6. Ofarrell Corporation, a company that produces and sells a single product, has

ID: 2529736 • Letter: 6

Question

Ofarrell Corporation, a company that produces and sells a single product, has provided its contribution format income statement for March.

Sales (7,700 units)

$400,400

Variable expenses

246,400

Contribution margin

154,000

Fixed expenses

103,500

Net operating income

$50,500

If the company sells 7,600 units, its net operating income should be closest to:

$46,000

$48,500

$50,500

$49,979

Data concerning Wang Corporation's single product appear below: (Do not round your intermediate calculations.)

Selling price per unit

180.00

Variable expense per unit

68.40

Fixed expense per month

130,200

The break-even in monthly dollar sales is closest to:

$210,000

$289,800

$130,200

$420,000

16.

Rehmer Corporation is working on its direct labor budget for the next two months. Each unit of output requires 0.05 direct labor-hours. The direct labor rate is $9.20 per direct labor-hour. The production budget calls for producing 4,400 units in June and 4,900 units in July.

Required:

Construct the direct labor budget for the next two months, assuming that the direct labor work force is fully adjusted to the total direct labor-hours needed each month. (Round your answers to 2 decimal places.)

JUNE JULY

Required production in units ___________________ ____________________

Direct labor hours per unit ___________________ ____________________

Total direct labor hours needed ___________________ ____________________

Direct labor hours cost per hour ___________________ ____________________

Total direct labor cost ___________________ ____________________

17.

A manufacturing company that has only one product has established the following standards for its variable manufacturing overhead. Variable manufacturing overhead standards are based on machine-hours.

Standard hours per unit of output

4.40

machine-hours

Standard variable overhead rate

$11.55

per machine-hour

The following data pertain to operations for the last month:

Actual hours

8,800

machine-hours

Actual total variable manufacturing overhead cost

$95,910

Actual output

1,900

units

What is the variable overhead efficiency variance for the month?

$2,832 U

$7,293 F

$5,082 U

$7,293 U

Ofarrell Corporation, a company that produces and sells a single product, has provided its contribution format income statement for March.

Explanation / Answer

6) O’Farrell Corporation, a company that produces and sells a single product, has provided its contribution format income statement for March.

Answer: $ 48,500

Selling Price per unit ( 400400/7700)

$ 52 Per unit

Variable expenses per unit ( (246400/7700)

$ 32 Per unit

Sales ( 7600*52) = $395200

Less: variable(7600*32) = $( 243200)

Contribution = $ 152000

Less: fixed expenses = $ 103500

Net operating Income

$ 48500

8) Data concerning Wang Corporation's single product appear below: (Do not round your intermediate calculations.)

Answer: $ 210,000

Contribution Margin ( sales – variable expenses)

( 180 – 68.40)

$ 111.6

Contribution margin Ratio = Unit contribution margin / unit selling prise

= ( 111.6 / 180 )

$ 0.62

Dollar sales to break even = fixed expenses / contribution margin ratio

= ( 130200 / 0.62 )

$ 210,000

16) Rehmer Corporation is working on its direct labor budget for the next two months. Each unit of output requires 0.05 direct labor-hours. The direct labor rate is $9.20 per direct labor-hour. The production budget calls for producing 4,400 units in June and 4,900 units in July.

Answer:

July

June

Required production in units

4900

4400

Direct labor hours per unit

0.05

Total direct labor hours needed

245

220

Direct labor hours cost per hour

9.20

Total direct labor cost

2245

2024

Note: - Total direct labor cost = Total direct labor hours needed x Direct labor hours cost per hour

17) A manufacturing company that has only one product has established the following standards for its variable manufacturing overhead. Variable manufacturing overhead standards are based on machine-hours.

What is the variable overhead efficiency variance for the month?

Answer: $ 5082 U

variable overhead efficiency = Standard overhead rate ( Actual hours - Standard hours )

= 11.55 ( 8800 – 8360 )

$ 5082 U

Standard hours = 1900*4.40

$8360