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budgeted direct manufacturing

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Opulence Clothing is a manufacturer of designer suits. For June 2014, each suit is budgeted to take 5 labor-hours.  The budgeted number of suits to be manufactured in June 2014 is 1,1160.  Opulence Clothing allocates fixed manufacturing overhead to each suit using budgeted direct manufacturing labor-hours per suit.  Data pertaining to

Opulence Clothing is a manufacturer of designer suits. For June 2014, each suit is budgeted to take 5 labor-hours.  The budgeted number of suits to be manufactured in June 2014 is 1,1160.  Opulence Clothing allocates fixed manufacturing overhead to each suit using budgeted direct manufacturing labor-hours per suit.  Data pertaining to fixed manufacturing overhead costs for June 2014 are budgeted, $87,000.00 and actual, $63,935.  In June, 2014 there were 1,180 suits started and completed.  There were no beginning or ending inventories of suits.

  1. Compute the spending variance for fixed manufacturing overhad. Comment on the results.
  2. Compute the production-volume variance for June 2014. What inferences can Opulence draw from this variance? 

overhead costs for June 2014 are budgeted, $87,000.00 and actual, $63,935.  In June, 2014 there were 1,180 suits started and completed.  There were no beginning or ending inventories of suits.

  1. Compute the spending variance for fixed manufacturing overhad. Comment on the results.
  2. Compute the production-volume variance for June 2014. What inferences can Opulence draw from this variance? 
 
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an eyeglass company

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We have been hired to help an eyeglass company determine how many sets of eyeglasses leave their facility defective. They only assemble the components and only manufacture the lenses. For one set of glasses they require 2 lenses, 2 arms, 2 screws and one frame. Their suppliers have supplied them with the following defective percentages: a frame 1.5 %, an arm

2.0 % and a screw 0.5 %. They know from internal quality control checks that each eye lens has a 0.1% defective percentage. What percentage of the assembled glasses that leaves the factory is defective?

 
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an automotive company.

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A production line is producing window hinges for an automotive company. The weight in kilograms of these parts is very close to the maximum allowed for a standard shipping container and must be controlled. A sample of 15 parts was taken at random from the production line and weighed. The weights are shown below in Kg.

0.297

0.296

0.294

0.297

0.296

0.295

0.293

0.301

0.301

0.295

0.295

0.301

0.296

0.302

0.296

The standard deviation of the entire population produced at the plant was previously found to be

0.024 Kg. What percentage of the data would fall below the lower specification limit of

0.274Kg? What percentage of the data would fall above 0.347Kg?

 
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Hampshire Company

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The Hampshire Company manufactures umbrellas that sell for $12.50 each. In 2014, the company made and sold 60,000 umbrellas. The company had fixed manufacturing costs of $216,000. It also had fixed costs for administration of $79,525. The per-unit costs of each umbrella are as follows:

Direct Materials: $3.00

Direct Labor: $1.50

Variable Manufacturing Overhead: $0.40

Variable Selling Expenses: $1.10

The information below represents the beginning and ending inventory amounts along with the production and sales for the month in umbrella units.

Beginning Inventory: 0 Umbrellas

Production: 80,000 Umbrellas

Sales: 60,000 Umbrellas

Ending Inventory: 20,000 Umbrellas

Using the information provided above and the costs and sales information provided in Section I, complete the following in the Hampshire Company Spreadsheet in order to assist you in responding to all components of Section II:

  • design the variable costing income statement.
  • design the absorption costing income statement.
 
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