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Asked by Alaina Harry on Apr 24, 2024

Milanese Corporation manufactures one product. It does not maintain any beginning or ending Work in Process inventories. The company uses a standard cost system in which inventories are recorded at their standard costs and any variances are closed directly to Cost of Goods Sold. There is no variable manufacturing overhead. The company's balance sheet at the beginning of the year was as follows:
Milanese Corporation manufactures one product. It does not maintain any beginning or ending Work in Process inventories. The company uses a standard cost system in which inventories are recorded at their standard costs and any variances are closed directly to Cost of Goods Sold. There is no variable manufacturing overhead. The company's balance sheet at the beginning of the year was as follows: The standard cost card for the company's only product is as follows: The standard fixed manufacturing overhead rate was based on budgeted fixed manufacturing overhead of $186,000 and budgeted activity of 12,000 hours.During the year, the company completed the following transactions:Purchased 52,400 gallons of raw material at a price of $8.90 per gallon.Used 46,380 gallons of the raw material to produce 17,800 units of work in process.Assigned direct labor costs to work in process. The direct labor workers (who were paid in cash) worked 11,080 hours at an average cost of $18.90 per hour.Applied fixed overhead to the 17,800 units in work in process inventory using the predetermined overhead rate multiplied by the number of direct labor-hours allowed. Actual fixed overhead costs for the year were $197,100. Of this total, $122,100 related to items such as insurance, utilities, and indirect labor salaries that were all paid in cash and $75,000 related to depreciation of manufacturing equipment.Transferred 17,800 units from work in process to finished goods.Sold for cash 17,700 units to customers at a price of $52.30 per unit.Completed and transferred the standard cost associated with the 17,700 units sold from finished goods to cost of goods sold.Paid $53,000 of selling and administrative expenses.Closed all standard cost variances to cost of goods sold.Required:1. Compute all direct materials, direct labor, and fixed overhead variances for the year.2. Enter the beginning balances and record the above transactions in the worksheet that appears below. Because of the width of the worksheet, it is in two parts. In your text, these two parts would be joined side-by-side to make one very wide worksheet. 3. Determine the ending balance (e.g., 12/31 balance) in each account. The standard cost card for the company's only product is as follows:
Milanese Corporation manufactures one product. It does not maintain any beginning or ending Work in Process inventories. The company uses a standard cost system in which inventories are recorded at their standard costs and any variances are closed directly to Cost of Goods Sold. There is no variable manufacturing overhead. The company's balance sheet at the beginning of the year was as follows: The standard cost card for the company's only product is as follows: The standard fixed manufacturing overhead rate was based on budgeted fixed manufacturing overhead of $186,000 and budgeted activity of 12,000 hours.During the year, the company completed the following transactions:Purchased 52,400 gallons of raw material at a price of $8.90 per gallon.Used 46,380 gallons of the raw material to produce 17,800 units of work in process.Assigned direct labor costs to work in process. The direct labor workers (who were paid in cash) worked 11,080 hours at an average cost of $18.90 per hour.Applied fixed overhead to the 17,800 units in work in process inventory using the predetermined overhead rate multiplied by the number of direct labor-hours allowed. Actual fixed overhead costs for the year were $197,100. Of this total, $122,100 related to items such as insurance, utilities, and indirect labor salaries that were all paid in cash and $75,000 related to depreciation of manufacturing equipment.Transferred 17,800 units from work in process to finished goods.Sold for cash 17,700 units to customers at a price of $52.30 per unit.Completed and transferred the standard cost associated with the 17,700 units sold from finished goods to cost of goods sold.Paid $53,000 of selling and administrative expenses.Closed all standard cost variances to cost of goods sold.Required:1. Compute all direct materials, direct labor, and fixed overhead variances for the year.2. Enter the beginning balances and record the above transactions in the worksheet that appears below. Because of the width of the worksheet, it is in two parts. In your text, these two parts would be joined side-by-side to make one very wide worksheet. 3. Determine the ending balance (e.g., 12/31 balance) in each account. The standard fixed manufacturing overhead rate was based on budgeted fixed manufacturing overhead of $186,000 and budgeted activity of 12,000 hours.During the year, the company completed the following transactions:Purchased 52,400 gallons of raw material at a price of $8.90 per gallon.Used 46,380 gallons of the raw material to produce 17,800 units of work in process.Assigned direct labor costs to work in process. The direct labor workers (who were paid in cash) worked 11,080 hours at an average cost of $18.90 per hour.Applied fixed overhead to the 17,800 units in work in process inventory using the predetermined overhead rate multiplied by the number of direct labor-hours allowed. Actual fixed overhead costs for the year were $197,100. Of this total, $122,100 related to items such as insurance, utilities, and indirect labor salaries that were all paid in cash and $75,000 related to depreciation of manufacturing equipment.Transferred 17,800 units from work in process to finished goods.Sold for cash 17,700 units to customers at a price of $52.30 per unit.Completed and transferred the standard cost associated with the 17,700 units sold from finished goods to cost of goods sold.Paid $53,000 of selling and administrative expenses.Closed all standard cost variances to cost of goods sold.Required:1. Compute all direct materials, direct labor, and fixed overhead variances for the year.2. Enter the beginning balances and record the above transactions in the worksheet that appears below. Because of the width of the worksheet, it is in two parts. In your text, these two parts would be joined side-by-side to make one very wide worksheet.
Milanese Corporation manufactures one product. It does not maintain any beginning or ending Work in Process inventories. The company uses a standard cost system in which inventories are recorded at their standard costs and any variances are closed directly to Cost of Goods Sold. There is no variable manufacturing overhead. The company's balance sheet at the beginning of the year was as follows: The standard cost card for the company's only product is as follows: The standard fixed manufacturing overhead rate was based on budgeted fixed manufacturing overhead of $186,000 and budgeted activity of 12,000 hours.During the year, the company completed the following transactions:Purchased 52,400 gallons of raw material at a price of $8.90 per gallon.Used 46,380 gallons of the raw material to produce 17,800 units of work in process.Assigned direct labor costs to work in process. The direct labor workers (who were paid in cash) worked 11,080 hours at an average cost of $18.90 per hour.Applied fixed overhead to the 17,800 units in work in process inventory using the predetermined overhead rate multiplied by the number of direct labor-hours allowed. Actual fixed overhead costs for the year were $197,100. Of this total, $122,100 related to items such as insurance, utilities, and indirect labor salaries that were all paid in cash and $75,000 related to depreciation of manufacturing equipment.Transferred 17,800 units from work in process to finished goods.Sold for cash 17,700 units to customers at a price of $52.30 per unit.Completed and transferred the standard cost associated with the 17,700 units sold from finished goods to cost of goods sold.Paid $53,000 of selling and administrative expenses.Closed all standard cost variances to cost of goods sold.Required:1. Compute all direct materials, direct labor, and fixed overhead variances for the year.2. Enter the beginning balances and record the above transactions in the worksheet that appears below. Because of the width of the worksheet, it is in two parts. In your text, these two parts would be joined side-by-side to make one very wide worksheet. 3. Determine the ending balance (e.g., 12/31 balance) in each account. 3. Determine the ending balance (e.g., 12/31 balance) in each account.

Budgeted Fixed Manufacturing Overhead

This term refers to the projected fixed costs associated with the production process, including expenses that do not change with the level of production.

Standard Fixed Manufacturing Overhead Rate

A predetermined rate used in costing to allocate the estimated fixed manufacturing overhead costs to individual units of production based on a consistent activity base, such as machine hours or labor hours.

Budgeted Activity

The planned level of output or operation used in the budgeting process, often serving as the basis for allocating fixed costs.

  • Acquire knowledge on accurately documenting transactions within a standard costing framework.
  • Acquire the competency to calculate discrepancies between real expenses and benchmark costs, covering variances in direct materials, direct labor, and fixed overheads.
  • Comprehend the method of transferring standard cost variances into the Cost of Goods Sold.

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