1-Jim's Landscaping1) Jim's LandscapingJim's Landscapingsolutions: Flexible Performance Reportsupplies = $ 4 x 83 yds = 332For the Month of Junemachine maint. = $2 x 83 = $166chemicals = $6 x 83 = $498BudgetActualVariance83 yards83 yards (F) or (U)Variable overhead costs:Supplies$ 332.00$ 320.00 $ 12 FMachine maintenance166.00180.00 14 UChemicals 498.00500.00 2 UFixed overhead costs:Salaries and wages2,300.002,500.00 200 UDepreciation800.00800.00-Utilities400.00450.00 50 URent1,100.001,100.00-total Overhead Costs$ 5,596.00$ 5,850.00 $ 254 U 2-Banner Inc.2. Banner Inc. (Note: Scroll down to see the computations)Banner Inc.Variable Overhead Performance ReportFor the Year Ended December 31Standard Rate x Actual Hrs.Actual Rate x Standard hrsVariance (F) or (U)Spending Variance:Indirect Labor11,475.0011,600.00 $ 125 USupplies4,050.004,000.00 50 fElectricity2,025.002,050.00 25 U total 17,550.0017,650.00 $ 100 UStandard Hrs. x Std. RateStandard Rate x Actual hrs.Efficiency Variance:Indirect Labor11,050.0011,475.00 425 USupplies3,900.004,050.00 150 UElectricity1,950.002,025.00 75 U total16,900.0017,550.00 650 UGrand Total$ 34,450.00$ 35,200.00 $ 750 Ucomputations: For Spending & Efficiency Variance:Indirect labor = .85 x 13500 = 11,475supplies = .30 x 13500 = 4,050Electricity = .15 x 13500 = 2,025 For Efficiency Variance: (std. hrs. x std. rate)Indirect labor = 13000 x .85 = 11,050Supplies = 13,000 x .30 = 3,900Electricity = 13000 x .15 = 1,950 3-Photos Inc.3. Photos Inc.A)Predetermined Overhead Rate = Budgeted Fixed Overhead / Budgeted Std. Direct Labor hrs.Predetermined Overhead Rate = $ 250,000 / 40,000Predetermined Overhead Rate = $ 6.25 per direct labor hr.B)Fixed Overhead Budget Variance = Budgedted Fixed Overhead - Actual Fixed overheadFixed Overhead Budget Variance = $ 250,000 - $ 265,000Fixed Overhead Budget Variance = $ 15,000 UnfavorableFixed Overhead Volume Variance = (Budgeted std. direct labor hrs. - Standard direct labor hrs. allowed) x Predetermined Overhead RateFixed Overhead Volume Variance = (40,000 - 40,800) x $6.25Fixed Overhead Volume Variance = $ 5,000 Favorable 4-Grater Inc.4) Grater Inc. (Note: Please scroll down to see the computations)Grant Inc.Segment Contribution MarginFor the YearProduct AProduct BAs a WholeSales480,000.00975,000.001,455,000.00Variable Expenses245,000.00438,000.00683,000.00Contribution Margin235,000.00537,000.00772,000.00Traceable Fixed expenses144,000.00101,500.00245,500.00Net Operating Income Per Product Line91,000.00435,500.00526,500.00Common fixed Expenses390,000.00Net Operating Income As a Whole136,500.00computations: FOR PRODUCT A: sales = 48 X 10000 = 480,000variable expenses = 24.50 x 10,000 = 245,000contribution margin = 480000 - 245000 = 235000net operating income = 235000 - 144000 = 91,000 FOR PRODUCT B: sales = 65 x 15,000 = 975,0 ...

1. 1-Jim's Landscaping1) Jim's LandscapingJim's
Landscapingsolutions: Flexible Performance Reportsupplies = $
4 x 83 yds = 332For the Month of Junemachine maint. = $2 x
83 = $166chemicals = $6 x 83 = $498BudgetActualVariance83
yards83 yards (F) or (U)Variable overhead costs:Supplies$
332.00$ 320.00 $ 12 FMachine maintenance166.00180.00
14 UChemicals 498.00500.00 2 UFixed overhead
costs:Salaries and wages2,300.002,500.00 200
UDepreciation800.00800.00-Utilities400.00450.00 50
URent1,100.001,100.00-total Overhead Costs$ 5,596.00$
5,850.00 $ 254 U
2-Banner Inc.2. Banner Inc. (Note: Scroll down to see the
computations)Banner Inc.Variable Overhead Performance
ReportFor the Year Ended December 31Standard Rate x Actual
Hrs.Actual Rate x Standard hrsVariance (F) or (U)Spending
Variance:Indirect Labor11,475.0011,600.00 $ 125
USupplies4,050.004,000.00 50
fElectricity2,025.002,050.00 25 U total
17,550.0017,650.00 $ 100 UStandard Hrs. x Std.
RateStandard Rate x Actual hrs.Efficiency Variance:Indirect
Labor11,050.0011,475.00 425 USupplies3,900.004,050.00
150 UElectricity1,950.002,025.00 75 U
total16,900.0017,550.00 650 UGrand Total$ 34,450.00$
35,200.00 $ 750 Ucomputations: For Spending & Efficiency
Variance:Indirect labor = .85 x 13500 = 11,475supplies = .30 x
13500 = 4,050Electricity = .15 x 13500 = 2,025 For Efficiency
Variance: (std. hrs. x std. rate)Indirect labor = 13000 x .85 =
11,050Supplies = 13,000 x .30 = 3,900Electricity = 13000 x
.15 = 1,950
3-Photos Inc.3. Photos Inc.A)Predetermined Overhead Rate =
Budgeted Fixed Overhead / Budgeted Std. Direct Labor
hrs.Predetermined Overhead Rate = $ 250,000 /
40,000Predetermined Overhead Rate = $ 6.25 per direct labor
hr.B)Fixed Overhead Budget Variance = Budgedted Fixed

2. Overhead - Actual Fixed overheadFixed Overhead Budget
Variance = $ 250,000 - $ 265,000Fixed Overhead Budget
Variance = $ 15,000 UnfavorableFixed Overhead Volume
Variance = (Budgeted std. direct labor hrs. - Standard direct
labor hrs. allowed) x Predetermined Overhead RateFixed
Overhead Volume Variance = (40,000 - 40,800) x $6.25Fixed
Overhead Volume Variance = $ 5,000 Favorable
4-Grater Inc.4) Grater Inc. (Note: Please scroll down to see the
computations)Grant Inc.Segment Contribution MarginFor the
YearProduct AProduct BAs a
WholeSales480,000.00975,000.001,455,000.00Variable
Expenses245,000.00438,000.00683,000.00Contribution
Margin235,000.00537,000.00772,000.00Traceable Fixed
expenses144,000.00101,500.00245,500.00Net Operating Income
Per Product Line91,000.00435,500.00526,500.00Common fixed
Expenses390,000.00Net Operating Income As a
Whole136,500.00computations: FOR PRODUCT A: sales = 48
X 10000 = 480,000variable expenses = 24.50 x 10,000 =
245,000contribution margin = 480000 - 245000 = 235000net
operating income = 235000 - 144000 = 91,000 FOR PRODUCT
B: sales = 65 x 15,000 = 975,000variable exp = 29.20 x 15,000
= 438,000contribution margin = 975000 - 438000 = 537,000Net
operating income = 537000 - 101500 = 435,500
5-XYZ5) X Y Z (Note: Scroll down to seel all the
answers)ROI = (Operating Income/Sales) x (Sales/Operating
Assets)A)ROI for Division X = (54000/900000) x
(900000/600000)ROI for Division X = .06 x 1.50ROI for
Division X = 9% or .09ROI for Division Y = (30000/750000) x
(750000/150000)ROI for Division Y = .04 x 5.0ROI for
Division Y = 20% or .20ROI for Division Z = (10000/600000) x
(600000/200000)ROI for Division Z = .0167 x 3.0ROI for
Division Z = 5% or .05** rounded offResidual Income = Net
Operating Income - (Min. Required Rate of Return x Ave.
Operating Assets)B)Residual Income for Division X = 54,000 -
(.10 x 600,000) Residual Income for Division X = 54,000 -
60,000Residual Income (Loss) for Division X = ($

3. 6,000)Residual Income for Division Y = 30,000 - (.16 x
150,000) Residual Income for Division Y = 30,000 -
24,000Residual Income for Division Y = $ 6,000Residual
Income for Division Z = 10,000 - (.08 x 200,000) Residual
Income for Division Z = 10,000 - 16,000Residual Income (Loss)
for Division Y = ($ 6,000)C)XYZReturn on Investment
(Method --letter A above)9%20%5%Compare it with 15%
opportunity yield15%15%15%Accept if ROI is less than 15%
yield, otherwise RejectAcceptRejectAcceptResidual Income
Method (letter B Above)Net Operating
Income54,00030,00010,000Minimum required
return60,00024,00016,000Residual Income
(Loss)(6,000)6,000(6,000)Accept if RI is positive or Operating
Income exceeds the min. requirementRejectAcceptReject