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Machining Department Monthly Production Budget Wages $771.000 Utilities 72.000 Depreciation 120.000 Total $963.000 The actual amount spent and the actual units produced in the first three months in the Machining Department were as follows: Amount Units Spent Produced January $911.000 101.000 000't16s February 873.000 92.000 March 838.000 83.000 The Machining Department supervisor has been very pleased with this performance because actual expenditures for January-March have been less than the monthly static budget of $963,000. However, the plant manager believes that the budget should not remain fixed for every month but should "flex" or adjust to the volume of vork that is produced in the Machining Department. Additional budget information for the Machining Department is as follows: Wages per hour $14.00 Utility cost per direct labor hour $1.30 Direct labor hours per unit 0.50 Planned monthly unit production 110.000 a. Prepare a flexible budget for the actual units produced for January, February, and March in the Machining Department. Assume that depreciation is a fixed cost. If required, use per unit amounts carried out to two decimal places. Celtic Company-Machining Department Flexible Production Budget For the Three Months Ending March 31 January February March Units of production Wages Utilities Depreciation Total b. Compare the flexible budget vith the actual expenditures for the first three months January February March Actual cost Total flexible budget Excess of actual cost over budget

Machining Department Monthly Production Budget Wages $771.000 Utilities 72.000 Depreciation 120.000 Total $963.000 The actual amount spent and the actual units produced in the first three months in the Machining Department were as follows: Amount Units Spent Produced January $911.000 101.000 000't16s February 873.000 92.000 March 838.000 83.000 The Machining Department supervisor has been very pleased with this performance because actual expenditures for January-March have been less than the monthly static budget of $963,000. However, the plant manager believes that the budget should not remain fixed for every month but should "flex" or adjust to the volume of vork that is produced in the Machining Department. Additional budget information for the Machining Department is as follows: Wages per hour $14.00 Utility cost per direct labor hour $1.30 Direct labor hours per unit 0.50 Planned monthly unit production 110.000 a. Prepare a flexible budget for the actual units produced for January, February, and March in the Machining Department. Assume that depreciation is a fixed cost. If required, use per unit amounts carried out to two decimal places. Celtic Company-Machining Department Flexible Production Budget For the Three Months Ending March 31 January February March Units of production Wages Utilities Depreciation Total b. Compare the flexible budget vith the actual expenditures for the first three months January February March Actual cost Total flexible budget Excess of actual cost over budget

Managerial Accounting: The Cornerstone of Business Decision-Making
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter9: Profit Planning And Flexible Budgets
Section: Chapter Questions
Problem 34BEA: Performance Report Based on Budgeted and Actual Levels of Production Bowling Company budgeted the...
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Celtic Company Machining Department Monthly Production Budget Wages $771,000 Utilities 72,000 Depreciation 120,000 Total $963,000 The actual amount spent and the actual units produced in the first three months in the Machining Department were as follows: Amount Units Spent Produced January $911,000 101,000 February 873,000 92,000 March 838,000 83,000 The Machining Department supervisor has been very pleased with this performance because actual expenditures for January-March have been less than the monthly static budget of $963,000. However, the plant manager believes that the budget should not remain fixed for every month but should "flex" or adjust to the volume of work that is produced in the Machining Department. Additional budget information for the Machining Department is as follows: Wages per hour $14.00 Utility cost per direct labor hour $1.30 Direct labor hours per unit 0.50 Planned monthly unit production 110,000 a. Prepare a flexible budget for the actual units produced for January, February, and March in the Machining Department. Assume that depreciation is a fixed cost. If required, use per unit amounts carried out to two decimal places. Celtic Company-Machining Department Flexible Production Budget For the Three Months Ending March 31 January February March Units of production Wages Utilities Depreciation Total b. Compare the flexible budget with the actual expenditures for the first three months. January February March Actual cost Total flexible budget Excess of actual cost over budget
Transcribed Image Text:Celtic Company Machining Department Monthly Production Budget Wages $771,000 Utilities 72,000 Depreciation 120,000 Total $963,000 The actual amount spent and the actual units produced in the first three months in the Machining Department were as follows: Amount Units Spent Produced January $911,000 101,000 February 873,000 92,000 March 838,000 83,000 The Machining Department supervisor has been very pleased with this performance because actual expenditures for January-March have been less than the monthly static budget of $963,000. However, the plant manager believes that the budget should not remain fixed for every month but should "flex" or adjust to the volume of work that is produced in the Machining Department. Additional budget information for the Machining Department is as follows: Wages per hour $14.00 Utility cost per direct labor hour $1.30 Direct labor hours per unit 0.50 Planned monthly unit production 110,000 a. Prepare a flexible budget for the actual units produced for January, February, and March in the Machining Department. Assume that depreciation is a fixed cost. If required, use per unit amounts carried out to two decimal places. Celtic Company-Machining Department Flexible Production Budget For the Three Months Ending March 31 January February March Units of production Wages Utilities Depreciation Total b. Compare the flexible budget with the actual expenditures for the first three months. January February March Actual cost Total flexible budget Excess of actual cost over budget
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