Prepare a performance report for september using air miles

Assignment Help Accounting Basics
Reference no: EM131590644

Problem 1 -

Vision Sky Tours is a sightseeing tour company based in New England. The firm specializes in aerial tours of the New England countryside and coastline. Until recently, the company had no accounting department. Routine tasks, such as billing, were handled by an individual who had little formal training in accounting. As the business began to grow, however, the owner recognized the need for more formal accounting procedures. Jacqueline Smith was hired as a new controller.

During her first week on the job, Smith was given the following performance report. The report was prepared by Red Sky, the company's manager of aircraft operations, who was planning to present it to the owner the next morning. "Look at these favorable variances for fuel and so forth," Sky noted." My operations people are really doing a great job." Later that day, Smith looked at the performance report more carefully.

2461_figure.png

1. Based on the information in Red Sky's report, prepare a performance report for September using air miles as the cost driver.

2. In spite of several favorable expense variances shown on Red Sky's report, the company's September operating income was only about two-thirds of the expected level. Why?

3. Write a brief memo to the manager of aircraft operations explaining why his variance report is misleading.

Problem 2 -

Your next-door neighbor recently began a new job as assistant controller for Continental Company. As her first assignment, she prepared a performance report for March. She was scheduled to present the report to management the next morning, so she brought it home to review. As the two of you chatted briefly, you advised her that you were studying cost control and variance analysis. Thus, she decided to show you the report she had prepared. Unfortunately, your dog thought the report was a toy. The pup made a flying leap and got a firm grip on the report. After chasing the dog around the block, you managed to wrest the report from your dog. The report was torn to bits. Only some data are still legible on the report. This information follows:

573_figure1.png

In addition to the data still legible on the performance report, your neighbor happened to remember the following facts.

  • Planned production of Continental's sole product was 500 units more than the actual production.
  • All of the direct material purchased in March was used in production.
  • There were no beginning or ending inventories.
  • Variable and fixed overhead are applied based on direct-labor hours. The fixed overhead rate is $6.00 per hour.

Feeling guilty, you have offered to help your neighbor reconstruct the following facts, which will be necessary for her presentation.

1. Planned production (in units).

2. Actual production (in units).

3. Actual fixed overhead.

4. Total standard allowed direct-labor hours.

5. Actual direct-labor rate.

6. Standard variable-overhead rate.

7. Actual variable-overhead rate.

8. Standard direct-material quantity per unit.

9. Direct-material price variance.

10. Applied fixed overhead.

11. Fixed-overhead volume variance.

Reference no: EM131590644

Questions Cloud

How effective are reducing recidivism of disposed juveniles : How effective are they at reducing recidivism of disposed juveniles. What is meant by selective incapacitation
Present value of multiple annuities : Present Value of Multiple Annuities A small business owner visits his bank to ask for a loan. how much would it be willing to lend the business owner?
What is its final height of the tower : An iron tower in is 552 feet tall on a cold day (T = -6.3 degrees Celsius). What is its final height (total) of the tower on a hot day when the temperature.
What happened to them during the financial crisis : what they do and what happened to them during the financial crisis. State 4 firm-specific facts during the financial crisis.
Prepare a performance report for september using air miles : Based on the information in Red Sky's report, prepare a performance report for September using air miles as the cost driver
Determinants of interest rate for individual securities : Determinants of Interest Rate for Individual Securities The Wall Street Journal reports that the rate on 3-year Treasury securities is 9.00 percent,
Velocity of a wave on this bungee cord : If the force needed to stretch the bungee cord is 404 N, what is the velocity of a wave on this bungee cord?
What was capital gain of tips in percentage terms : What was the capital gain of the TIPS in percentage terms?
Short assignment with the try- catch error handling : This is a short assignment with the try- catch error handling files with exceptions that need to be caught locally in the program, Also it needs to be done in

Reviews

Write a Review

 

Accounting Basics Questions & Answers

  Problem regarding the maximum life spans

A reference book lists the following maximum life spans (in years) for animals in captivity: Source: The World Almanac and Book of Facts 2009, p. 329.

  The controller of olaf corporation wants to establish a

the controller of olaf corporation wants to establish a minimum rate of return and would like to use a weighted-average

  Mattel and hasbro are two of the largest and most

mattel and hasbro are two of the largest and most successful toy makers in the worldin terms of the products they sell

  What is the balance of the retained earnings account

Based on your response to Requirement a, determine the amount of net income reported on the 2013 income statement.

  Average manufacturing cost per unit

a. What is the average manufacturing cost per unit? b. What is the amount of ending finished goods inventory? c. What is the amount of gross margin?

  Sale of obsolete inventory at cost

The increase in ROI was attributed to a reduction in operating assets brought about by the sale of obsolete inventory at cost (the proceeds from the sale were used to reduce bank loans). By how much was inventory reduced?

  A perpetual inventory system

BE9-3 Kumar Inc. uses a perpetual inventory system. At January 1, 2014, inventory was $214,000 at both cost and market value. At December 31, 2014, the inventory was $286,000 at cost and $265,000 at market value.

  Information on current assets and current liabilities

Use the following information on current assets and current liabilities to compute and interpret the acid test ratio. Explain what the acid  test ratio of a company measures.

  According to many articles written on the subject the

according to many articles written on the subject the corporate world of the united states has been whacking away at

  What is this problem called in economics

What is this problem called in economics? Why does it exist in the first place? What can be done about it

  Accounting for credit card sales

On July 20, Wolverine presents credit card receipts to its bank in the amount of $10,000; the collection charge is 4%. Prepare the journal entry on Wolverine's books on July 20, the date of deposit.

  Dividends totaling 5000 were declared and paid to

lander inc. had the following balance sheet at december 31 2008lander inc. balance sheet december 31

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd