Preparing a flexible budget and performance reportThis continues the Piedmont Computer Company situation from Chapter 22. Assume Piedmont Computer Company has created a standard cost card for the PCC model tablet computer, with overhead allocated based on direct labor hours:During the month of September, Piedmont Computer Company incurred the following costs while manufacturing 1,100 PCC model tablets;RequirementsPrepare a flexible budget for September for 900, 1,000, and 1,100 PCC model tablets. The tablet has a standard sales price of $675. List variable costs separately.Using 1,000 PCC model tablets for the static budget, prepare a flexible budget performance report for September. Total sales revenue for the month was $767,800. The company sold 1,100 tablets.What insights can the management of Piedmont Computer Company draw from the performance report? Direct materialsDirect laborVariable overheadFixed overhead$ 300 per tablet3 hours per tablet at $26 per hour3 hours per tablet at $5 per hour$54,000 per month Direct materialsDirect laborVariable overheadFixed overhead$ 341,00088,00017,60056,320

Flexible Budget: A flexible budget is a budget that is prepared for different levels of the output.…

Answered: Direct materials Direct labor Variable…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter6: Activity-based, Variable, And Absorption Costing

Section: Chapter Questions

Problem 3EA: A company estimated 100,000 direct labor hours and $800,000 in overhead. The actual overhead was...

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Preparing a flexible budget and performance report

This continues the Piedmont Computer Company situation from Chapter 22. Assume Piedmont Computer Company has created a standard cost card for the PCC model tablet computer, with overhead allocated based on direct labor hours:

During the month of September, Piedmont Computer Company incurred the following costs while manufacturing 1,100 PCC model tablets;

Requirements

Prepare a flexible budget for September for 900, 1,000, and 1,100 PCC model tablets. The tablet has a standard sales price of $675. List variable costs separately.
Using 1,000 PCC model tablets for the static budget, prepare a flexible budget performance report for September. Total sales revenue for the month was $767,800. The company sold 1,100 tablets.
What insights can the management of Piedmont Computer Company draw from the performance report?

Direct materials
Direct labor
Variable overhead
Fixed overhead
$ 300 per tablet
3 hours per tablet at $26 per hour
3 hours per tablet at $5 per hour
$54,000 per month

Direct materials
Direct labor
Variable overhead
Fixed overhead
$ 341,000
88,000
17,600
56,320

Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

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