QUESTION 4 Caden Family Orange Groves processes a variety of fresh juices. The company has the following expenses for July: Wages of factory workers Freshness seals/caps for juice bottles Reconfiguring the factory layout Customer help line Costs of refrigerated trucks used to deliver juice Depreciation expense on bottling machines $75,400 $3900 $102,300 $2700 $17,000 $63,300 $54,900 $27,100 $89,800 $4800 Glass juice bottles Commissions for salespeople Salaries of nutrition researchers Costs of maintaining website used for customer orders What is the total cost for the customer service category of the value chain? $80,300 O $11,400 O $2700 O $34,600
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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- Current Attempt in Progress Concord rents DVDS that are mailed out to customers upon demand. Concord has identified three activities involved in getting the videos to its customers. Information on those activities for the month of July follows: Estimated Overhead Cost Expected Use of Cost Drivers Cost Pools Cost Drivers Order taking costs $20230 Number of orders 202300 orders Technology support Number of 234700 minutes 11300 minutes Picking and shipping Number of DVDs 36920 330800 DVDS costs During July, the Tucker family placed 18 orders consisting of 23 DVDS. Tucker required 6 minutes of tech support. Customers pay $12 per month to rent unlimited DVDS. Using ABC, how much overhead is applied to the Tucker family account for order taking costs? O $4.10 O $1.80 O $2.30 O $6.40 Attempts: 0 of 1 used Save for Later Submit Answer 9:24 P 10/13/2 hpView Policies Current Attempt in Progress E-Flix rents DVDS that are mailed out to customers upon demand. E-Flix has identified three activities involved in getting the videos to its customers. Information on those activities for the month of July follows: Estimated Expected Use of Cost Drivers Cost Pools Cost Drivers Overhead Cost Order taking costs Number of orders $20,592 187,200 orders Technology support Number of minutes $11,700 234,000 minutes Picking and shipping Number of DVDS $39,624 330,200 DVDS costs During July, the Tucker family placed 17 orders consisting of 21 DVDs. Tucker required 7 minutes of tech support. Customers pay $9.00 per month to rent unlimited DVDS. Using ABC, how much overhead is applied to the Tucker family account for order taking costs? O $4.74 O $2.52 O $1.871 O $6.45 Submit Answer Save for Later Attempts: 0 of 1 used 2:27 PM 10/13/20 eManufacturing, Cost Classification, Product Costs and Selling and Administrative Costs, Income Statement Pop’s Drive-Thru Burger Heaven produces and sells quarter-pound hamburgers. Each burger is wrapped and put in a “burger bag,” which also includes a serving of fries and asoft drink. The price for the burger bag is $3.50. During December, 10,000 burger bags were sold. The restaurant employs college students part time to cook and fill orders. There is one supervisor (the owner, John Peterson). Pop’s maintains a pool of part-time employees so that the number of employees scheduled can be adjusted to the changes in demand. Demand varies on a weekly as well as a monthly basis. A janitor is hired to clean the building early each morning. Cleaning supplies are used by the janitor, as well as the staff, to wipe counters, wash cooking equipment, and so on. Thebuilding is leased from a local real estate company; it has no seating capacity. All orders are filled on a drive-thru basis. The…
- Customer Number of Number of Number of Service Setups Customer Orders Machine Hours Inspections Requests Units White sugar 3,170 180 240 720 50 7,925 Brown sugar 2,020 270 360 1,980 320 5,050 Powdered sugar 2,010 250 600 900 130 5,025 Total 7,200 700 1,200 3,600 500 18,000 Each product requires 0.9 machine hour per unit. Required: If required, round all per unit amounts to the nearest cent. 1. Determine the activity rate for each activity. Production 2$ per machine hour Setup $ per setup Inspection per move Shipping per cust. ord. Customer service per customer service request 2. Determine the total and per-unit activity cost for all three products. Total Activity Cost Activity Cost Per Unit White sugar $ Brown sugar Powdered sugarE-Flix rents DVDS that are mailed out to customers upon demand. E-Flix has identified three activities involved in getting the videos to its customers. Information on those activities for the month of July follows: Estimated Overhead Expected Use of Cost Pools Cost Drivers Cost Cost Drivers $20,592 187,200 orders Order taking costs Number of orders 11,700 234,000 minutes Technology support Number of minutes Picking and shipping Number of 330,200 DVDs 39,624 DVDS costs During July, the Tucker family placed 17 orders consisting of 21 DVDS. Tucker required 7 minutes of tech support. Customers pay $9.00 per month to rent unlimited DVDS. Using ABC, how much overhead is applied to the Tucker family account for technology support? O $0.05 O$1.87 O$0.35 Some other answer 2:33 P ) 10/13/20 EtCurrent Attempt in Progress Splish College provides its own housekeeping services. The College director would like to outsource this service and has found a company that will provide the service for $49 per hour. The following information has been collected about the cost per hour to the college for performing its own housekeeping services Cost per hour of service: Cleaning supplies $3 Direct labour costs $27 Variable overhead $1 Total hours of housekeeping services per year 3,040 Total fixed overhead $55,080 (a) Your answer is partially correct Determine whether Splish College should outsource housekeeping, assuming that 50% of fixed costs can be eliminated if the service is outsourced. (If an amount reduces the net income then enter with a negative sign preceding the number, eg-15,000 or parenthesis, eg (15,000). While alternate approaches are possible, irrelevant fixed costs should be included in both options when solving this problem.) amber of hours: 040 In-house eaning supplies…
- k ces Marvin's Kitchen Supply delivers restaurant supplies throughout the city. The firm adds 10 percent to the cost of the supplies to cover the delivery cost. The delivery fee is meant to cover the cost of delivery. A consultant has analyzed the delivery service using activity- based costing methods and identified four activities. Data on these activities follow. Data on these Activity Processing order Loading truck Delivering merchandise Processing invoice Total overhead Cost Driver Number of orders. Number of items. Number of orders Number of invoices Order value Number of orders. Number of items Number of invoices Cost Driver Volume 52 600 12 Cost $75,000 150,000 90,000 72,000 $387,000 Driver Volume 5,000 orders 100,000 items Two of Marvin's customers are City Diner and Le Chien Chaud. Data for orders and deliveries to these two customers follow. City Diner Le Chien Chaud $75,000 $99, 900 110 1,500 150 5,000 orders 4,000 invoices Required: a. What would the delivery charge for…Exercise 7-3 (Algo) Compute Activity Rates [LO7-3] Green Thumb Gardening is a small gardening service using activity-based costing to estimate costs for pricing and other purposes. The owner of the company believes costs are driven primarily by the size of customer lawns, the size of customer garden beds, the distance to travel to customers, and the number of customers. In addition, the costs of maintaining garden beds depend on whether the beds are low-maintenance beds (mainly ordinary trees and shrubs) or high-maintenance beds (mainly flowers and exotic plants). Accordingly, the company uses the five activity cost pools listed below: Activity Cost Pool Caring for lawn Caring for garden beds-low maintenance Caring for garden beds-high maintenance Travel to jobs Customer billing and service Activity Cost Pool Caring for lawn Caring for garden beds-low maintenance Caring for garden beds-high maintenance Travel to jobs Customer billing and service Square feet of lawn Square feet of…Question 2 Wexxon Ple currently makes four products for sale on the local market. Details of the four products and relevant information are given below for one period: Product Output in units Cost per unit: Direct material $40 Direct labour $28 Machine hours (per unit) 4 Axxon 120 Machine Department costs Set up costs Stores receiving costs Inspection/ Quality control Material Handling and Dispatch COST Set up cost Stores receiving Beach 100 Inspection/ Quality Control Material handling and dispatch $50 $21 3 Capal 80 The four products are similar and are usually produced in production runs of 20 units and sold in batches of 10 units. The production overhead is currently absorbed by using a machine hour rate, and the total of the production overhead for the period has been analyzed as follows: $30 $14 2 S 10,430 5,250 3,600 2,100 4,620 Delta 120 You have ascertained that the cost drivers to be used are as listed below for the overhead costs shown: $60 $21 3 COST DRIVER Number of…
- Assigning Costs to Activities McCourt Company produces small engines for lawnmower producers. The accounts payable department at McCourt has 10 clerks who process and pay supplier invoices. The total cost of their salaries is $550,000. The work distribution for the activities that they perform is as follows: Activity Percentage of Time on Each Activity Comparing source documents 10 % Resolving discrepancies 45 % Processing payment 45 % Required: Assign the cost of labor to each of the three activities in the accounts payable department. Round your answers to the nearest dollar. Activity Cost Assignment Comparing source documents $ Resolving discrepancies $ Processing payment $Activity Levels and Cost Drivers Steve’s Slop Shop, a small hamburger shop, has identified theresources used in its operations (assume each customer’s order is a batch for this example):a. Breadb. Hourly workers that cook hamburgersc. Store rentd. Ground beefe. Catsupf. Advertising for Triple-Burger specialg. Salary for the store managersh. Utilitiesi. $1-off-coupon for each orderj. Bags for each orderRequired1. Classify its costs as unit-level, batch-level, product-level, or facility-level costs.2. Suggest a possible cost driver for each of the above items.Factory Closing DecisionThe Dough Knot Corporation bakes breads, pastries, cookies and every other baked goodimaginable. The company has a number of factories around the world, including the ELACCookie Factory, which makes… cookies.Michael Schrute is the factory manager of the ELAC Cookie Factory but also serves as theregional production manager for the company. His budget as the regional manager is charged tothe ELAC Cookie Factory.Schrute has just heard that The Dough Knot has received a bid from an outside vendor to supplythe equivalent of the entire annual output of the ELAC Cookie Factory for $35 million. Schrutewas astonished at the low outside bid because the budget for the ELAC Cookie Factory’soperating costs for the upcoming year was set at $52.0 million. If this bid is accepted, the ELACCookie Factory will be closed down.The budget for ELAC Cover’s operating costs for the coming year is presented below.ELAC Cookie FactoryAnnual Budget for Operating Costs Baking flour $…