Mile High Cycles
Essay by ammar15 • October 3, 2016 • Essay • 404 Words (2 Pages) • 1,233 Views
Mile High Cycles
The following are the tables used to solve the problem.
Budgeted Costs | ||||||||||
Frame Assembly | Budgeted | Actual | Variance |
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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 | |||||
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Wheel assembly |
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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 | |||||
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Final assembly |
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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 | |||||
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Overhead costs |
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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 | |||||
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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 |
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Frame Assembly |
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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 |
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| -$82,663 | F | |||||
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Wheel assembly | Rework Parts = [$25,000/10,800=$2.31] |
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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 |
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| $50,650.00 | U | |||||
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Final assembly | Rework Parts = [$45,000/10,800=$4.17] |
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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 |
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| $231,200.00 | U |
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