory balance at the end of the year according to the LIFO method is $1,267.
Explanation:
The Last-In, First-Out (LIFO) method is an inventory method under which the last unit to arrive in inventory is assumed to be sold first.
Since the firm uses the periodic system under which the inventory account is updated at the end of the accounting period, we have:
Ending inventory balance = 8 units at $50 from the beginning inventory + 17 units at $51 per units from the First purchase = (8 * $50) + (17 * $51) = $1,267
Desert Company purchased land to be used as a factory site for $1,250,000. Desert paid $120,000 to tear down two buildings on the land. Salvage was sold for $8,000. Legal fees of $5,220 were paid for title investigation and making the land purchase. Architect’s fees were $46,800. Title insurance cost $3,600 and liability insurance during construction cost $3,900. Excavation cost $15,660. The contractor was paid $4,200,000. Landscaping cost $9,600. Interest costs during construction were $255,000.
The cost of the building that should be recorded by Wilson Co. is:_________
Answer:
$4,269,950
Explanation:
The Cost of an asset include Purchase Cost and other costs directly incurred to put the asset in the location and condition intended for use by management.
Calculation of Cost of the Building :
Architect’s fees $46,800
Insurance $3,600
liability insurance $3,900
Excavation $15,660
Contractor $4,200,000
Total $4,269,950
Therefore,
The cost of the building that should be recorded by Wilson Co. is $4,269,950
After the accounts have been adjusted at March 31, the end of the fiscal year, the following balances were taken from the ledger of Haverty Services Co.:
Retained Earnings $587,500
Dividends 40,000
Fees Earned 542,145
Wages Expense 349,700
Rent Expense 83,900
Supplies Expense 31,475
Miscellaneous Expense 10,490
Required:
Journalize the two entries required to close the accounts.
Answer and Explanation:
The two entries for closing the accounts are shown below:
1 Fees earned $542,145
To Income Summary $542,145
(Being revenue accounts are closed)
2 Income Summary Dr $475,565
To Wages expense $349,700
To Rent Expense $83,900
To Supplies Expense $31,475
To Miscellaneous expense $10,490
(Being expense accounts are closed)
These two entries should be recorded
You are responsible for managing the diaper inventory at an Amazon warehouse. Demand for diaper boxes from this warehouse is predictable and is about 10,000 boxes per month. The fixed cost of placing a diaper box order from a supplier is $400 per order (mostly due to fixed transportation costs). Furthermore, you estimate that the holding cost of a box of diapers is about $0.5 per month. The wholesale cost of each box of diapers from the supplier is $15 per box.
1. What is the cost-minimizing number of boxes that you should order from your supplier? How often should you place this order?
2. Due to the consolidation of replenishment orders of different products, your manager informs you that you are constrained to re-ordering diaper boxes only once a month (i.e., you must place a replenishment order once every month). What should be your ordering quantity in this case? By how much does your average monthly costs increase compared to the ordering quantity in Question 1?
Answer:
1. EOQ = 4,000 units per order.
place an order every 12 days.
2. If you can only make one purchase per month, the purchase order should be for 10,000 units.
Total inventory costs would increase by $10,800
Explanation:
annual demand = 10,000 x 12 = 120,000
annual holding cost per unit = $0.50 x 12 = $6
order cost = $400
EOQ = √[(2 x 120,000 x $400) / $6] = √16,000,000 = 4,000
total number of orders per year = 120,000 / 4,000 = 30
each order will be placed after 365 / 30 = 12.17 days
total inventory costs = (30 x $400) + (2,000 x $6) = $24,000
new inventory costs = (12 x $400) + (5,000 x $6) = $34,800
Jack went to a farm and purchased a fox, a chicken, and an avocado. On his way home, Jack came to the bank of a river and rented a boat. But crossing the river by boat, Jack could carry only himself and a single one of his purchases: the fox, the chicken, or the avocado. If left unattended together, the fox would eat the chicken, or the chicken would eat the avocado. Jack's challenge was to carry himself and his purchases to the far bank of the river, leaving each purchase intact. How did he do it
Answer:
The answer is explained step by step below
Explanation:
In order to solve this dilemma, Jack would first take the chicken across the river, leaving the fox and the avocado behind. This is because if the chicken was left out then it would either be eaten by the fox or it would eat the avocado.
Then next Jack would go back and get the fox. This time when he reaches the other side of the river along with the fox, he would take the chicken back with him to the starting side. If he left the fox along with the chicken then it would have eaten it.
Then when he drops the chicken at the starting side and he would take the avocado with him to the other side of the river.
Finally, he would go back and get the chicken. Thus, bringing all the three items to the across side of the river without losing either of them.
Sage Company has been having difficulty obtaining key raw materials for its manufacturing process. The company therefore signed a long-term noncancelable purchase commitment with its largest supplier of this raw material on November 30, 2020, at an agreed price of $367,600. At December 31, 2020, the raw material had declined in price to $334,840. What entry would you make on December 31, 2020, to recognize these facts
Answer:
Dr Unrealized Holding $32,760
Cr Estimated Liabilities $32,760
Explanation:
Preparation of What entry would you make on December 31, 2020, to recognize these facts
Based on the information given the Joi entry you would make on December 31, 2020, to recognize these facts will be :
December 31, 2020
Dr Unrealized Holding $32,760
Cr Estimated Liabilities $32,760
($367,600-$334,840)
what is the starting salary of an entry level librarian? it could hour wage or yearly.
Answer:
$46k–84kper year
Explanation:
Answer:
Which city, though?
Explanation:
Highest Paying Cities for Entry Level Librarian Jobs.
City Richmond, CA
Annual Salary $46,419
Monthly Pay $3,868
Weekly Pay $893
Hourly Wage $22.32
The calculation of the payback period for an investment when net cash flow is even (equal) is:
Answer:cost of investment/annual net cash flow
Explanation:
The Payback period states the period within which the investment funds are recoupened. The even net cash flow shows that the cash inflows are positive than cash outflows.
The computation of the payback period when the company experiences an even net cash flow would be:
[tex]P=\frac{I}{n}[/tex]
Here, P is the payback period, I is the initial investment and n is net cash flow in each period. Therefore, the payback period will be equal to the initial investment divided by net cash flow per period.
Learn more about the payback period here:
https://brainly.com/question/13978071
Granite Company purchased a machine costing $137,000, terms 3/10, n/30. The machine was shipped FOB shipping point and freight charges were $3,700. The machine requires special mounting and wiring connections costing $11,700. When installing the machine, $3,200 in damages occurred. Compute the cost recorded for this machine assuming Granite paid within the discount period.
Answer:
s
Explanation:
Excel does not allow you to copy and paste formulas with AutoFill. true or false
Answer:
True
Explanation:
In excel, after entering a formula in a cell if we drag the cursor through the horizontal cells (row) or the vertical cells (columns), the formula is copied itself with the help of fill handle
Hence, the given statement is true
What do you think is more important, the presentation of a speech or its content? Discuss your answer.
Answer:
presentation of its content
Explanation:
I think this is more important , for example when you are presenting a project for class, your teacher wouldnt really want to see what you say. Instead they look for the creativity and the effort put into the content.
Sunland Company has outstanding accounts receivable totaling $1.28 million as of December 31 and sales on credit during the year of $6.36 million. There is also a debit balance of $6300 in the allowance for doubtful accounts. If the company estimates that 3% of its accounts receivable will be uncollectible, what will be the balance in the allowance for doubtful accounts after the year-end adjustment to record bad debt expense?
Answer:
$38,400
Explanation:
Calculation to determine what will be the balance in the allowance for doubtful accounts after the year-end adjustment to record bad debt expense
Using this formula
Balance in the Allowance account adjustment = outstanding accounts receivable *Estimated uncollectible percentage
Let plug in the formula
Balance in the Allowance account adjustment= $1.28 million account receivables x 3%
Balance in the Allowance account adjustment= $38,400
Therefore what will be the balance in the allowance for doubtful accounts after the year-end adjustment to record bad debt expense is $38,400
Classification of Cash Flows The following are several transactions and events that might be disclosed on a company's statement of cash flows: Required: 1. Identify in which section (if any) of the statement of cash flows each of the preceding items would appear and indicate whether it would be an inflow (addition) or outflow (subtraction). a. issuance of common stock Financing activities; inflow (addition) b. purchase of building Investing activities; outflow (subtraction) c. net income Operating activities; inflow (addition) d. increase in accounts receivable Operating activities; inflow (addition) e. depreciation expense Operating activities; outflow (subtraction) f. sale of land at cost Operating activities; inflow (addition) g. conversion of bonds to common stock Financing activities; inflow (addition) h. increase in accounts payable Investing activities; outflow (subtraction) i. payment of cash dividends Financing activities; outflow (subtraction) j. issuance of a stock dividend Operating activities; outflow (subtraction)
Answer:
Classification of Cash Flows
Transaction Statement of Cash Flows Section
a. issuance of common stock Financing activities; inflow (addition)
b. purchase of building Investing activities; outflow (subtraction)
c. net income Operating activities; inflow (addition)
d. increase in accounts receivable Operating activities; outflow (subtraction)
e. depreciation expense Non-cash flow activities; No flow (but addition to net income)
f. sale of land at cost Investing activities; inflow (addition)
g. conversion of bonds to common stock Non-cash Financing activities; No flow (No addition or subtraction)
h. increase in accounts payable Operating activities; inflow (addition)
i. payment of cash dividends Financing activities; outflow (subtraction)
j. issuance of a stock dividend Non-cash financing activity; No flow (No addition or subtraction)
Explanation:
Sections of the Statement of Cash Flows:
Operating Activities section records the inflow and outflow of cash generated from normal business activities.
Investing Activities section records the inflow and outflow of cash resulting from the procurement and sale of non-current assets and other investments in securities, including stocks and bonds.
Financing Activities section records the inflow and outflow of cash from short-term and long-term liabilities and owner's equity. The inflows are used for financing the business activities while the outflows are for repayments.
Pasadena Candle Inc. budgeted production of 730,000 candles for the January. Wax is required to produce a candle. Assume 11 ounces of wax is required for each candle. The estimated January 1 wax inventory is 17,400 pounds. The desired January 31 wax inventory is 12,900 pounds. If candle wax costs $1.40 per pound, determine the direct materials purchases budget for January. (One pound
Answer:
696,325 Pounds
Explanation:
The computation of the direct material purchase budget is given below:
Here we assume that
one pound = 16 ounces
Now total wax needed is
= Production of Finished Goods × Pounds of wax needed for production
= 730,000 candles × 11 ÷ 16
= 501,875 pounds
Now
Total direct material purchased = (Total Wax needed + Ending Inventory, Jan.31 - opening inventory) × unit price
= (490,625 Pounds + 12,900 pounds - 17,400 pounds) × $1.40 per pound
= 696,325 Pounds
A city that is attempting to attract a professional football team is planning to build a new stadium costing $500 million. Annual upkeep is expected to amount to $1,000,000 per year. The artificial turf will have to be replaced every 20 years at a cost of $2,000,000. Painting every 5 years will cost $250,000. If the city expects to maintain the facility indefinitely, what will be its capitalized cost at an interest rate of 10% per year
Answer:
Capitalized cost = - $510,758,686.20
Explanation:
Interest rate = r = 10%, or 0.10
Present value of base cost = $500 million = $500,000,000
Present value of annual upkeep = $1,000,000 / r = $1,000,000 / 0.10 = $10,000,000
Present value of the replacement cost of artificial turf every 20 years = ($2,000,000 * (r / (((1 + r)^20) - 1)) / r = ($2,000,000 * (0.10 / (((1 + 0.10)^20) - 1)) / 0.10 = $349,192.50
Present value of painting every 5 years = ($250,000 * (r / (((1 + r)^5) - 1)) / r = ($250,000 * (0.10 / (((1 + 0.10)^5) - 1)) / 0.10 = $409,493.70
Therefore, we have:
Capitalized cost = - Present value of base cost - Present value of annual upkeep - Present value of the replacement cost of artificial turf every 20 years - Present value of painting every 5 years = - $500,000,000 - $10,000,000 - $349,192.50 - $409,493.70 = - $510,758,686.20
The cost object(s) of the departmental overhead rate method is: Multiple Choice The time period. The production departments of the company. The production departments in the first stage and the unit of product in the second stage. The unit of product in the first stage and the production departments in the second stage. The production activities of the company.
Answer:
The production departments in the first stage and the unit of product in the second stage.
Explanation:
Managerial accounting also known as cost accounting is an accounting technique focused on identification, measurement, analyzing, interpretation, and communication of financial information to managers for better decisions making and pursuit of the organization's goals.
This ultimately implies that, managerial accounting is specific to a particular business organization i.e the managerial accounting model used by a company would be different from the one used by another.
In Managerial accounting, the departmental overhead rate method is an accounting technique used for calculating the expense rate for each department in the manufacturing (production) process of a factory. Thus, it is solely based on breaking up overhead costs for each department rather than a factory-wide rate. The unit of activities in each segment of a business firm or factory determines the departmental overhead rate.
Generally, the cost object of the departmental overhead rate method is the production departments in the first stage and the unit of product in the second stage.
Wade Company estimates that it will produce 6,000 units of product IOA during the current month. Budgeted variable manufacturing costs per unit are direct materials $5, direct labor $11, and overhead $17. Monthly budgeted fixed manufacturing overhead costs are $7,500 for depreciation and $3,500 for supervision. In the current month, Wade actually produced 6,500 units and incurred the following costs: direct materials $27,500, direct labor $65,000, variable overhead $110,000, depreciation $7,500, and supervision $3,700. Prepare a static budget report. Hint: The Budget column is based on estimated production while the Actual column is the actual cost incurred during the period. (List variable costs before fixed costs.) Wade Company Static Budget Report Difference Budget Actual Favorable Unfavorable Neither Favorable nor Unfavorable $ $ $ $ $ $
Explanation:
STATIC BUDGET ACTUAL VARIANCE
Units 6000 6500
variable costs
Direct material 30000 27500 2500 favorable
Direct labor 66000 65000 1000 favorable
Manufacturing overhead 102000 110000 8000 Unfavorable
Fixed costs
Depreciation 7500 7500 None
supervision 3500 3700 200 Unfavorable
Total expenses 209000 213700 4700 unfavorable