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ACCT 621: Week 10 - Homework Questions

The document contains 5 questions related to flexible budgeting and management accounting. Question 1 asks to calculate manufacturing costs for 3,200 units using cost data provided. Question 2 asks to compute flexible budget costs for 900 units using data from a 1,000 unit month. Question 3 asks to prepare a performance report explaining variances for actual costs that were higher than budgeted costs. Question 4 asks to calculate flexible budget costs for 2,200 units using data from a 2,000 unit month. Question 5 provides multiple choice definitions for budgeting and management accounting terms.

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60 views3 pages

ACCT 621: Week 10 - Homework Questions

The document contains 5 questions related to flexible budgeting and management accounting. Question 1 asks to calculate manufacturing costs for 3,200 units using cost data provided. Question 2 asks to compute flexible budget costs for 900 units using data from a 1,000 unit month. Question 3 asks to prepare a performance report explaining variances for actual costs that were higher than budgeted costs. Question 4 asks to calculate flexible budget costs for 2,200 units using data from a 2,000 unit month. Question 5 provides multiple choice definitions for budgeting and management accounting terms.

Uploaded by

DINESH SODHI
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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ACCT 621: Week 10 –

Homework Questions
Question 1
Devlin Manufacturing makes a single product. Expected manufacturing costs are as follows:
Variable costs
Direct materials $6.50 per unit
Direct labor 2.40 per unit
Manufacturing overhead 1.10 per unit
Fixed costs per month
Supervisory salaries $13,600
Depreciation 5,500
Other fixed costs 2,200

Instructions
Determine the amount of manufacturing costs for a flexible budget level of 3,200 units per month.
Question 2
Cyber Construction’s manufacturing costs for August when production was 1,000 units appear below:
Direct material $12 per unit
Direct labor $7,500
Variable overhead 6,000
Factory depreciation 9,000
Factory supervisory salaries 7,800
Other fixed factory costs 2,500

Instructions
Compute the flexible budget manufacturing cost amount for a month when 900 units are produced.

Question 3
Point, Inc. produces men’s shirts. The following budgeted and actual amounts are for 2022:
Cost Budget at 2,500 units Actual Amounts at 2,800 units
Direct materials $65,000 $75,000
Direct labor 70,000 78,000
Fixed overhead 35,000 34,500

Instructions
Prepare a performance report for Point, Inc. for the year explaining budget, actual and variances. State
whether each variance is favourable or unfavourable.
Question 4
Telemark Production’s manufacturing costs for July when production was 2,000 units appears below:
Direct materials $10 per unit
Factory depreciation $16,000
Variable overhead 10,000
Direct labor 4,000
Factory supervisory salaries 11,600
Other fixed factory costs 3,000

Instructions
How much is the flexible budget manufacturing cost amount for a month when 2,200 units are
produced?

Question 5

A. Budgetary control G. Responsibility reporting system


B. Static budget H. Return on Investment
C. Flexible budget I. Profit center
D. Responsibility accounting J. Investment center
E. Controllable costs K. Indirect fixed costs
F. Management by exception L. Direct fixed costs

____ 1. The review of budget reports by top management directed entirely or primarily to differences
between actual results and planned objectives.

____ 2. A part of management accounting that involves accumulating and reporting revenues and
costs on the basis of the individual manager who has the authority to make the day-to-day
decisions about the items.

____ 3. The preparation of reports for each level of responsibility shown in the company’s
organization chart.

____ 4. A projection of budget data at one level of activity.

____ 5. Costs that a manager has the authority to incur within a given period of time.

____ 6. The use of budgets to control operations.

____ 7. A projection of budget data for various levels of activity.

____ 8. A responsibility center that incurs costs, generates revenues, and has control over the
investment funds available for use.

____ 9. Costs that relate specifically to a responsibility center and are incurred for the sole benefit of
the center.

____ 10. A responsibility center that incurs costs and also generates revenues.

____ 11. Costs which are incurred for the benefit of more than one profit center.

____ 12. A measure of the profitability of an investment center computed by dividing controllable
margin (in dollars) by average operating assets.

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