Solution-Calculate the volume and unused capacity variances

Calculate the volume and unused capacity variances

Assignment Help Managerial Accounting

Reference no: EM132833226

Question - Calculation of Value-Added and Non-Value-Added Costs, Activity Volume and Unused Capacity Variances

Maquina Company produces custom-made machine parts. Maquina recently has implemented an activity-based management (ABM) system with the objective of reducing costs. Maquina has begun analyzing each activity to determine ways to increase its efficiency. Setting up equipment was among the first group of activities to be carefully studied. The study revealed that setup hours was a good driver for the activity. During the last year, the company incurred fixed setup costs of $504,000 (salaries of 14 employees). The fixed costs provide a capacity of 28,000 hours (2,000 per employee at practical capacity). The setup activity was viewed as necessary, and the value-added standard was set at 2,000 hours. Actual setup hours used in the most recent period were 26,200.

Required -

1. Calculate the volume and unused capacity variances for the setup activity. Enter all amounts as positive values.

2. Prepare the report that presents value-added, non-value-added, and actual costs for setup.

Reference no: EM132833226

Questions Cloud

Compute the capital balances of the remaining partners : Compute the Capital balances of the remaining partners after the retirement of Bong with the following cash payment to Bong for his equity

Make a purchase before leaving : A clothing store owner finds that 35% of the customers entering the store ask an assistant for help and that 20% of the customers make a purchase before leaving

Evaluate and recommend improvements for wireless environment : Assume you are part of a corporate level security team and your organization has just acquired a new company. The new company will have its own information.

Make a generalization about the population of all students : Descriptive? statistics; the results of the class sample are extended to make a generalization about the population of all students at the school.

Calculate the volume and unused capacity variances : The fixed costs provide a capacity of 28,000 hours (2,000 per employee at practical capacity). Calculate the volume and unused capacity variances

What a feasibility analysis of sporting goods might entail : A feasibility analysis, also called a feasibility study, is performed to estimate the chances of a project's success before a commitment of money and time.

John rawls thought experiment : John Rawls's original position represents a community in which you have no idea what kind of person you will end up being. In this sense, it is like life itself

What would gross profit be : Assuming that Convex sold 23,500 units during the last six months of the year at $18 each, what would gross profit be

Does the stock price determine the direction of netflix : In this report, review and analyze Netflix key strategies. Describe what type of competitive advantage Netflix is currently pursuing? Is the strategy short.

User Account

All Pages

Calculate the volume and unused capacity variances

Reference no: EM132833226

Reference no: EM132833226

Questions Cloud

Reviews

Write a Review

Managerial Accounting Questions & Answers

Manage budgets and financial plans

Prepare a retained earnings statement

Prepare a master budget for the three-month period

Construct the companys direct labor budget

Evaluate the predetermined overhead rate

Determine the company''s bid

Compute the pool rates for the different activities

Prepare Company financial statements

Prepare an analysis of terracycles

Discuss the ethical issues

Political resources in emerging markets

Management accounting - ehsan electronics company

Assured A++ Grade

Academics

Major Subjects

Majors

Get In Touch

TERMS & POLICIES

HELP & SUPPORT