Problem 1: Peaceful Corporation manufactures figurines based on the following in
ID: 2377097 • Letter: P
Question
Problem 1:
Peaceful Corporation manufactures figurines based on the following information.
Standard costs
$20
Materials (4 ounces at $5)
$8
Direct labor (1 hour per unit)
$4
Variable overhead (based on direct labor hours)
Fixed overhead budget
$19,000
Actual results and costs
Materials purchased
Units
9,000
Cost
$39,600
Materials used in production
Finished product units
2,000
Raw material (ounces)
8,200
Direct labor hours
2,000
Direct labor cost
$20,000
Variable overhead costs
$5,980
Fixed overhead costs
$19,500
Required:
Problem 2:
The following is the current variable costing income statement for Dolly Corporation.
Sales (5,000 units)
$100,000
Variable expenses Cost of goods sold
$35,000
Selling (10% of sales)
$10,000
$45,000
Contribution margin
$55,000
Fixed expenses
Manufacturing overhead
$24,000
Administrative
$12,500
$36,500
Operating income
$18,500
Below is the following information on operations for Dolly Corporation.
Beginning inventory (units)
0
Units produced (units)
6,000
Manufacturing costs
Direct labor (per unit)
$5.00
Direct materials (per unit)
$2.30
Variable overhead (per unit)
$2.40
Required:
Prepare an absorption costing income statement.
Problem 3:
The following information was compiled for two models of cell phones.
3G model
4G model
Average
Budgeted Contribution Margin
$80.00
$120.00
$95.25
Budgeted Sales in Units
28,000
18,000
Actual Sales in Units
28,600
16,500
Required:
Calculate the sales mix variance. (Show your calculations.)
Standard costs
$20
Materials (4 ounces at $5)
$8
Direct labor (1 hour per unit)
$4
Variable overhead (based on direct labor hours)
Fixed overhead budget
$19,000
Actual results and costs
Materials purchased
Units
9,000
Cost
$39,600
Materials used in production
Finished product units
2,000
Raw material (ounces)
8,200
Direct labor hours
2,000
Direct labor cost
$20,000
Variable overhead costs
$5,980
Fixed overhead costs
$19,500