Reference no: EM131188177
Part Nine
in December (month 24) of year 2 of operations, Big Al’s produced and sold 32,675 pizzas, consisting of 30,570 meat pizzas and 2,105 veggie pizzas. The budgeted sales price for meat pizzas was $5.00, and for veggie pizzas, $5.25. The estimated production and sales during December was 31,678 meat pizzas and 2,595 veggie pizzas.
Required:
A. Compute the price and volume variances for sales, assuming that Big Al’s sold all pizzas produced for $137,565 (meat) and $9,051 (veggie). What might explain these variances?
B. Compute the price and quantity variances for direct materials for each type of pizza, assuming that Big Al’s paid $29,093 for 32,325 units of raw material for meat pizzas and $1,453 for 2,401 units of raw material for veggie pizzas.(A unit consists of dough shell, sauce, cheese, meat or veggies, and assembly materials.) In addition, 30,995 units were used to produce meat pizzas, and 2,149 units were used to produce veggie pizzas. How would these variances be interpreted? What might explain these variances? Would you consider them to be large enough to be important?
C. Compute the labor rate and efficiency variances, assuming that Big Al’s paid $71,350 in labor costs for 7,150 hours of labor for meat pizzas and $6,425 in labor costs for 650 hours of labor for veggie pizzas. How would these variances be interpreted? What might explain them? Would you consider them large enough to be important?
D. Using the predetermined overhead rate from Part 3 (with direct labor hours as the cost driver), compute the variable overhead rate and efficiency variances. Assume that Big Al’s paid $20,852 in total overhead costs, consisting of $17,002 of variable overhead and $3,850 of fixed overhead. How would these variances be interpreted? What might explain these variances? Would you consider them large enough to be important?
E. How might Big Al’s extend its variance analysis to be compatible with its use of activity-based costing as discussed in Part 3?
Put the matrix in reduce row echelon form
: Writing this set of equations as an augmented matrix. Solve bothe the equations.
|
What is your forecast of growth
: A stock is trading at $90 per share. The stock is expected to have a year-end dividend of $5 per share (D1 = $5), and it is expected to grow at some constant rate g throughout time. The stock’s required rate of return is 15%. If markets are efficient..
|
Calculate amount of debt and equity funding security systems
: Security Systems, Inc. needs to raise $150 million for asset expansion. As it raises the capital funding, Nuran wants to maintain its current debt ratio of 60 percent. Calculate the amount of debt and equity funding Nuran Security Systems will need t..
|
How much should he pay taxes on his social security benefits
: John is receiving $1,000 each month from Social Security, and he works at a local store as a part-time worker to earn extra $1,000 each month. He has very small amounts (less than $1,000 a year) of interest and dividends income. He is a single filer...
|
Compute the price and volume variances for sales
: Compute the price and volume variances for sales, assuming that Big Al’s sold all pizzas produced for $137,565 (meat) and $9,051 (veggie). What might explain these variances? Compute the labor rate and efficiency variances, assuming that Big Al’s pai..
|
Depreciated using straight-line method to zero salvage value
: Cascade Water Company (CWC) currently has 30 000 shares of common stock outstanding, trading at a price of $42 per share. CWC also has 500 000 bonds outstanding that are currently trading at $923.38 per bond. CWC has no preferred stock outstanding an..
|
Explain how the stock market has performed in recent years
: Identify the different types of financial markets and financial institutions, and explain how these markets and institutions enhance capital allocation. Explain how the stock market operates, and list the distinctions between the different types of s..
|
What will be the amount funded with equity for the project
: As a financial manager for WillPower, Inc, you have the following information: What will be the amount funded with equity for the project ? Compute the amount of the dividend .
|
What is the cash flow at year one
: You have been asked by the president of your company to evaluate the proposed acquisition of a new special-purpose machine. The machine's total price including installation and delivery is $70,000. What is the initial investment ? What is the Cash F..
|