Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN: 9781337115773
Author: Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher: Cengage Learning
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Textbook Question
Chapter 9, Problem 63E
Use the following information for Exercises 9-63 and 9-64:
Palladium Inc. produces a variety of household cleaning products. Palladium’s controller has developed
Next year, Palladium expects production to require 90,000 direct labor hours.
Exercise 9-63 Flexible Budget for Various Levels of Activity
Refer to the information for Palladium Inc. above.
Required:
- 1. Prepare an overhead budget for the expected level of direct labor hours for the coming year.
- 2. Prepare an overhead budget that reflects production that is 15% higher than expected and for production that is 15% lower than expected.
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The Cleary Company is in the process of preparing its manufacturing overhead budget for the upcoming year. Sales are projected to be 40,000 units. Information about the various manufacturing overhead costs follows:
E (Click the icon to view the manufacturing overhead cost information.)
Requirement
Prepare the manufacturing overhead budget for the Cleary Company for the upcoming year.
Prepare the manufacturing overhead budget by first calculating the total variable manufacturing overhead, then calculate the total fixed manufacturing overhead and total manufacturing overhead.
The Cleary Company
Manufacturing Overhead Budget
- X
For the Upcoming Year
Data table
Projected Sales (Units)
Variable manufacturing overhead costs:
Variable rate
per unit
Total fixed costs
Indirect materials
Supplies
Indirect materials..
1.00
Indirect labor
Supplies
1.10
Indirect labor
2$
0.80 $
63,000
Plant utilities
Plant utilities....
$
0.20 $
34,000
Repairs and maintenance
Repairs and maintenance.
$
0.40 $…
Palladium Inc. produces a variety of household cleaning products. Palladium’s controller has developed standard costs for the following four overhead items:
Overhead Item
Total Fixed Cost
Variable Rate per DirectLabor Hour
Maintenance
$ 86,000
$0.20
Power
0.45
Indirect labor
140,000
2.10
Rent
35,000
Next year, Palladium expects production to require 90,000 direct labor hours.
Required:
Question Content Area
1. Prepare an overhead budget for the expected level of direct labor hours for the coming year.
Palladium Inc.Overhead BudgetFor the Coming Year
Variable costs:
Rate per Hour
Activity Level 90,000 Hours
blank
Maintenance
$fill in the blank ddf6cc027003019_1
$fill in the blank ddf6cc027003019_2
blank
Power
fill in the blank ddf6cc027003019_3
fill in the blank ddf6cc027003019_4
blank
Indirect labor
fill in the blank ddf6cc027003019_5
fill in the blank…
Solomon Hats Corporation manufactures three different models of hats: Vogue, Beauty, and Glamour. Solomon expects to incur
$640,000 of overhead cost during the next fiscal year. Other budget Information follows.
Direct labor hours
Machine hours
Required
a. Use direct labor hours as the cost driver to compute the allocation rate and the budgeted overhead cost for each product.
b. Use machine hours as the cost driver to compute the allocation rate and the budgeted overhead cost for each product.
Complete this question by entering your answers in the tabs below.
Required A Required B
Vogue Beauty Glamour Total
4,600 6,600 4,800 16,000
1,200 2,300 2,900 6,400
Use direct labor hours as the cost driver to compute the allocation rate and the budgeted overhead cost for each product.
Product Allocation Rate x Weight of Base Allocated Cost
X
X
Vogue
Beauty
Glamour
Total
X
=
||
Required A
Required B >
Chapter 9 Solutions
Managerial Accounting: The Cornerstone of Business Decision-Making
Ch. 9 - Define the term budget. How are budgets used in...Ch. 9 - Prob. 2DQCh. 9 - Explain how both small and large organizations can...Ch. 9 - Prob. 4DQCh. 9 - What is a master budget? An operating budget? A...Ch. 9 - Explain the role of a sales forecast in budgeting....Ch. 9 - All budgets depend on the sales budget. Is this...Ch. 9 - Why is goal congruence important?Ch. 9 - Why is it important for a manager to receive...Ch. 9 - What is participative budgeting? Discuss some of...
Ch. 9 - A budget too easily achieved will lead to...Ch. 9 - Explain why a manager has an incentive to build...Ch. 9 - Discuss the differences between static and...Ch. 9 - Explain why mixed costs must be broken down into...Ch. 9 - What is the purpose of a before-the-fact flexible...Ch. 9 - Prob. 1MCQCh. 9 - Which of the following is part of the control...Ch. 9 - Which of the following is not an advantage of...Ch. 9 - The budget committee a. reviews the budget. b....Ch. 9 - A moving, 12-month budget that is updated monthly...Ch. 9 - Which of the following is not part of the...Ch. 9 - Before a direct materials purchases budget can be...Ch. 9 - The first step in preparing the sales budget is to...Ch. 9 - Which of the following is needed to prepare the...Ch. 9 - A company requires 100 pounds of plastic to meet...Ch. 9 - A company plans to sell 220 units. The selling...Ch. 9 - Select the one budget below that is not an...Ch. 9 - A company has the following collection pattern:...Ch. 9 - The percentage of accounts receivable that is...Ch. 9 - Which of the following is not an advantage of...Ch. 9 - Prob. 16MCQCh. 9 - For performance reporting, it is best to compare...Ch. 9 - To create a meaningful performance report, actual...Ch. 9 - To help assess performance, managers should use a...Ch. 9 - A firm comparing the actual variable costs of...Ch. 9 - Preparing a Sales Budget Patrick Inc. sells...Ch. 9 - Preparing a Production Budget Patrick Inc. makes...Ch. 9 - Preparing a Direct Materials Purchases Budget...Ch. 9 - Preparing a Direct Labor Budget Patrick Inc. makes...Ch. 9 - Preparing an Overhead Budget Patrick Inc. makes...Ch. 9 - Preparing an Ending Finished Goods Inventory...Ch. 9 - Preparing a Cost of Goods Sold Budget Andrews...Ch. 9 - Preparing a Selling and Administrative Expenses...Ch. 9 - Preparing a Budgeted Income Statement Oliver...Ch. 9 - Preparing a Schedule of Cash Collections on...Ch. 9 - Preparing an Accounts Payable Schedule Wight Inc....Ch. 9 - Preparing a Cash Budget La Famiglia Pizzeria...Ch. 9 - Flexible Budget with Different Levels of...Ch. 9 - Performance Report Based on Budgeted and Actual...Ch. 9 - Preparing a Sales Budget Tulum Inc. sells powdered...Ch. 9 - Preparing a Production Budget Tulum Inc. makes a...Ch. 9 - Preparing a Direct Materials Purchases Budget...Ch. 9 - Preparing a Direct Labor Budget Tulum Inc. makes a...Ch. 9 - Preparing an Overhead Budget Tulum Inc. makes a...Ch. 9 - Prob. 40BEBCh. 9 - Preparing a Cost of Goods Sold Budget Lazlo...Ch. 9 - Preparing a Selling and Administrative Expenses...Ch. 9 - Preparing a Budgeted Income Statement Jameson...Ch. 9 - Preparing a Schedule of Cash Collections on...Ch. 9 - Pilsner Inc. purchases raw materials on account...Ch. 9 - Preparing a Cash Budget Olivers Bistro provided...Ch. 9 - Flexible Budget with Different Levels of...Ch. 9 - Performance Report Based on Budgeted and Actual...Ch. 9 - Planning and Control a. Dr. Jones, a dentist,...Ch. 9 - Use the following information for Exercises 9-50...Ch. 9 - Prob. 51ECh. 9 - Production Budget and Direct Materials Purchases...Ch. 9 - Production Budget Aqua-Pro Inc. produces...Ch. 9 - Direct Materials Purchases Budget Langer Company...Ch. 9 - Direct Labor Budget Evans Company produces asphalt...Ch. 9 - Sales Budget Alger Inc. manufactures six models of...Ch. 9 - Production Budget and Direct Materials Purchases...Ch. 9 - Schedule of Cash Collections on Accounts...Ch. 9 - Schedule of Cash Collections on Accounts...Ch. 9 - Cash Payments Schedule Fein Company provided the...Ch. 9 - Cash Budget The owner of a building supply company...Ch. 9 - Flexible Budget for Various Levels of Production...Ch. 9 - Use the following information for Exercises 9-63...Ch. 9 - Use the following information for Exercises 9-63...Ch. 9 - Prob. 65PCh. 9 - Operating Budget, Comprehensive Analysis Allison...Ch. 9 - Use the following information for Problems 9-67...Ch. 9 - Use the following information for Problems 9-67...Ch. 9 - Use the following information for Problems 9-67...Ch. 9 - Ryan Richards, controller for Grange Retailers,...Ch. 9 - Participative Budgeting, Not-for-Profit Setting...Ch. 9 - Cash Budget The controller of Feinberg Company is...Ch. 9 - Optima Company is a high-technology organization...Ch. 9 - Direct Materials and Direct Labor Budgets Willison...Ch. 9 - Prob. 75PCh. 9 - Prob. 76CCh. 9 - Prob. 77CCh. 9 - Budgetary Performance, Rewards, Ethical Behavior...
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