Your Perfect Assignment is Just a Click Away

We Write Custom Academic Papers

100% Original, Plagiarism Free, Customized to your instructions!


University of Missouri St Louis Cost Accounting Variances Questions

University of Missouri St Louis Cost Accounting Variances Questions

Green Bay produces two types of paperboard: plain paperboard and glossy paperboard, which is plain paperboard with some additional processing to add the plastic gloss.

Green Bay uses standard costing with absorption costing and writes all variances off directly to Cost of Goods Sold at the end of each year.

There is no inventory at either the start or the end of the year.

The budget calls for producing 100 million square meters of plain paperboard and 20 million square meters of glossy paperboard with the following costs:

Wood pulp $9,600,000 (1)

Plastic 3,600,000 (2)

Variable overhead60,000,000 (3)

Fixed overhead 54,000,000 (4)

Total Costs$127,200,000

(1) Green Bay’s standard is to use 0.2 gallons of wood pulp per square meter of paperboard (regardless of whether it is plain or glossy).

(2) Green Bay’s standard is to use 1 pound of plastic for every 20 square meters of glossy paperboard.No plastic is used in the production of plain paperboard.

(3) Variable overhead (mostly composed of the cost of electricity, used to operate machinery, but also including labor costs) is allocated based on machine hours.Green Bay’s standard is for each machine hour to produce either 5,000 square meters of plain paperboard OR 4,000 square meters of glossy paperboard.

(4) Fixed overhead (mostly representing facilities costs) is allocated based on square meters of paperboard.For this purpose, no distinction is made between plain and glossy paperboard.

During the year, Green Bay actually produced 112 million square meters of plain paperboard and 16 million square meters of glossy paperboard.The actual costs were:

Wood pulp $16,128,000 (26,880,000 gallons purchased and used)

Plastic 3,024,000 (960,000 pounds purchased and used)

Variable overhead56,160,000 (21,600 machine hours (5))

Fixed overhead 60,160,000

Total Costs$135,472,000

(5) Of this, 4,800 hours were used to produce the 16 million square meters of glossy paperboard, and the rest were used to produce the 112 million square meters of plain paperboard.

1. Compute the direct materials efficiency variance for plastic

2. Compute the direct materials price variance for wood pulp (the effect on direct materials cost of the change in the price of a gallon of wood pulp)

3. Compute the variable overhead effiency variance (captures the effect on variable overhead of the change in the number of machine hours required to produce each square meter of paperboard)

4. Compute the fixed overhead volume variance (captures the effect on fixed overhead cost applied of the change in output produced)

5.What will be Green Bay’s total cost of goods sold for the year before allocation of over/under applied costs?

Order Solution Now

Our Service Charter

1. Professional & Expert Writers: School Assignment only hires the best. Our writers are specially selected and recruited, after which they undergo further training to perfect their skills for specialization purposes. Moreover, our writers are holders of masters and Ph.D. degrees. They have impressive academic records, besides being native English speakers.

2. Top Quality Papers: Our customers are always guaranteed papers that exceed their expectations. All our writers have +5 years of experience. This implies that all papers are written by individuals who are experts in their fields. In addition, the quality team reviews all the papers before sending them to the customers.

3. Plagiarism-Free Papers: All papers provided by School Assignment are written from scratch. Appropriate referencing and citation of key information are followed. Plagiarism checkers are used by the Quality assurance team and our editors just to double-check that there are no instances of plagiarism.

4. Timely Delivery: Time wasted is equivalent to a failed dedication and commitment. School Assignment is known for timely delivery of any pending customer orders. Customers are well informed of the progress of their papers to ensure they keep track of what the writer is providing before the final draft is sent for grading.

5. Affordable Prices: Our prices are fairly structured to fit all groups. Any customer willing to place their assignments with us can do so at very affordable prices. In addition, our customers enjoy regular discounts and bonuses.

6. 24/7 Customer Support: At School Assignment, we have put in place a team of experts who answer all customer inquiries promptly. The best part is the ever-availability of the team. Customers can make inquiries anytime.