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    Jey J
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    This document contains calculations related to a company's shoe shipping budget and actual results for 2020. It shows that the company budgeted to ship 300,000 pairs of shoes in 20,000 crates based on an average of 15 pairs per crate, but actually shipped 270,000 pairs requiring 27,000 crates based on the actual average of 10 pairs per crate. It then calculates variances between the static budget, flexible budget, and actual results for number of crates, overhead costs, and hours.

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    Related to Accounting

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    C8-2

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    This document contains calculations related to a company's shoe shipping budget and actual results for 2020. It shows that the company budgeted to ship 300,000 pairs of shoes in 20,000 crates based on an average of 15 pairs per crate, but actually shipped 270,000 pairs requiring 27,000 crates based on the actual average of 10 pairs per crate. It then calculates variances between the static budget, flexible budget, and actual results for number of crates, overhead costs, and hours.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pdf or txt
    3 views2 pages

    C8 2

    Uploaded by

    Jey J
    This document contains calculations related to a company's shoe shipping budget and actual results for 2020. It shows that the company budgeted to ship 300,000 pairs of shoes in 20,000 crates based on an average of 15 pairs per crate, but actually shipped 270,000 pairs requiring 27,000 crates based on the actual average of 10 pairs per crate. It then calculates variances between the static budget, flexible budget, and actual results for number of crates, overhead costs, and hours.

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    of 2

    PROBLEM 8-40

    1 Pairs of shoes shipped - Static-Budget 300,000


    Divide by Static-Budget Average number of pairs of shoes per crate 15
    Static budget number of crates for 2020 20,000

    2 Pairs of shoes shipped - Actual results 270,000


    Divide by Static-Budget Average number of pairs of shoes per crate 15
    Flexible budget number of crates for 2020 18,000

    3 Pairs of shoes shipped - Actual results 270,000


    Divide by Actual result of average number of pairs of shoes per crate 10
    Actual number of crates shipped in 2020 27,000

    4 Satatic Budget Fixed overhead cost 60,000


    Divide by Static budget number of crates for 2020 20,000
    Multiply by Packing hours per crate 1
    Static number of hours 20,000 20,000
    Predetermined fixed overhead allocation rate per hour 3

    5 Actual number of crates shipped $ 27,000


    Multiply by Actual result (18*1.2) 21.60
    Total $ 583,200
    Actual number of crates shipped $ 27,000
    Multiply by Actual result (20*1.2) 24 $ 648,000
    Price Variance $ (64,800)

    Actual number of crates shipped $ 27,000


    Multiply by Actual result (20*1.2) 24
    Total $ 648,000
    Flexible budget number of crates 18,000
    Multiply by Actual result (20*1.0) 20 360,000
    Efficiency Variance $ 288,000

    6 Actual Results Fixed overhead cost $ 62,000


    Static-Budget Fixed overhead cost $ 60,000
    Spending Variace $ 2,000

    Static-Budget Fixed overhead cost $ 60,000


    Flexible budget number of crates $ 18,000
    Multiply by (3*1.0) 3 54,000
    Production volume variance $ 6,000
    F

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