MAKING THE CONNECTION INTEGRATIVE EXERCISES Part 2 Chapters 5-10 Beawvile Fumitum Corporation soclinors, and lounge chairs Beauvill is locatsd in a medium-sized community in the eouthosetern part of tho United States. Iris a 7 ipley'es the community. In fact, the economic wall being af the cernmunity is tied vary stiongly te Beauulle, operetes sanmil 2 fare plant, end 0 fuenture plantin the same community The sawmill buys logs from ‘Tha sawmill then processes the lose grades of lumber fists and secancs, No. { common, No. 2 commen, ard incured in the mil are common to the four grades of umber. Al four graces of tural Linitate clant, Tne mil vanstes everything | produces 10 the furniture plant, arr! the guades are bas 2 je completion ining inventory 20% 40% Ending nventory 40% 50% sed stanclard cost shaet for Eabie FB70 (for the Coloring and Boling Department only) Translerrec.in mater (28 yarcs @ S10) $3250.00 Other marerials [100 ounces @ $0.20} 20.00 Labor (3 1 hours @ $8) 24.80 Fised overhead (3.1 hours @ $5 4550 Venable overhead (3.1 hours @ 65) 50 Standard cost per uni $325.80 Furniture Plan Departmental data tbudgeted Service Departments Producing Departments General Receiving Power Maintenence Factory Cutting Assembly Overhead 450000 $600,000 $300,000 $525,000 $750,902 $375,000 chine hours — = = 80002 15,000 wving orders 3500 9,000 an 1,000 4,000 5,000 10,000 Direct labor hours S = = 39.009 200,000 After some iscussion with the furnkure plant contoller, Gisela decided to use machine hours 19 caloulate the overhead rare for the Cutting Deparment and direct labor hours for the Asserrbhy Daparimant rate (the Cutting Deparment sas more automated then the Assembly Departmen). AS part ofher razon, she wanted lompare the oHocts of plantwide rates and cieparimanta rates on De st of jobs. She wantad te know i overheas costing could be tho source of the arising problems he nt overbead at Iz decided to examine produce 500 sofos, asing'o frequently requested styla titgrs. The second he effect of the if jament procedures, Gis two prospective jabs, One job, Job ASOD, coul and Fabre #B70. Bids an this type af job were being lost more frequently te con (9b, Job 875, would produce 75 spedally designed tecliners. This job involved a new design one ‘ave dificult for the workers to bulls, It imovved some special cutting requrements and an unfarnilarassembly. ft the costs of cently, the company st Job A500: Direct materials: Faerie FB70 Lumber No, 1 common} Other components Direct Inbor Cui partment mbiy Depart Machine time: Cutting Department fs fssomaly Depanmen' Job 075: Direct mated Feoric FE/O u sand seconds Othe: components bor Cutting Department Assembly Depertment ie Cutting Departme Assembly Deparment Dire Required 1. Allocate the jeint mani each grade. (using the physical unite metho of allaeation, ace t ‘ould the mill use’ Expl has te tho «alee value 3° aplit off methox splits each proposed job f tha mill culated ti Caleulate the amount of unde or 19 the waighracl average mate 5. Assume that th eaving id paras ‘emed :0 be wiring mi Je 0 |0bs, Gisela assembled the following information on the twa jobs werapplied avarh loulsts the cost par bo 059 is Nat 3 separste process 1¢ bids on jods of this type. To compu Oheurs @ $10 7,600 hours @ $8.75 350 machine hours 50 machine hours 26 yards @ $350 2,200 board feet @ $0.12 53.236 70hevre @S10 240 hours @ $8.75 0 mackine hours 15 machin facturing costs to each grade, enc! eslaulate the enst por board ‘sot for sing the esleevalus: What ie tho effect an the coat af werhoad rate for the Fabric plant, for the fabne pant, I: for False FPO. each fabric. Also, assume that the yam used for each fabric differs significantly in cost. In this case, would process \9 be apprepriat & In the Coloring and Botting Depaamenr, 400,00 duce the output of the period, Using the proposed standare cost sheet, calevate t 1g Department variance (for other materials ony variances for the Calonng and Bol a. Materials pri bb Materials. & Laber oF efficiency variance period-—FIFO or weigh: isting the variances, which meshes cd average? Explain, for the weaving and patter process? Whal costing approach would you meng? Deserbe your approach i celal ounces of other materials 2 the following ssage variance lfor olher materials only id yOu Use to camoute the actual autour of the