P01 - Standard Costs and Variance Analysis PDF

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NORMAL COSTINGOne-Way Variance Actual Overhead 25 applies overhead at $5 per machine hour. During March it worked 10,000 hours and overapplied overhead by $3,000. Actual overhead was (E) a. $53,000. c. $47,000. b. $50,000. d. none of the above. L & H 10eApplied Overhead 36 Company uses the e...

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i n c o r r e c t b e c a u s e$ 1 4 , 8 5 0i sb a s e do nt h es t a n d a r du n i t q u a n t i t y , n o t t h ea c t u a l q u a n t i t y . 254

. An s we r( B)i sc o r r e c t . T h el a b o rr a t ev a r i a n c ee q u a l st h ea c t u a l h o u r su s e dt i me st h ed i ff e r e n c eb e t we e nt h ea c t u a l a n ds t a n d a r dr a t e s .Co n s e q u e n t l y ,t h el a b o rr a t ev a r i a n c ei sz e r o[ 3 . 1a c t u a lh o u r sx1 , 6 5 0u n i t sx( $ 1 2p e rh o u r s t a n d a r dr a t e$ 1 2p e r h o u ra c t u a l r a t e ) ] . An s we r( A)i si n c o r r e c t b e c a u s e$ 1 , 9 2 0i st h ea mo u n t o f t h efl e x i b l eb u d g e t o v e r h e a dv a r i a n c e .An s we r( C)i si n c o r r e c t b e c a u s e$ 4 , 9 5 0i st h ea mo u n to ft h eq u a n t i t yv a r i a n c e .An s we r( D)i si n c o r r e c tb e c a u s e$ 4 , 9 5 0i st h ea mo u n to ft h e q u a n t i t yv a r i a n c e .

255

. An s we r( D)i sc o r r e c t .T h efl e x i b l eb u d g e to v e r h e a dv a r i a n c ei st h ed i ff e r e n c eb e t we e na c t u a l o v e r h e a dc o s t sa n d t h efl e x i b l eb u d g e ta mo u n tf o rt h ea c t u a lo u t p u t .St a n d a r dt o t a lfi x e dc o s t sa ta n yl e v e lo fp r o d u c t i o na r e$ 2 7 , 0 0 0 . St a n d a r dv a r i a b l eo v e r h e a di s$ 9p e ru n i t ( $ 3x3l a b o rh o u r s ) .T h u s , t o t a l s t a n d a r dv a r i a b l eo v e r h e a di s$ 1 4 , 8 5 0f o rt h e a c t u a lo u t p u t( $ 9x1 , 6 5 0u n i t s ) ,a n dt h et o t a lfl e x i b l eb u d g e ta mo u n ti s$ 4 1 , 8 5 0( $ 2 7 , 0 0 0F OH+$ 1 4 , 8 5 0VOH) . Ac c o r d i n g l y , t h ef a v o r a b l efl e x i b l eb u d g e t v a r i a n c ei s$ 1 , 9 2 0( $ 4 1 , 8 5 0fl e x i b l eb u d g e t a mo u n t $ 3 9 , 9 3 0a c t u a l a mo u n t ) . An s we r( A)i si n c o r r e c tb e c a u s e$ 3 , 2 7 0i st h efl e x i b l eb u d g e ta mo u n tf o ra no u t p u to f1 , 8 0 0u n i t s .An s we r( B)i s i n c o r r e c tb e c a u s e$ 3 , 2 7 0i st h efl e x i b l eb u d g e t a mo u n tf o ra no u t p u to f1 , 8 0 0u n i t s .An s we r( C)i si n c o r r e c tb e c a u s ea f a v o r a b l ev a r i a n c ee x i s t s . Ac t u a l o v e r h e a di sl e s st h a nt h es t a n d a r do v e r h e a da t t h ea c t u a l p r o d u c t i o nl e v e l .

256

. An s we r( A)i sc o r r e c t .T h ema t e r i a l sq u a n t i t yv a r i a n c ee q u a l st h es t a n d a r dp r i c et i me st h ed i ff e r e n c eb e t we e nt h e a c t u a l a n ds t a n d a r dq u a n t i t i e s . T h i sv a r i a n c ei st h e r e f o r ee q u a l t o$ 9 , 9 0 0f a v o r a b l e[ $ 1 . 5 0s t a n d a r du n i t c o s t x( 1 1 6l b s . u s e dp e r u n i t 1 2 0l b s . s t a n d a r dp e r u n i t )x1 , 6 5 0u n i t sp r o d u c e d ] . An s we r( B)i si n c o r r e c tb e c a u s et h eq u a n t i t yv a r i a n c ei sf a v o r a b l e .An s we r( C)i si n c o r r e c tb e c a u s e$ 2 8 , 7 1 0i st h e ma g n i t u d eo f t h ep r i c ev a r i a n c e .An s we r( D)i si n c o r r e c t b e c a u s e$ 2 8 , 7 1 0i st h ema g n i t u d eo f t h ep r i c ev a r i a n c e .

257

. An s we r( A)i sc o r r e c t . Th ema t e r i a l sp r i c ev a r i a n c ee q u a l st h ea c t u a l q u a n t i t yu s e dt i me st h ed i ff e r e n c eb e t we e nt h e a c t u a la n ds t a n d a r dp r i c e sp e ru n i t .T h i sv a r i a n c et h e r e f o r ee q u a l s$ 2 8 , 7 1 0Un f a v o r a b l e[ ( 1 1 6l b s .x1 , 6 5 0u n i t s )x ( $ 1 . 6 5$ 1 . 5 0 ) ] . An s we r( B)i si n c o r r e c t b e c a u s e$ 2 9 , 7 0 0i st h ema g n i t u d eo f t h ev a r i a n c ei f t h es t a n d a r dq u a n t i t yi su s e d .An s we r ( C)i s i n c o r r e c tb e c a u s et h ep r i c ev a r i a n c ei su n f a v o r a b l e .An s we r( D)i si n c o r r e c tb e c a u s e$ 2 9 , 7 0 0i st h ema g n i t u d eo ft h e v a r i a n c ei f t h es t a n d a r dq u a n t i t yi su s e d .

258

. An s we r( D)i sc o r r e c t .T h el a b o rr a t ev a r i a n c ee q u a l sa c t u a lh o u r su s e dt i me st h ed i ff e r e n c eb e t we e na c t u a l a n d s t a n d a r dr a t e s .I ti sc a l c u l a t e di nt h es a mewa ya st h ema t e r i a l sp r i c ev a r i a n c e .Be c a u s et h es t a n d a r dr a t ea n da c t u a l r a t ewe r eb o t h$ 1 2p e rh o u r , t h el a b o rr a t ev a r i a n c ei s$ 0 . An s we r( A)i si n c o r r e c tb e c a u s e$ 2 , 7 0 0i st h ema g n i t u d eo ft h el a b o re ffic i e n c yv a r i a n c ei f1 , 8 0 0u n i t sa r ep r o d u c e d . An s we r( B)i si n c o r r e c tb e c a u s e$ 2 , 7 0 0i st h ema g n i t u d eo ft h el a b o re ffic i e n c yv a r i a n c ei f1 , 8 0 0u n i t sa r ep r o d u c e d . An s we r( C) i si n c o r r e c t b e c a u s e$ 2 , 4 7 5Un f a v o r a b l ei st h el a b o r e ffic i e n c yv a r i a n c e .

259

. An s we r( D)i sc o r r e c t .Th efl e x i b l eb u d g e to v e r h e a dv a r i a n c ei st h ed i ff e r e n c eb e t we e nt o t a l a c t u a l o v e r h e a dc o s t s a n dt h ea mo u n ts h o wno nafl e x i b l eb u d g e t .St a n d a r dfi x e dc o s t swi t h i nt h er e l e v a n tr a n g eo fp r o d u c t i o na r e$ 5 4 , 0 0 0 . St a n d a r dv a r i a b l eo v e r h e a di s$ 6p e rl a b o rh o u r ,o r$ 1 8p e ru n i t( 3x$ 6 ) .Ac c o r d i n g l y ,b u d g e t e dt o t a lo v e r h e a da tt h e a c t u a lo u t p u tl e v e l i s$ 8 3 , 7 0 0[ ( $ 1 8VOHx1 , 6 5 0u n i t s )+$ 5 4 , 0 0 0F OH] ,a n dt h efl e x i b l eb u d g e to v e r h e a dv a r i a n c ei s $ 3 , 8 4 0F a v o r a b l e( $ 7 9 , 8 6 0a c t u a l $ 8 3 , 7 0 0b u d g e t e d ) . An s we r( A)i si n c o r r e c tb e c a u s eaf a v o r a b l ev a r i a n c ee x i s t s . An s we r( B)i si n c o r r e c tb e c a u s e$ 6 , 5 4 0F a v o r a b l e a s s u me s1 , 8 0 0u n i t swe r ep r o d u c e d .An s we r ( C) i si n c o r r e c t b e c a u s eaf a v o r a b l ev a r i a n c ee x i s t s .

2 6 0

. ( $ 4 8 , 0 0 0x$ 1 5 ) –( 4 8 , 0 0 0x$ 1 6 )=$ 4 8 , 0 0 0f a v o r a b l e

2 6 1

. ( 4 8 , 0 0 0x$ 1 6 )–( 1 0 , 0 0 0x5x$ 1 6 )=$ 3 2 , 0 0 0f a v o r a b l e

2 6 2

. $ 2 0 4 , 0 0 0– ( 4 8 , 0 0 0x$ 4 )=$ 1 2 , 0 0 0u n f a v o r a b l e

2 6 3

. ( 4 8 , 0 0 0x$ 4 )–( 1 0 , 0 0 0x5x$ 4 )=$ 8 , 0 0 0f a v o r a b l e

2 6 4

. $ 1 7 5 , 5 0 0-( 2 2 , 0 0 0x$ 8 )=$ 5 0 0( F)

2 6 5

. ( 2 2 , 5 0 0–2 2 , 0 0 0 )x( $ 3 0 , 0 0 0 / 2 0 , 0 0 0 )=$ 7 5 0( U)

2 6 6

. $ 1 8 , 0 0 0( 2 2 , 0 0 0x( 1 8 , 0 0 0 / 2 0 , 0 0 0 ) )=$ 1 , 8 0 0( F)

267

. $ 4 , 5 0 0F+$ 1 0 , 0 0 0U=$5 , 5 0 0U

268

. $ 4 , 5 0 0F+$ 1 0 , 0 0 0U+$ 1 5 , 0 0 0U=$ 2 0 , 5 0 0U; $ 4 0 , 0 0 0U

269

. $ 4 , 5 0 0F+$ 1 0 , 0 0 0U+$ 1 5 , 0 0 0U+$ 4 0 , 0 0 0U=$ 6 0 , 5 0 0U

270

An s we r( C)i sc o r r e c t . T h et o t a l e mp l o y e eb e n e fi t si n c l u d e2 0 %o f s u p e r v i s i o na n dd i r e c t a n di n d i r e c t l a b o rc o s t s . T o fi n dt h ea mo u n ta s s o c i a t e dwi t hd i r e c tl a b o r ,2 0 %o fs u p e r v i s i o na n di n d i r e c tl a b o rc o s t sa r es u b t r a c t e df r o mt o t a l e mp l o y e eb e n e fi t s[ $ 5 7 5 , 0 0 02 0 %x( $ 2 5 0 , 0 0 0+$ 3 7 5 , 0 0 0 ) ] , o r $ 4 5 0 , 0 0 0 . An s we r( A)i si n c o r r e c tb e c a u s e2 0 %o fs u p e r v i s i o na n di n d i r e c tl a b o rc o s t sn e e dt ob es u b t r a c t e df r o mt o t a l e mp l o y e e b e n e fi t st od e t e r mi n et h ee mp l o y e eb e n e fi t sa s s o c i a t e dwi t hd i r e c t l a b o rc o s t s .An s we r( B)i si n c o r r e c t b e c a u s e$ 7 5 , 0 0 0 i st h er e s u l to fd e d u c t i n g8 0 %o fs u p e r v i s i o na n di n d i r e c tl a b o rc o s t sf r o mt o t a le mp l o y e eb e n e fi t s .An s we r( D)i s i n c o r r e c t b e c a u s e2 0 %o f s u p e r v i s i o na l s on e e d st ob ed e d u c t e d .

271

An s we r( D)i sc o r r e c t .T od e t e r mi n et h ev a r i a b l ema n u f a c t u r i n gO/ Hr a t e ,a l lv a r i a b l ea mo u n t smu s tb et o t a l e d ( $ 1 , 5 0 0 , 0 0 0 )a n dd i v i d e db yt h ec a p a c i t yi nDL H( 3 0 0 , 0 0 0 ) . T o t a lPe r DL HSu p p l i e s$4 2 0 , 0 0 0$ 1 . 4 0 I n d i r e c t l a b o r3 7 5 , 0 0 01 . 2 5 Po we r 1 8 0 , 0 0 0 . 6 0 Emp l o y e eb e n e fi t s :2 0 %d i r e c t l a b o r 4 5 0 , 0 0 01 . 5 02 0 %i n d i r e c t l a b o r7 5 , 0 0 0 . 2 5T o t a l$ 1 , 5 0 0 , 0 0 0$ 5 . 0 0 An s we r( A) i si n c o r r e c t b e c a u s e$ 7 . 8 0 / h r . i s t h efi x e dma n u f a c t u r i n gO/ Hr a t ep e rd i r e c t l a b o r h o u r . An s we r( B)i si n c o r r e c t b e c a u s et h ev a r i a b l ema n u f a c t u r i n g o v e r h e a dr a t ei sd e t e r mi n e db yd i v i d i n gv a r i a b l ee x p e n s e s( s u p p l i e s , i n d i r e c t l a b o r , p o we r , a n dd i r e c t a n di n d i r e c t l a b o r b e n e fi t s )b yd i r e c t l a b o rh o u r s .An s we r ( C) i si n c o r r e c t b e c a u s e$ 5 . 1 7 / h r . i n c o r r e c t l yi n c l u d e ss u p e r v i s i o nb e n e fi t so f $ 5 0 , 0 0 0 .

2 7 2

An s we r( A) i sc o r r e c t . T h ev a r i a b l ema n u f a c t u r i n gc o s t t op r o d u c ea1 0 0 u n i t l o t i s1 0 0t i me st h es u mo f d i r e c t ma t e r i a l s , d i r e c t l a b o r , a n dv a r i a b l eO/ Hp e r s e a t . Cu s h i o nma t e r i a l s Pa d d i n g$ 2 . 4 0 Vi n y l4 . 0 0 T o t a l c u s h i o nma t e r i a l s$ 6 . 4 0 Co s t i n c r e a s e1 0 %( g i v e n ) x 1 . 1 0 Co s t o f c u s h i o n e ds e a t$7 . 0 4 Cu s h i o nf a b r i c a t i o nl a b o r( $ 7 . 5 0 / DL Hx. 5DL H)3 . 7 5 V a r i a b l eo v e r h e a d( $ 5 . 0 0 / DL H x. 5DL H) 2 . 5 0 T o t a l v a r i a b l ec o s t p e rc u s h i o n e ds e a t$ 1 3 . 2 9 T o t a l v a r i a b l ec o s t p e r 1 0 0 u n i t l o t $ 1 , 3 2 9 An s we r( B) i s i n c o r r e c t b e c a u s e$ 1 , 8 6 9i st h et r a n s f e rp r i c ep l u st h eo p p o r t u n i t yc o s t o f $ 5 4 0o f t h eOffic eDi v i s i o n .An s we r ( C) i s i n c o r r e c t b e c a u s e$ 7 8 9i st h et r a n s f e r p r i c emi n u st h eo p p o r t u n i t yc o s t o f $ 5 4 0o f t h eOffic eDi v i s i o n .An s we r ( D) i s i n c o r r e c t b e c a u s et h et r a n s f e rp r i c eb a s e do nt h ev a r i a b l ema n u f a c t u r i n gc o s t si s$ 1 , 3 2 9 .

273

An s we r( A)i sc o r r e c t . T o t a l fi x e dO/ Hi s$ 2 , 3 4 0 , 0 0 0( s e eb e l o w) . I ti sd i v i d e db yt h e3 0 0 , 0 0 0 h o u rl e v e l o f a c t i v i t yt o d e t e r mi n et h e$ 7 . 8 0h o u r l yr a t e . Su p e r v i s i o n$2 5 0 , 0 0 0 He a t a n dl i g h t 1 4 0 , 0 0 0 Pr o p e r t yt a x e sa n di n s u r a n c e2 0 0 , 0 0 0 De p r e c i a t i o n1 , 7 0 0 , 0 0 0 Be n e fi t s ( 2 0 %o f s u p e r v i s i o n )5 0 , 0 0 0 $ 2 , 3 4 0 , 0 0 0 An s we r ( B)i si n c o r r e c t b e c a u s et h efi x e dma n u f a c t u r i n go v e r h e a dr a t ei s d e t e r mi n e db yd i v i d i n gfi x e de x p e n s e s( s u p e r v i s i o n , h e a t a n dl i g h t , p r o p e r t yt a x e sa n di n s u r a n c e , d e p r e c i a t i o n , a n d s u p e r v i s i o nb e n e fi t s )b yd i r e c t l a b o rh o u r s .An s we r( C) i si n c o r r e c t b e c a u s e$ 5 . 1 7 / h r . i n c o r r e c t l yi n c l u d e ss u p e r v i s i o n b e n e fi t so f $ 5 0 , 0 0 0 .An s we r ( D)i si n c o r r e c t b e c a u s e$ 5 . 0 0 / h r . i st h ev a r i a b l ema n u f a c t u r i n gO/ Hr a t ep e rh o u r .

2 7 4

An s we r( B)i sc o r r e c t . T h el a b o r h o u r su s e di nc u s h i o nf a b r i c a t i o nwi l l b eu s e dt oma k et h emo d i fi e dc u s h i o n e ds e a t . T h u s , t h el a b o r t i mef r e e db yn o t ma k i n gd e l u x es t o o l se q u a l st h ef r a mef a b r i c a t i o na n da s s e mb l yt i meo n l y . T h en u mb e r o f e c o n o myo ffic es t o o l st h a t c a nb ep r o d u c e di s1 2 5 . L a b o r h o u r st oma k e1 0 0d e l u x es t o o l s( 1 . 5x1 0 0 )1 5 0h r . Mi n u s :L a b o r h o u r st oma k e1 0 0c u s h i o n e ds e a t s ( c u s h i o nf a b r i c a t i o n. 5x1 0 0 ) ( 5 0 ) h r . L a b o rh o u r sa v a i l a b l ef o re c o n o mys t o o l 1 0 0h r . L a b o r h o u r st oma k eo n ee c o n o mys t o o l ÷ . 8h r . St o o l sp r o d u c e db ye x t r a l a b o r i ne c o n o mys t o o l p r o d u c t i o n ( 1 0 0÷. 8h r . ) 1 2 5s t o o l s An s we r( A) i si n c o r r e c t b e c a u s et h et o t a l h o u r sa v a i l a b l ef o r e c o n o mys t o o l sn e e d st ob ed i v i d e db yt h e. 8h r . r e q u i r e dt oma k ea ne c o n o mys t o o l .An s we r( C) i si n c o r r e c t b e c a u s et h et o t a l h o u r sa v a i l a b l ef o r e c o n o mys t o o l sn e e d s t ob ed i v i d e db yt h e. 8h r . r e q u i r e dt oma k ea ne c o n o mys t o o l .An s we r( D)i si n c o r r e c t b e c a u s e1 5 0i st h en u mb e ro f h o u r sr e q u i r e dt oma k e1 0 0d e l u x es t o o l sb e f o r ec o n s i d e r i n gt h eh o u r sr e q u i r e dt oma k e1 0 0c u s h i o n e ds e a t s .

275

An s we r( A)i sc o r r e c t . T h ec o n t r i b u t i o nma r g i np e ru n i t i se q u a l t ot h es e l l i n gp r i c emi n u st h ev a r i a b l ec o s t s . Va r i a b l e c o s t sp e ru n i tf o rt h ed e l u x eo ffic es t o o le q u a l $ 3 3 . 3 0a n dt h es e l l i n gp r i c ei s$ 5 8 . 5 0 .Th u s ,t h ec o n t r i b u t i o nma r g i ni s $ 2 5 . 2 0p e ru n i t ( $ 5 8 . 5 0-$ 3 3 . 3 0 ) . T h et o t a l s t a n d a r dc o s t i s$ 4 5 . 0 0 , wh i c hi n c l u d e s$ 1 1 . 7 0o f fi x e dO/ H( 1 . 5h r . x$ 7 . 8 0 ) , a n dt h ev a r i a b l ec o s t sa r e$ 3 3 . 3 0( $ 4 5 . 0 0$ 1 1 . 7 0 ) . An s we r( B)i si n c o r r e c tb e c a u s e$ 1 5 . 8 4i st h ec o n t r i b u t i o nma r g i no ft h ee c o n o myo ffic es t o o l .An s we r( C)i si n c o r r e c t b e c a u s ev a r i a b l ec o s t so f $ 3 3 . 3 0n e e dt ob ed e d u c t e df r o mt h es a l e sp r i c eo f $ 5 8 . 5 0 .An s we r( D)i si n c o r r e c t b e c a u s e $ 3 3 . 3 0i st h ev a r i a b l ec o s t wh i c hmu s t b ed e d u c t e df r o mt h es a l e sp r i c et oy i e l dt h ec o n t r i b u t i o nma r g i n .

276

An s we r( D)i sc o r r e c t . Op p o r t u n i t yc o s t i st h eb e n e fi t o f t h en e x t b e s t o p p o r t u n i t yf o r g o n e . T h eo p p o r t u n i t yc o s t h e r e i st h ec o n t r i b u t i o nma r g i nf o r g o n eb ys h i f t i n gp r o d u c t i o nt ot h ee c o n o myo ffic es t o o l ( $ 2 , 5 2 0$ 1 , 9 8 0=$ 5 4 0 ) . De l u x e Ec o n o my Se l l i n gp r i c e $ 5 8 . 5 0 $ 4 1 . 6 0 Co s t sMa t e r i a l s$ 1 4 . 5 5 $ 1 5 . 7 6L a b o r ( $ 7 . 5 0x1 . 5 ) 1 1 . 2 5 ( $ 7 . 5 0x. 8 ) 6 . 0 0Va r i a b l eO/ H ( $ 5x1 . 5 ) 7 . 5 0( $ 5x. 8 )4 . 0 0F i x e dO/ HT o t a l c o s t s$ 3 3 . 3 0 $ 2 5 . 7 6 Un i t CM$ 2 5 . 2 0 $ 1 5 . 8 4 Un i t sp r o d u c e dx1 0 0 x1 2 5 T o t a l CM $ 2 , 5 2 0 $ 1 , 9 8 0 An s we r ( A)i si n c o r r e c t b e c a u s e$ 7 8 9i st h e t r a n s f e rp r i c eo f $ 1 , 3 2 9mi n u st h eo p p o r t u n i t yc o s t o f $ 5 4 0o f t h eOffic eDi v i s i o n .An s we r( B)i si n c o r r e c t b e c a u s e $ 1 , 8 6 9i st h et r a n s f e r p r i c eo f $ 1 , 3 2 9p l u st h eo p p o r t u n i t yc o s t o f $ 5 4 0o f t h eOffic eDi v i s i o n .An s we r( C) i si n c o r r e c t b e c a u s e$ 1 , 3 2 9i st h et r a n s f e rp r i c e , n o t t h eo p p o r t u n i t yc o s t o f t h eOffic eDi v i s i o n .

277

. a . b .1 4 , 2 2 0SH c .1 5 , 6 1 6AH d .2 1 , 3 3 0l b s e .2 1 , 2 1 0l b s

7 , 1 1 0u n i t s ( $ 7 2 , 3 1 0+5 , 7 7 0-6 , 9 8 0 )/ ( 2x$ 5 ) $ 7 1 , 1 0 0/ $ 5 $ 7 8 , 0 8 0/ $ 5 ( $ 1 3 0 , 7 6 03 , 5 0 0+7 2 0 ) / $ 6 $ 1 2 7 , 2 6 0/ $ 6

278

. a . b .1 7 , 4 6 8SH c .1 8 , 2 0 0AH d .$ 4 , 3 9 2U e .$ 9 6 , 8 8 0

8 , 7 3 4u n i t s ( $ 1 0 5 , 5 6 01 4 , 5 6 03 , 6 6 0 ) / ( 2x$ 5 ) 8 , 7 3 4x2 ( $ 1 0 5 , 5 6 01 4 , 5 6 0 )/ $ 5 ( 1 8 , 2 0 0-1 7 , 4 6 8 ) x6 ( 1 8 , 2 0 0x$ 6 )$ 1 2 , 3 2 0

279

. a . $ 4( $ 6 0 0 , 0 0 0 / 3 0 0 , 0 0 0+$ 2v a r i a b l e ) b .$ 1 , 2 8 0 , 0 0 0( $ 4x3 2 0 , 0 0 0 ) c .$ 3 1 , 0 0 0o v e r a p p l i e d( $ 1 , 2 8 0 , 0 0 0-$ 1 , 2 4 9 , 0 0 0 ) d .$ 9 , 0 0 0u n f a v o r a b l e{ $ 1 , 2 4 9 , 0 0 0[ ( $ 2x3 2 0 , 0 0 0 )+$ 6 0 0 , 0 0 0 ] } e .$ 4 0 , 0 0 0f a v o r a b l e( $ 1 , 2 4 0 , 0 0 0b u d g e t e d-$ 1 , 2 8 0 , 0 0 0a p p l i e d )

280

. a . $ 5( $ 2 0 0 , 0 0 0 / 1 0 0 , 0 0 0+$ 3v a r i a b l e ) b .$ 4 5 0 , 0 0 0( $ 5x9 0 , 0 0 0 )

c .$ 7 , 0 0 0u n d e r a p p l i e d( $ 4 5 0 , 0 0 0$ 4 5 7 , 0 0 0 ) d .$ 1 3 , 0 0 0f a v o r a b l e{ $ 4 5 7 , 0 0 0[ ( $ 3x9 0 , 0 0 0 )+$ 2 0 0 , 0 0 0 ] } e .$ 2 0 , 0 0 0u n f a v o r a b l e( $ 4 7 0 , 0 0 0b u d g e t e d$ 4 5 0 , 0 0 0a p p l i e d ) 281

. a . Ac t u a l F i x e dOv e r h e a dCo s t $ 3 2 5 , 8 8 0 F l e x i b l eBu d g e t F i x e dOv e r h e a dCo s t $ 3 2 4 , 0 0 0 F i x e dOv e r h e a dCo s t Ap p l i e dt oWo r ki nPr o c e s s 3 0 2 , 1 0 0MHx$ 1 . 0 8 $ 3 2 6 , 2 6 8 Bu d g e t V a r i a n c e , $ 1 , 8 8 0UVo l u meV a r i a n c e $ 2 , 2 6 8F T o t a l v a r i a n c e , $ 3 8 8F Co mp u t a t i o n si nt h i so r d e r : ( No t e :Wh e nu s e di nt h eb e l o wa l g e b r a i cf o r mu l a s ,f a v o r a b l ev a r i a n c e sa r en e g a t i v ea n df a v o r a b l ev a r i a n c e sa r e p o s i t i v e . ) V o l u mev a r i a n c e=T o t a l v a r i a n c eBu d g e t v a r i a n c e =$ 3 8 8F$ 1 , 8 8 0U =$ 3 8 8$ 1 , 8 8 0 =$ 2 , 2 6 8 =$ 2 , 2 6 8F F i x e do v e r h e a da p p l i e d=3 0 2 , 1 0 0MHX$ 1 . 0 8 =$ 3 2 6 , 2 6 8 F l e x i b l eb u d g e t fi x e do v e r h e a d=F i x e do v e r h e a da p p l i e dVo l u mev a r i a n c e =$ 3 2 6 , 2 6 8$ 2 , 2 6 8F =$ 3 2 6 , 2 6 8+$ 2 , 2 6 8 =$ 3 2 4 , 0 0 0 Ac t u a l fi x e do v e r h e a d=F i x e do v e r h e a da p p l i e d+T o t a l v a r i a n c e =$ 3 2 6 , 2 6 8+$ 3 8 8F =$ 3 2 6 , 2 6 8$ 3 8 8 =$ 3 2 5 , 8 8 0 b . St a n d a r dMHa l l o we df o rp r o d u c t i o n , . St a n d a r dh o u r sa l l o we dp e r u n i t Un i t sp r o d u c e d

3 0 2 , 1 0 0 ÷ 0 . 1 3 , 0 2 1 , 0 0 0

c .F i x e do v e r h e a di nfl e x i b l eb u d g e t , ( a )a b o v e $3 2 4 , 0 0 0 St a n d a r dc o s t p e r ma c h i n eh o u r ÷ $ 1 . 0 8 MHa s s u me di nfl e x i b l eb u d g e t 3 0 0 , 0 0 0 St a n d a r dh o u r sa l l o we dp e r u n i t ÷ 0 . 1 Un i t sa s s u me di nfl e x i b l eb u d g e t 3 , 0 0 0 , 0 0 0

282

. Bu d g e t e dfi x e do v e r h e a dr a t e=F i x e do v e r h e a d / De n o mi n a t o rq u a n t i t y =$ 8 4 , 8 0 0 / 5 3 , 0 0 0d i r e c t l a b o r h o u r s

=$ 1 . 6 0 / d i r e c t l a b o r h o u r Ac t u a l fi x e do v e r h e a d =Bu d g e t e dfi x e do v e r h e a d+Bu d g e t v a r i a n c e =$ 8 4 , 8 0 0+$ 7 , 2 0 0 =$ 9 2 , 0 0 0 Ac t u a l v a r i a b l eo v e r h e a d =T o t a l a c t u a l o v e r h e a d–Ac t u a l fi x e do v e r h e a d =$ 2 6 2 , 5 0 0$ 9 2 , 0 0 0 =$ 1 7 0 , 5 0 0 Ac t u a l v a r i a b l eo v e r h e a dr a t e=Ac t u a l v a r i a b l eo v e r h e a d / Ac t u a l h o u r s =$ 1 7 0 , 5 0 0 / 5 5 , 0 0 0 =$ 3 . 1 0 Sp e n d i n gv a r i a n c e=AH( ARSR) =5 5 , 0 0 0( $ 3 . 1 0-$ 3 . 0 0 ) =$ 5 , 5 0 0U SHXSR=AHXSR-o v e r h e a de ffic i e n c yv a r i a n c e =5 5 , 0 0 0X$ 3 . 0 0$ 1 5 , 0 0 0 =$ 1 5 , 0 0 0 St a n d a r dh o u r sa l l o we d=( SHXSR) / SR =$ 1 5 0 , 0 0 0 / $ 3 . 0 0 =5 0 , 0 0 0h o u r s Ac t u a l u n i t sp r o d u c e d=St a n d a r dh o u r sa l l o we d / h o u r sp e r u n i t =5 0 , 0 0 0h o u r s / 2h o u r sp e r u n i t =2 5 , 0 0 0u n i t s V o l u mev a r i a n c e=Bu d g e t e dfi x e d( SHXSR) =$ 8 4 , 8 0 0( 5 0 , 0 0 0X$ 1 . 6 0 ) =$ 8...