Kensington Corporation provided the following information from the standard cost sheet of one of its products:
Variable overhead: 4 hours × $4.00 per hour $16.00
Fixed overhead: 4 hours × $6 per hour $24.00

The following information is available regarding the company's operations for the period:
Units produced: 11,000
Direct labor: 45,000 hours costing $660,000
Overhead incurred:
Variable $189,000
Fixed $250,000

The budgeted fixed overhead for the period is $240,000, and the standard fixed overhead rate is based on an expected capacity of 40,000 direct labor hours.
Required:
Compute the following variances: [Label them as favorable (F) or unfavorable (U).]
1. Variable Overhead Spending Variance
2. Variable Overhead Efficiency Variance
3. Fixed Overhead Spending Variance
4. Fixed Overhead Volume Variance

Answers

Answer 1

1. Variable Overhead Spending Variance is unfavorable at $9000

2. Variable Overhead Efficiency Variance is unfavorable at  4000 dollars

3. Fixed Overhead Spending Variance $10000 This is unfavorable

4.  Fixed Overhead Volume Variance is $24000. This is favorable

How to solve for the variance

We have 45000 as the hours worked

solve for Actual variable overhead rate = 189000 / 45000 = 4.20 dollars

overhead rate = 4 dollars

11000 x 4 hours = 44 hours

a. The overhead spending variance

45,000 hours * ($4.20 - $4 per hour) = $9,000 this is unfavorable

Variable Overhead Spending Variance is unfavorable at $9000

b. Variable Overhead Efficiency Variance

= 45000 - 44000 x 4$

= 1000 x 4

= 4000 dollars

This is unfavorable

Variable Overhead Efficiency Variance is unfavorable at  4000 dollars

c. Fixed-overhead spending variance

= $250,000 - $240,000

= $10000

This is unfavorable

Fixed Overhead Spending Variance $10000 This is unfavorable

d. Fixed-overhead volume variance

$240,000 / 40,000  = 6dollars/hr

44,000 hours * $6 = $264000

$264000 - 240000

= $24000

This is favorable.

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Related Questions

airlines that offer lower fares on seats shortly before the flight’s departure date to fill empty seats are utilizing what type of pricing tactic?

Answers

Airlines that offer lower fares on seats

shortly before the flight's departure date

to fill empty seats are utilising Dynamic pricing.

Dynamic pricing can be defined as the

situation where a company or business

owner decide to change the price of the

product due to low demand or when the

price of a product is slice down or reduce

due to market demand for such product.

Based on the given scenario the airline is

making use of dynamic pricing due to low patronage so as to attract people.

In conclusion,airlines that offer lower fares on seats shortly before the flight's departure date to fill empty seats are utilising Dynamic pricing.

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Gain sharing is an employee benefit that provides

Answers

Gainsharing empowers employees to select how to improve their individual and collective performance. It also broadens employees' attention beyond their personal interests.

Gainsharing a contract that defines the vendor's commitment to the client in terms of particular business advantages. A contract of this type also specifies the payment the client will make based on the vendor's performance in delivering specified business advantages. A profit-sharing plan not only inspires employees to give their best effort, but it also instils in them a sense of accomplishment at work. This has secondary benefits such as fewer staff attrition and, as a result, less time and money spent on training new employees.

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Which of the following is true about filling out a job application? Select all that apply.

O do not leave any blank spaces

0 exclude information about being fired from a job

O only submit handwritten job applications

Ouse neat handwriting

Owrite in a list of references​

Answers

Answer: neat writing ,do not leave blank spaces , write in a list of references

Explanation:

which of the following items is most likely a short-term liability?
A. Bonds payable
B. Deferred income taxes
C. Finance lease covering 30-year term
D. Accounts payable

Answers

Account payable items is most likely a short-term liability.

Bonds payable, a 30-year finance lease, and deferred income taxes would all be paid overtime; therefore they are not current obligations.

nonetheless, accounts payable is probably a current liability.

What is finance lease?

A finance company is typically the legal owner of the asset for the duration of the lease in a finance lease, also known as a capital lease or a sales lease. The lessee has operational control over the asset as well as a portion of the financial risks and rewards associated with changes in the value of the underlying asset.

In further detail, it is a business relationship in which

The asset (equipment, software) will be chosen by the lessee (client or borrower);

The lessor (financial institution) will buy that asset;

Throughout the lease, the lessee will have access to that asset;

For the usage of the asset, the lessee will pay a series of rents or payments.

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what shapes would you generally expect each of the following cost curves to have: fixed costs, variable costs, marginal costs, average total costs, and average variable costs?

Answers

Shapes would i generally expect each of the following cost curves to have

fixed cost: straight horizontal line (it's the y-intercept)variable costs: U-shaped (?)marginal costs: J-shapedaverage total costs: U-shapedaverage variable costs: U-shaped (below ATC)

A cost curves is a graph of the charges of manufacturing as a feature of total quantity produced. In a loose market economy, productively efficient companies optimize their manufacturing manner by minimizing fee consistent with each possible stage of manufacturing, and the end result is a value curve.

The total fee curves (TC and ATC curves) are tormented by a fee change for any component of manufacturing. We make no distinction among constant and variable expenses in the long run as long as the longer term average general value curve (LRAC) is declining, then inner economies of scale are being exploited.

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Wanda Sotheby purchased 185 shares of Home Depot stock at $72 a share. One year later, she sold the stock for $82 a share. She
paid her broker a commission of $47 when she purchased the stock and a commission of $54 when she sold it. During the 12 months
she owned the stock, she received $144 in dividends. Calculate Wanda's total return on this investment.

Answers

Dur-ing the 12 months she own-ed the stock, she rece-ived $144 in dividends. Wan-da's total return on this investment is $1,893.

What Is Return on Investment (ROI)?

Return on investment (ROI) is a perform-ance measure used to evalu-ate the efficiency or profitability of an invest-ment or comp-are the efficiency of a number of differ-ent investments. ROI tries to directly mea-sure the amount of return on a part-icular investment, relat-ive to the investment’s cost.

Solution:

1. Total cost of purchase

= (Price per sh-are × Number of sha-res) + Com-mission

= ($72 × 185) + $47

= $13,367

2. Total sale pro-ceeds = (Price per share × Num-ber of shares) - Com-mission

= ($82 × 185) - $54

= $15,116

3. Total return = Dividends + Capital gain

= $144 + ($15,116 - $13,367)

= $1,893

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please please please help me

Answers

a) A decrease of 7.9% in material​ (supply-chain) costs is required to yield a profit of $40,000​, for a new material cost of $58,000.

b) An increase of 3.6% in sales is required to yield a profit of $40,000​, for a new level of sales of $145,000.

How are the percentages determined?

For the supply chain improvement, we can increase the profit to $40,000 by reducing the cost of materials to $58,000 ($63,000 - $5,000).

This reduction translates to a 7.9% cost improvement ($5,000/$63,000).

We apply the break-even sales revenue with the target profit for the sales strategy.

This analysis shows that Sales revenue needs to increase to $145,000, which is a 3.6% ($145,000 - $140,000/$140,000) improvement.

Current profit level = $35,000

Expected profit level = $40,000

                                                     Percent     Supply     %               Sales

Current Situation      Amount ($)  of sales     Chain                     Strategy

Sales                          140,000                    $140,000                  $145,000

Cost of material          63,000        (45%)      58,000   41.4%         63,000

Production cost          35,000        (25%)      35,000   25%           35,000

Contribution margin  42,000         (30%)    $47,000   33.6%     $47,000

Fixed cost                    7,000           (5%)         7,000     5%             7,000

Profit                          35,000         (25%)    $40,000   28.6%    $40,000

a) Percentage improvement in supply chain strategy = 7.9% [1 - ($63000 - $5,000/$63,000 x 100)]

The cost of the material with a $40,000, profit will be $58,000 ($63,00 x 1 - 7.9%).

b) Percentage improvement in the sales strategy = 3.6%

Break-even Sales = Fixed Costs + Target Profit/Contribution margin ratio

= $7,000 + $40,000/32.4%

= $25,000/32.4%

= $145,000

Required improvement in the sales strategy = 3.6% ($5,000/$140,000 x 100)

Sales with an improvement of 3.6% = $145,000 ($140,000 x 1.036)

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