Compute the material price and usage variance for resin

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Reference no: EM132040217

Use the following information for "Mike's Water Fun" is available below:

Budgeted selling price is: $1,550

Budgeted production costs for one "Longboard" surfboard are as follows:

DM: Polyurethane blank core 1 @ $140 each

6 ounce fiberglass cloth 4 yards @ $4.00/sq. yd.

Resin 1.5 gallons @ $42/gallon

DL: 6 Hours @ $32/hr.

VMOH 6DLH @ $2/hr.

FMOH Budgeted at $163,800

Mike's Water Fun applies the FMOH using direct labor hours and the overhead rate is based on the budgeted production level.

Other costs are as budgeted as follows:

Shipping $40/surfboard

Fixed Selling and Admin costs (budgeted) $112,000

Budgeted production and sales for 2016 were 400 "Longboard" surfboards. This volume represents a projected 40% share of the total expected market in 2016 of 1000 professional shaped surfboards of similar type and quality in the California market.

The following actual results were recorded during 2016, for the "Longboard" surfboards:

Actual market size: 1,200 professional shaped surfboards

Actual production: 410 surfboards

Actual sales: 410 surfboards @ $1,565 per unit

Actual DM usage and cost:

425 polyurethane blank cores were purchased at a cost of $55,250. 418 blank cores were used in production

1,650 sq. yards of 6 ounce fiberglass cloth were purchased at a cost of $6,765. 1,599sq. yards were used in production.

650 gallons of resin were purchased for $29,900. 574 gallons of resin were used in production.

Actual DL hours worked 2,600 @ $30.75/hour

Actual VMOH: $5,460

Actual FMOH: $169,500

Actual shipping cost: $17,220

Actual selling and Admin cost: $115,000

Prepare a Flexible profit budget listing all revenues and costs for Mike's Water Fun in 2016?

Compute the sales price and sales volume variances based on selling price?

Compute the material price and usage variance for resin. The price variance should be calculated on the materials purchased?

Compute the direct labor rate and efficiency variances?

Calculate the fixed manufacturing overhead spending and production volume variances?

Reference no: EM132040217

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