# Mile High Cycles

Essay by   •  October 3, 2016  •  Essay  •  404 Words (2 Pages)  •  622 Views

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Mile High Cycles

The following are the tables used to solve the problem.

 Budgeted Costs Frame Assembly Budgeted Actual Variance Steel tubing (\$3,300,000/10,000)*10,800 = \$3,564,000 \$3,564,000 \$3,572,100 \$8,100 U Paint (\$25,000/10,000)*10,800 = \$27,000 \$27,000 \$28,187 \$1,187 U Labor (\$1,500,000/10,000)*10,800 = \$1,620,000 \$1,620,000 \$1,528,050 -\$91,950 F Total frame (\$4,825,000/10,000)*10,800 = \$5,211,000 \$5,211,000 \$5,128,337 -\$82,663 F Wheel assembly Parts (\$1,200,000/10,000)*10,800 = \$1,296,000 \$1,296,000 \$1,317,600 \$21,600 U Rework parts \$0 \$25,000 \$25,000 U Labor (\$65,000/10,000)*10,800 = \$70,200 \$70,200 \$74,250 \$4,050 U Total wheel (\$1,265,000/10,000)*10,800 = \$1,366,200 \$1,366,200 \$1,416,850 \$50,650 U Final assembly Parts (\$3,500,000/10,000)*10,800 = \$3,780,000 \$3,780,000 \$3,963,600 \$183,600 U Rework parts \$0 \$45,000 \$45,000 U Labor (\$105,000/10,000)*10,800 = \$113,400 \$113,400 \$116,000 \$2,600 U Total final assembly (\$3,605,000/10,000)*10,800 = \$3,893,400 \$3,893,400 \$4,124,600 \$231,200 U Overhead costs Rent \$250,000 \$250,000 \$250,000 \$0 - Office staff \$100,000 \$100,000 \$100,000 \$0 - Depreciation \$100,000 \$100,000 \$100,000 \$0 - Variable Overhead [((2/3)*\$750,000)/10,000]*10,800 = \$540,000 \$540,000 \$600,000 \$60,000 U Fixed Overhead (1/3)*\$750,000 = \$250,000 \$250,000 \$250,000 \$0 - Total overhead (\$250,000+\$100,000+\$100,000+\$540,000+\$250,000) = \$1,240,000 \$1,240,000 \$1,300,000 \$60,000 U Total Annual Costs (\$5,211,000+\$1,366,200+\$3,893,400+\$1,240,000) = \$11,710,600 \$11,710,600 \$11,969,787 \$259,187 U Predetermined rate per unit (\$1,200,000/10,000) = \$120 FOH Applied (10,800*\$120) = \$1,296,000 Total FOH Variance (\$1,300,000-\$1,296,000) = \$4,000 U Volume Variance (\$1,296,000-\$1,240,000) = \$56,000 F Spending Variance (\$1,240,000-\$1,300,000) = -\$60,000 U
 Std Price Act Price Std Qty Act Qty Usage Variance Price Variance Total Variance Frame Assembly Steel tubing \$30.00 \$31.50 (110,000/10,000)*10,800 = 118,800 113,400 -\$162,000.00 F \$170,100.00 U \$8,100.00 U Paint \$20.00 \$20.50 (1,250/10,000)*10,800 = 1,350 1,375 \$500.00 U \$687.50 U \$1,187.50 U Labor \$15.00 \$15.25 (100,000/10,000)*10,800 = 108,000 100,200 -\$117,000.00 F \$25,050.00 U -\$91,950.00 F Total frame -\$82,663 F Wheel assembly Rework Parts = [\$25,000/10,800=\$2.31] Parts \$120.00 \$122.00 (10,000/10,000)*10,800 = 10,800 10,800 \$0.00 - \$21,600.00 U \$21,600.00 U Rework Parts \$0.00 \$2.31 (10,000/10,000)*10,800 = 10,800 10,800 \$0.00 - \$25,000.00 U \$25,000.00 U Labor \$13.00 \$13.50 (5,000/10,000)*10,800 = 5,400 5,500 \$1,300.00 U \$2,750.00 U \$4,050.00 U Total wheel \$50,650.00 U Final assembly Rework Parts = [\$45,000/10,800=\$4.17] Parts \$350.00 \$367.00 (10,000/10,000)*10,800 = 10,800 10,800 \$0.00 - \$183,600.00 U \$183,600.00 U Rework Parts \$0.00 \$4.17 (10,000/10,000)*10,800 = 10,800 10,800 \$0.00 - \$45,000.00 U \$45,000.00 U Labor \$14.00 \$14.50 (7,500/10,000)*10,800 = 8,100 8,000 -\$1,400.00 F \$4,000.00 U \$2,600.00 U Total final assembly \$231,200.00 U

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