Accounting Presentation 4/29/2014 Tyler Fisher Accounting Presentation 4/29/2014

Please Note: There are no materials inventories. Problem 16-59 Assume that Timekiller, Inc., manufactures a new electronic game console. The current standard costs sheet for a game console follows. Direct Materials ? Kilograms @ $4/kilogram = ? Per game Direct Labor .25 hours @ ? /hour Overhead .25hours @ ?/hour TOTAL COSTS = $ 13.00/game Assume that the following data appeared in Timekiller’s records at the end of the past month: Please Note: There are no materials inventories. Actual production 24,000 units Actual Sales 15,000 units Materials (37,500 kgs) $157,500 Materials Price Variance 7,500 U Materials Efficiency Variance 6,000 U Direct Labor Price Variance 4,560 U Direct Labor (5,700 hours) 95,760 Underapplied overhead (Total) 3,000 U

Required: A) Prepare a variance analysis for direct materials and direct labor and complete the standard cost sheet. B) Assume that all production overhead is fixed and that the $3,000 underapplied is the only overhead variance that can be computed. What are the actual and applied overhead amounts? (CPA adopted)

Setting up our chart A) Actual inputs Flexible Actual at Standard Price Flexible Production Budget Actual Costs Price Variance Efficiency Variance (Actual Price X Actual Quantity) (= 157,500) (Standard Price X Actual Quantity) ($4 X 37,500 = 150,000) (Standard Price X Standard Quantity) ($4 X )