accounting problems with all solutions – 3 problems



Ironwood Company manufactures cast-iron
barbeque cookware. During a recent windstorm, it lost some of its accounting
records. Ironwood has managed to reconstruct portions of its standard cost
system database but is still missing a few pieces of information.


Use the information in the table to
determine the unknown amounts. You may assume that Ironwood does not keep any
raw material on hand.


2. Lamp Light Limited (LLL) manufactures
lampshades. It applies variable overhead on the basis of directlabor hours.
Information from LLL’s standard cost card follows:


During August, LLL had the following actual

Units produced and sold 24,800

Actual variable overhead $9,470

Actual direct labor hours 15,800


Compute LLL’s variable overhead rate
variance, variable overhead efficiency variance, and over or under applied
variable overhead.

Overhead Rate Variance

Variable Overhead
Efficiency Variance

Overhead Spending Variance

3. Olive Company makes silver belt buckles.
The company’s master budget appears in the first column of the table.


Complete the table by preparing Olive’s
flexible budget for Rs.5,700, 7,700 and 8,700 units.



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