*$210 = $160 Listed in Table + $50 Not Allocated. $1,000 = $900 Listed in Table + $100

10-59)

1. / Standard cost schedule:
DIRECT MATERIAL
Construction Department / Finishing Department
Standard quantity
Direct material and parts in finished product:
Veneered wood / 7 lbs / —
Bridge and strings / — / 1 set
/ Allowance for normal waste / 1 lb / —
Total standard quantity per guitar / 8 lbs / 1 set
Standard price:
Direct material and parts:
Veneered wood / $12 per lb / —
Bridge and strings / — / $15 per set
Standard direct-material cost:
Standard quantity / 8 lbs / 1 set
Standard price / ´ $12 per lb / ´ $15 per set
Standard cost per guitar / $96 per guitar / $15 per guitar
Actual output in July / ´ 500 guitars / ´ 500 guitars
Total standard cost of direct material
in July / $48,000 / $7,500
Direct Labor
Construction Department / Finishing Department
Standard direct-labor cost:
Standard quantity / 6 hrs / 3 hrs
/ Standard rate / ´ $ 20 / ´ $15
Standard cost per guitar / $120 / $45
Actual output in July / ´ 500 guitars / ´ 500 guitars
Total standard cost of direct labor
in July / $60,000 / $22,500
2. / (a) / Construction Department:
Direct-Material Price and Quantity Variances
ACTUAL MATERIAL COST / STANDARD MATERIAL COST
Actual Quantity / ´ / Actual Price / Actual Quantity / ´ / Standard Price / Standard Quantity / ´ / Standard Price
6,000
pounds
purchased / ´ / $12.50
per
pound / 6,000
pounds
purchased / ´ / $12.00
per
pound / 4,000
pounds
allowed / ´ / $12.00
per
pound
$75,000 / $72,000 / $48,000
$3,000 Unfavorable
Direct-material
price variance
4,500
pounds
used / ´ / $12.00
per
pound
$54,000
$6,000
Unfavorable
Direct-material
quantity
variance
Direct-labor rate and efficiency variances
Actual LABOR Cost / Standard lABOR Cost
Actual
Hours / ´ / Actual Rate / Actual Hours / ´ / Standard Rate / Standard Hours / ´ / Standard Rate
2,850 hours
used / ´ / $19
per
hour / 2,850
hours
used / ´ / $20
per
hour / 3,000
hours
allowed / ´ / $20
per
hour
$54,150 / $57,000 / $60,000
/ $2,850 Favorable / $3,000 Favorable
Direct-labor
rate variance / Direct-labor
efficiency variance
/ $5,850 Favorable
Direct-labor variance
b)
Finishing Department:
Direct-LABOR RATE and EFFICIENCY Variances
Actual LABOR Cost / Standard lABOR Cost
Actual
Hours / ´ / Actual Rate / Actual Hours / ´ / Standard Rate / Standard Hours / ´ / Standard Rate
1,570 hours
used / ´ / $16
per
hour / 1,570
hours
used / ´ / $15
per
hour / 1,500
hours
allowed / ´ / $15
per
hour
$25,120 / $23,550 / $22,500
/ $1,570 Unfavorable / $1,050 Unfavorable
Direct-labor
rate variance / Direct-labor
efficiency variance
/ $2,620 Unfavorable
Direct-labor variance
3. / Cost variance report:
Springsteen Company
Cost Variance Report
For the Month of July
Construction Department / Finishing Department
Amount / Percentage of Standard Cost / Amount / Percentage of Standard Cost
Direct material:
Standard cost, given
actual output / $48,000 / — / $ 7,500 / —
Direct-material price
variance / 3,000 U / 6.25% / -0- / -0-
Direct-material quantity
variance / 6,000 U / 12.50% / -0- / -0-
Direct labor:
Standard cost, given
actual output / $60,000 / — / $22,500 / —
Direct-labor rate variance / 2,850 F / 4.75% / 1,570 U / 6.98%
Direct-labor efficiency
variance / 3,000 F / 5.00% / 1,050 U / 4.67%

12-46)

1. Segmented Income Statements: Buckeye Department Stores, Inc. (in thousands)
Segments of Company / Segments of Columbus Division
Buckeye Department Stores, Inc. / Cleveland
Division / Columbus Division / Olentangy Store / Scioto Store / Downtown Store / Not Allocated
Sales revenue / $39,400 / $21,000 / $18,400 / $5,000 / $2,400 / $11,000
Variable operating expenses:
Cost of merchandise sold / $23,000 / $12,000 / $11,000 / $3,000 / $2,000 / $6,000
Sales personnel—salaries / 3,050 / 1,600 / 1,450 / 400 / 300 / 750
Sales commissions / 380 / 200 / 180 / 50 / 40 / 90
Utilities / 590 / 300 / 290 / 80 / 60 / 150
Other / 465 / 250 / 215 / 60 / 35 / 120
Total variable expenses / $27,485 / $14,350 / $13,135 / $3,590 / $2,435 / $7,110
Segment contribution margin / $11,915 / $6,650 / $5,265 / $1,410 / $ (35) / $3,890
Less: Fixed expenses controllable by
segment manager:
Depreciation—furnishings / $ 560 / $ 290 / $ 270 / $ 80 / $ 50 / $ 140
Computing and billing / 405 / 210* / 195 / 40 / 30 / 75 / 50
Warehouse / 780 / 450 / 330 / 70 / 60 / 200
Insurance / 355 / 200 / 155 / 40 / 25 / 90
Security / 350 / 210 / 140 / 30 / 30 / 80 / _____
Total / $2,450 / $1,360 / $1,090 / $ 260 / $195 / $ 585 / $50
Profit margin controllable by
segment manager / $9,465 /
$5,290 /
$4,175 /
$1,150 /
$(230) /
$3,305 /
(50)
Less: Fixed expenses, traceable to
segment, but controllable by others:
Depreciation—buildings / $ 930 / $ 470 / $ 460 / $ 120 / $ 90 / $ 250
Property taxes / 305 / 170 / 135 / 35 / 20 / 80
Supervisory salaries / 1,750 / 1,000† / 750 / 150 / 100 / 400 / $100
Total / $2,985 / $1,640 / $1,345 / $305 / $210 / $ 730 / $100
Profit margin traceable to segment / $6,480 / $3,650 / $2,830 / $845 / $(440) / $2,575 / $(150)
Less: Common fixed expenses / 120
Income before taxes / $6,360
Less: Income tax expense / 1,950
Net income / $4,410

*$210 = $160 listed in table + $50 not allocated. †$1,000 = $900 listed in table + $100 not allocated

2. / The segmented income statement would help the president of Buckeye Department Stores gain insight into which division and which individual stores are performing well or having difficulty. Such information serves to direct management's attention to areas where its expertise is needed.