Atlanta

Month Machine Hours Utilities

January 800 8,700.00
February 720 8,360.00 Low
March 810 8,950.00
April 920 9,360.00
May 950 9,625.00 High
June 900 9,150.00

Y = a + bx
b= Cost of highest activity level - cost of lowest activity level
Highest activity level - lowest activity level

b= 9,625 - 8,360
950 - 720

b= 1,265
230
b= 5.50

a= Y - bx
a= 9,625 - 5.50 x 950 8,360 - 5.50 x 720
a= 4,400.00 4,400.00

Y= 4,400 + 5.50 x 956

Y= 9,658.00
 Month Production Volume Maintenance Costs XY X²
JUNE 150,000 500,000.00 75,000,000,000.00 22,500,000,000.00
JULY 230,000 620,000.00 142,600,000,000.00 52,900,000,000.00
AUGUST 380,000 800,000.00 304,000,000,000.00 144,400,000,000.00
SEPTEMBER 120,000 480,000.00 57,600,000,000.00 14,400,000,000.00
OCTOBER 270,000 710,000.00 191,700,000,000.00 72,900,000,000.00
Σ 1,150,000 3,110,000 770,900,000,000 307,100,000,000
Mean 230,000 622,000
n=5
Using the least squares, the estimate of the variable cost per unit is CLOSEST to;
A. P2.32 C. P2.05
B. P1.31 D. P1.06

Solution:
Y = a + bx

b= Σ xy - n(x)̅ (ȳ)
Σ x²- n(x̅²)

b= 770,900,000,000-(5)(230,000)(622,000)
307,100,000,000-5(230,000)(230,000)

b= 55,600,000,000
42,600,000,000

b= 1.31
Selling Price 100
Units in beginning inventory -
Units produced 2,400
Units sold 2,100
Units in ending inventory 300
Variable costs per unit:
Direct material 31
Direct labor 11
Variable manufacturing overhead 1
Variable selling and administrative 8
Fixed Costs:
Fixed manufacturing overhead 48,200
Fixed selling and administrative 62,400

Solution: Unit Cost Total Cost

Variable selling and administrative 8 16,800
Fixed selling and administrative 62,400
79,200
Units in beginning inventory -
Units produced 20,000
Units sold 19,000
Selling price per unit 100
Variable costs per unit:
Direct material 12
Direct labor 25
Variable manufacturing overhead 3
Variable selling and administrative 2
Fixed Costs:
Fixed manufacturing overhead 500,000
Fixed selling and administrative 600,000

ABSORPTION COSTING:

Sales 1,900,000.00
COGS 1,260,000.00
Gross Profit 640,000.00
S & A Expenses 638,000.00
Operating Income 2,000.00
Operating Income, AC 85,500.00
Operating Income, VC 90,000.00
Difference 4,500.00

Total Fixed OH 150,000.00

Total Production 100,000.00
Fixed OH per unit 1.50

Difference needed in units 3,000.00

Operating Income, AC 85,500.00

Add/Less: FxOH 4,500.00 *need to add, so it is an increase of 3,000 units
Operating Income, VC 90,000.00
ZELDA COMPANY

Sales price 12
Variable cost 8

Zelda's practical plant capacity is 40,000 units. Its total fixed costs aggregate P 48,000,
and it has a 40% effective tax rate.

Sales 480,000.00
Variable Cost 320,000.00
Contribution Margin 160,000.00
Fixed Costs 48,000.00
Operating Income 112,000.00
Income Tax Expense 44,800.00
Net Income 67,200.00
Link Company
Year 1 Year 2 Diff % of Change
Sales 450,000.00 500,000.00 50,000.00 11.11%
VCOGS 270,000.00 300,000.00
CM 180,000.00 200,000.00
Fixed Cost 120,000.00 120,000.00
Operating Income 60,000.00 80,000.00 33.33% 20,000.00 80,000.00

DOL = CM/OPBT
DOL = 180,000.00
60,000.00
DOL = 3.00 x 11.11% 0.33
Bokoblin Co

Sales 100% 30.00

VCOGS 55% 16.50 1,000 16,500.00
CM 45% 13.50
Hyrule Products

X Y Z
Sales 360,000.00 456,000.00 448,000.00
VCOGS 300,000.00 360,000.00 420,000.00
Commission 36,000.00 45,600.00 -
CM 24,000.00 50,400.00 28,000.00
Fixed Cost - 30,000.00 -
Operating Profit 24,000.00 20,400.00 28,000.00
2 3 1
Harkness Oil

160 cars Actual

15 min/car Standard 0.25 hour
7 /hour Standard

Labor Efficiency Variance

(AH-SH) x SR
(160 x .25) - SH x 7 = 14 F
40 - SH = 14/7
-SH = 2 - 40
SH = -2+40
SH = 38

Labor Rate Variance

(AR-SR) x AH
AR - 7 x 38 = 19 U
AR - 7 = 19/38
AR = 0.5+7
AR = 7.50
Powerbroker Company
Units Pesos
Raw Material 108,000 583,200.00
Ratio of RM to FG 3:1
Standard Price 16.50

Actual:
Manufactured Units 32,700.00
RM used 99,200.00
Purchase Price 5.40
Material Price Variance

(AP - SP) x AQ
(5.40 - 16.50/3) x 108,000
5.40 - 5.5 x 108,000
(10,800.00) FAVORABLE
Kang Company

Actual Total OH 1,600,000.00

Budgeted FOH 1,500,000.00
Applied FOH 3/DLH 1,200,000.00
Applied VOH 0.50/DLH 200,000.00
Actual labor hours 430,000

Actual Total OH 1,600,000.00

Applied Total OH 1,400,000.00
Total OH Variance 200,000.00 UNFAVORABLE

Budgeted FOH 1,500,000.00

Applied FOH 1,200,000.00
FO Variance 300,000.00 UNFAVORABLE

Actual Labor Hours 430,000.00

Applied Labor Hours 400,000.00
Labor Hours Variance 30,000.00 UNFAVORABLE
x 0.50
Labor Hours Variance in Pesos 15,000.00

Total OH Spending Variance (115,000.00) FAVORABLE

Total OH Volume Variance 300,000.00
Total OH Efficiency Variance 15,000.00 315,000.00 UNFAVORABLE
Total OH Variance 200,000.00 UNFAVORABLE
Ultron Company

For a 200-kilo batch:

Standard:
Material SQ SP
A 120 10.00
B 72 8.00
C 48 6.00

Actual:
Material AQ AP
A 25200 9.60
B 14600 8.20
C 9400 6.80

Material Price Variance:

AQ x AP AQ x SP Variance
A 241,920.00 252,000.00 (10,080.00)
B 119,720.00 116,800.00 2,920.00
C 63,920.00 56,400.00 7,520.00
360.00 U
Tempo Company

NRV Method Joint Cost 315,000.00

Product Units Produced Final Sales Value Further Processing and Marketing Cost NRV
A 20,000 100,000.00 14,000.00 86,000.00
B 30,000 180,000.00 90,000.00 90,000.00
C 50,000 350,000.00 86,000.00 264,000.00
440,000.00
0.195455 61,568.18
0.204545 64,431.82
0.6 189,000.00 3.78
Alphabet Company

Joint Cost 264,000.00

Product Market Value at Split-Off % Allocation of JC

A 290,000.00 64% 170,133.33
B 150,000.00 33% 88,000.00
X 10,000.00 2% 5,866.67
450,000.00 100% 264,000.00
Ratcliff Company

Joint Cost 8,000.00

Product Yards % Allocation of JC

X 1,500 41% 3,243.24
Z 2,200 59% 4,756.76
3,700 8,000.00
Courtney Company

Product Sales Value at Split-Off % Allocation of JC

A 700,000.00 70% 140,000.00 200,000.00
B 300,000.00 30% 60,000.00 200,000.00
1,000,000.00 100% 200,000.00