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Mile High Cycles

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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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