Scribd
Upload
14 views2 pages

Manufacturing Cost Analysis and Reports

This document contains a lab/review worksheet with 4 problems: 1) Compute the flexible budget for a manufacturing company producing 900 units based on given costs for 1000 units. 2) Prepare a responsibility report comparing budgeted and actual costs for a shirt company producing more units than budgeted. 3) Compute the controllable margin and return on investment for a service division given sales, variable costs, controllable fixed costs, and average operating assets. 4) Compute the controllable margin and expected return on investment for two proposed alternatives to maximize return on investment for the service division: a) reducing average operating assets, b) increasing sales.

Uploaded by

Kyle Anders
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
14 views2 pages

Manufacturing Cost Analysis and Reports

This document contains a lab/review worksheet with 4 problems: 1) Compute the flexible budget for a manufacturing company producing 900 units based on given costs for 1000 units. 2) Prepare a responsibility report comparing budgeted and actual costs for a shirt company producing more units than budgeted. 3) Compute the controllable margin and return on investment for a service division given sales, variable costs, controllable fixed costs, and average operating assets. 4) Compute the controllable margin and expected return on investment for two proposed alternatives to maximize return on investment for the service division: a) reducing average operating assets, b) increasing sales.

Uploaded by

Kyle Anders
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

Chapter 10 Lab/Review Worksheet

1. Cyber Construction’s manufacturing costs for August when production was 1,000 units appear below:
Direct Materials $11,000
Direct Labor $8,500
Variable Overhead $6,000
Factory Depreciation $4,000
Factory Supervisory Salaries $9,800
Other Fixed Factory Costs $1,500

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

Direct Materials
Direct Labor
Variable Overhead
Factory Depreciation
Factory Supervisory Salaries
Other Fixed Factory Costs
Total

2. Point, Inc. produces men’s shirts. The following budgeted and actual amounts are for 2018:

Cost Budgeted Amounts at 2,500 units Actual Amounts at 2,900 units


Direct materials $55,000 $65,000
Direct labor $80,000 $83,000
Fixed overhead $30,000 $34,500

Prepare a responsibility report for Point, Inc. for the year.

POINT, INC.
Manufacturing Performance Responsibility Report
For the Year Ended December 31, 2018

Budget (2,900 units) Actual Differences


Direct Materials $65,000
Direct Labor $83,000
Fixed Overhead $34,500
Total costs
Chapter 10 Lab/Review Worksheet

3. The service division of Smithberg Industries reported the following results for 2018.

Sales $800,000
Variable Costs $500,000
Controllable Fixed Costs $125,000
Average Operating Assets $825,000

Compute the controllable margin and the return on investment for 2018.

4. Management is considering the following independent courses of action in 2019 in order to maximize the
return on investment for this division. (Based on original financial information above).

Compute the controllable margin and the expected ROI for each proposed alternative.

a) Reduce average operating assets by $125,000 with no change in controllable margin.

b) Increase sales by $100,000 with no change in the contribution margin percentage (contribution
margin ratio).

You might also like