Kaufmann Manufacturing Case Study
Question 1
1H- ($28,800)
2H- $1619, 800
$93= 1,619,800 dollars
$3 = (3dollars × 1,619,800 dollars)/ 93 dollars
=52,251.61 dollars
The amount of profit increase as a result of the higher price of Kaufmann’s finished goods equals to 52,251.61 dollars for the price change of 3 dollars. The finished goods price changed from 90 dollars to 93 dollars.
Question 2(a)
Actual Direct labour cost =4,813,000 dollars
Budgeted Direct Labour cost= 4,400,000 dollars
Variance = Actual Direct labour cost - Budgeted Direct Labour cost
=4,813,000 dollars - 4,400,000 dollars = 413,000 dollars
The variance is said to be unfavorable because the actual amount spent on direct labour is more than the amount that is budgeted for, meaning that Kaufmann spent more on …show more content…
It is therefore said to be unfavorable because the actual amount spent on material quantity is more than the standard or planned quantity. It means that the material quantity of Kaufmann manufacturing company was way above the budget
Question 4(a)
Actual power cost= 1,200,000 dollars
Standard power cost = 1,200,000dollars
Variance = Actual power cost – standard power cost
= 1,200,000dollars – 1,200,000dollars
=0 dollars
The total power cost variance equals to 0 dollars. It is therefore seen that the variance is neither favorable nor unfavorable because it is the same amount as the one that is planned for by Kaufmann manufacturing company.
Question 4(b)
Actual Quantity of Finished Goods produced= 188,000 units
Actual Power Rate per unit of Finished Goods=6.383 dollars
Standard Power Rate per unit Finished Goods= 6.000 dollars
Power Rate Variance:
= (Actual Quantity of Finished Goods produced × Actual Power Rate per unit of Finished Goods) – (Actual Quantity of Finished Goods produced × Standard Power Rate per unit Finished Goods)
= (188,000 units × 6.383 dollars) – (188,000units × 6 dollars)
=1,200,004 dollars - 1,128,000
1H- ($28,800)
2H- $1619, 800
$93= 1,619,800 dollars
$3 = (3dollars × 1,619,800 dollars)/ 93 dollars
=52,251.61 dollars
The amount of profit increase as a result of the higher price of Kaufmann’s finished goods equals to 52,251.61 dollars for the price change of 3 dollars. The finished goods price changed from 90 dollars to 93 dollars.
Question 2(a)
Actual Direct labour cost =4,813,000 dollars
Budgeted Direct Labour cost= 4,400,000 dollars
Variance = Actual Direct labour cost - Budgeted Direct Labour cost
=4,813,000 dollars - 4,400,000 dollars = 413,000 dollars
The variance is said to be unfavorable because the actual amount spent on direct labour is more than the amount that is budgeted for, meaning that Kaufmann spent more on …show more content…
It is therefore said to be unfavorable because the actual amount spent on material quantity is more than the standard or planned quantity. It means that the material quantity of Kaufmann manufacturing company was way above the budget
Question 4(a)
Actual power cost= 1,200,000 dollars
Standard power cost = 1,200,000dollars
Variance = Actual power cost – standard power cost
= 1,200,000dollars – 1,200,000dollars
=0 dollars
The total power cost variance equals to 0 dollars. It is therefore seen that the variance is neither favorable nor unfavorable because it is the same amount as the one that is planned for by Kaufmann manufacturing company.
Question 4(b)
Actual Quantity of Finished Goods produced= 188,000 units
Actual Power Rate per unit of Finished Goods=6.383 dollars
Standard Power Rate per unit Finished Goods= 6.000 dollars
Power Rate Variance:
= (Actual Quantity of Finished Goods produced × Actual Power Rate per unit of Finished Goods) – (Actual Quantity of Finished Goods produced × Standard Power Rate per unit Finished Goods)
= (188,000 units × 6.383 dollars) – (188,000units × 6 dollars)
=1,200,004 dollars - 1,128,000