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3 days ago

Thomas Textiles Corporation began November with a budget for 60,000 hours of production in the Weaving Department. The departmen

t has a full capacity of 75,000 hours under normal business conditions. The budgeted overhead at the planned volumes at the beginning of November was as follows:
Variable overhead $450,000
Fixed overhead 262,500
Total $712,500
The actual factory overhead was $725,000 for November. The actual fixed factory overhead was as budgeted. During November, the Weaving Department had standard hours at actual production volume of 64,500 hours.
Determine the variable factory overhead controllable variance and the fixed factory overhead volume variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Round your interim computations to the nearest cent, if required.
a. Variable factory overhead controllable variance: $
b. Fixed factory overhead volume variance: $

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a. The remaining store supplies at the end of the fiscal year total $2,550.

Debit Supplies expense 2,550

Credit Supplies 2,550

b. For the fiscal year, the amount for expired insurance, categorized as an administrative expense, is $1,720.

Debit Insurance expense 1,720

Credit Prepaid insurance 1,720

c. The depreciation expense associated with store equipment, classified as a selling expense, totals $6,500 for the fiscal year.

Debit Depreciation expense 6,500

Credit Accumulated depreciation, equipment 6,500

d. To gauge shrinkage, a physical inventory count taken at fiscal year-end indicates $10,720 of merchandise is still on hand.

Debit Cost of goods sold 2,280

Credit Merchandise inventory 2,280

Cash $22,150

Merchandise inventory 10,720

Store supplies 2,550

Prepaid insurance 1,080

Store equipment 42,800

Accumulated depreciation—Store equipment $25,750

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Common stock 4,000

Retained earnings 25,000

Dividends 2,100

Sales 115,900

Sales discounts 2,100

Sales returns and allowances 2,000

Cost of goods sold 40,280

Depreciation expense—Store equipment 6,500

Sales salaries expense 12,900

Office salaries expense 12,900

Insurance expense 1,720

Rent expense—Selling space 8,000

Rent expense—Office space 8,000

Store supplies expense 2,550

Advertising expense 9,300

Totals $187,425 $187,425

a) The current ratio is calculated as current assets divided by current liabilities, resulting in $36,050 / $17,000 = 2.12

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Income Statement

For the month ending January 31, 202x

Revenues:

Total net sales $111,800

Expenses:

Cost of goods sold $40,280
Depreciation expense - equipment $6,500
Sales salaries expense $12,900
Office salaries expense $12,900
Insurance expense $1,720
Rent expense - Selling space $8,000
Rent expense - Office space $8,000
Store supplies expense $2,550
Advertising expense $9,300 ($102,150)

Operating income $9,650

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Income Statement

For the month ending January 31, 202x

Sales:

Total sales $115,900
Sales discounts ($2,100 )
Sales returns and allowances ($2,000 ) $111,800

Cost of goods sold ($40,280)

Gross profit $71,520

Selling expenses:

Depreciation expense - equipment $6,500
Sales salaries expense $12,900
Rent expense - Selling space $8,000
Store supplies expense $2,550
Advertising expense $9,300 ($39,250)

S&A expenses:

Office salaries expense $12,900
Insurance expense $1,720 Rent expense - Office space $8,000

($22,620)</ul>

Operating income $9,650

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