Acc 201

Question 1: 1. Activity-cost-driver rate for packing:

,950hours)) = 157.89/ hr

2. ABC system for sugar cookie

A. Estimated overhead cost per 1000 cookies

Oven costs: ,)) x 1 = $110.53

Packing costs: 157.89 x 0.5 = $78.95

? Total overhead costs: $189.48

B. Estimated operating profit for cookies

Selling price:

$0.75 x 1,000 = $750

Less Direct material costs:

$0.15 x 1000 = ($150)

Less Direct labor costs:

$0.02 x 1000 = ($20)

Less total overhead costs:

($189.48)

? Profit: $390.52

3. Traditional system for sugar cookie

A. Estimated overhead cost per 1000 cookies

,)) = $150

B. Estimated operating profit for cookies

Selling price:

$0.75 x 1,000 = $750

Less Direct material costs:

$0.15 x 1000 = ($150)

Less Direct labor costs:

$0.02 x 1000 = ($20)

Less total overhead costs:

($150)

? Profit: $430

Question 2: a.

b.

|Actual result |Flexible |Standard result |
|(Actual input quantity x Actual price) |(Actual input quantity x Budgeted price) |(Budgeted input quantity |
| | |x budgeted price) |

Direct material
3, 900 x $7.75 3,900 x $7.5 4,000 x $7.5 $30,225 $29,250 $30,000

Price variance Efficiency variance $975(U) $750(F)

$225(U) Flexible budgeted variance

Direct labor:
1,240 x $9.25 1,240 x $9 1,200 x $9 $11,470 $11,160 $10,800

Price variance Efficiency