Practice 1: a) What is meant by the term flexible budget? What role do flexible budgets play in evaluating performance? 1. The cost accountant for Bradley, Inc., prepared the following monthly performance report relating to the Finishing Department: Budgeted Production Actual Production (6,000 Units) (6,500 Units) $99,600 55,200 9,000 64,200 Direct materials used. Direct labor Varable manufacturing overhead Fixed manufacturing overhead $90,000 48,000 6,000 66,000 b) What would the flexible budget amounts be for each of the following: a. Direct materials b. Direct labor Variable manufacturing overhead c. c) Compute the variances to the flexible budget amounts at the 6,500 unit level for the following (and indicate whether the variances are favorable (F) or unfavorable (U) a. Direct materials b. Direct labor Variable manufacturing overhead c. d) Suppose you are a manager reviewing these variances and you learn that your labor variance consists of a rate variance in one direction, greatly offset by an efficiency variance in the opposite direction resulting in the variance you calculated in e)b. above. What would you be looking at to try to explain these variances? Please mention at least one potential, if not probable, explanation for the variances you've observed for labor

Question

 

Practice : (see attachemnt)

please address parts B, C, D 

 please show any calculations for reference

a) What is meant by the term flexible budget? What role do flexible budgets play in evaluating performance?

The cost accountant for Bradley, Inc., prepared the following monthly performance report relating to the Finishing Department:

                                                     Budgeted Production     Actual Production

number units:                                   6000 units                    6500 units

Direct materials:                               $90,000                        $99,600

Direct labor:                                     $48,000                         $55,200

Variable Manufacturing Overhead:  $6,000                          $9,000

Fixed Manufacturing Overhead:      $66,000                        $64,200

 

 

  1. What would the flexible budget amounts be for each of the following:
    1. Direct materials
    2. Direct labor
    3. Variable manufacturing overhead

 

  1. Compute the variances to the flexible budget amounts at the 6,500 unit level for the following (and indicate whether the variances are favorable (F) or unfavorable (U):
    1. Direct materials
    2. Direct labor
    3. Variable manufacturing overhead

 

  1. Suppose you are a manager reviewing these variances and you learn that your labor variance consists of a rate variance in one direction, greatly offset by an efficiency variance in the opposite direction resulting in the variance you calculated in c)b. above. What would you be looking at to try to explain these variances?  Please mention at least one potential, if not probable, explanation for the variances you’ve observed for labor.
Practice 1:
a) What is meant by the term flexible budget? What role do flexible budgets play in
evaluating performance?
1.
The cost accountant for Bradley, Inc., prepared the following monthly performance report
relating to the Finishing Department:
Budgeted
Production
Actual
Production
(6,000 Units) (6,500 Units)
$99,600
55,200
9,000
64,200
Direct materials used.
Direct labor
Varable manufacturing overhead
Fixed manufacturing overhead
$90,000
48,000
6,000
66,000
b) What would the flexible budget amounts be for each of the following:
a. Direct materials
b. Direct labor
Variable manufacturing overhead
c.
c) Compute the variances to the flexible budget amounts at the 6,500 unit level for
the following (and indicate whether the variances are favorable (F) or unfavorable
(U)
a. Direct materials
b. Direct labor
Variable manufacturing overhead
c.
d) Suppose you are a manager reviewing these variances and you learn that your
labor variance consists of a rate variance in one direction, greatly offset by an
efficiency variance in the opposite direction resulting in the variance you
calculated in e)b. above. What would you be looking at to try to explain these
variances? Please mention at least one potential, if not probable, explanation for
the variances you've observed for labor
Expand
Transcribed Image Text

Practice 1: a) What is meant by the term flexible budget? What role do flexible budgets play in evaluating performance? 1. The cost accountant for Bradley, Inc., prepared the following monthly performance report relating to the Finishing Department: Budgeted Production Actual Production (6,000 Units) (6,500 Units) $99,600 55,200 9,000 64,200 Direct materials used. Direct labor Varable manufacturing overhead Fixed manufacturing overhead $90,000 48,000 6,000 66,000 b) What would the flexible budget amounts be for each of the following: a. Direct materials b. Direct labor Variable manufacturing overhead c. c) Compute the variances to the flexible budget amounts at the 6,500 unit level for the following (and indicate whether the variances are favorable (F) or unfavorable (U) a. Direct materials b. Direct labor Variable manufacturing overhead c. d) Suppose you are a manager reviewing these variances and you learn that your labor variance consists of a rate variance in one direction, greatly offset by an efficiency variance in the opposite direction resulting in the variance you calculated in e)b. above. What would you be looking at to try to explain these variances? Please mention at least one potential, if not probable, explanation for the variances you've observed for labor

Expert Answer

Want to see the step-by-step answer?

Check out a sample Q&A here.

Want to see this answer and more?

Experts are waiting 24/7 to provide step-by-step solutions in as fast as 30 minutes!*

*Response times may vary by subject and question complexity. Median response time is 34 minutes for paid subscribers and may be longer for promotional offers.
Tagged in
Business
Accounting

Variance Analysis

Related Accounting Q&A

Find answers to questions asked by students like you.

Q: Assignment Gradebook Downloadable eTextbook ORION t Brief Exercise 19-12 Your answer is partially co...

A: Income Tax Refund:A tax refund is the difference between taxes paid and taxes owed. Each year a taxp...

Q: If a taxpayer does not have enough tax liability to use all the available adoption credit, the unuse...

A: Adoption Credit: Adoption of a child needs certain basic expenses like court and attorney fees and s...

Q: A consulting firm enters into a contract to help a small family owned business design a marketing st...

A: Click to see the answer

Q: Lake Community College gives its faculty the option of receiving the balance of their contract at th...

A: Compute the employer's FICA taxes for the pay period ending May 17 by using payroll register.

Q: Equivalent Units of Conversion Costs The Filling Department of Eve Cosmetics Company had 3,800 ounce...

A: Calculate total equivalent units for conversion costs under FIFO method:

Q: At the end of the current year. Accounts Receivable has a balance of $4,375,000; Allowance for Doubt...

A: Accounts receivable is the sum owed to an organization in lieu of the products or services provided ...

Q: Bramble Corp. has two divisions; Sporting Goods and Sports Gear. The sales mix is 70 % for Sporting ...

A: The contribution of the average amount which is made by the group of product and services for paying...

Q: 1-9 (3)  Calculate the missing information Revenues for 2028 $46,000 Dividends declared for 2028 unk...

A: Dividend Declare:Dividend declare is the event where the declaration is made by the company regardin...

Q: Calculate PayrollBreakin Away Company has three employees-a consultant, a computer programmer, and a...

A: Gross Pay: The total amount such as salary, wages, commissions, overtime, and bonus paid by an emplo...

Q: Operating Leverage Snellville Co. reports the following data: Sales $483,900 Variable costs 329,100 ...

A: Degree of Operating Leverage:  Degree of operating leverage is an efficiency ratio which evaluates t...

Q: Adjusted Trial Balance     December 31, 2014               Debit Credit Cash         6,590   ...

A: Income statement: The financial statement which reports revenues and expenses from business operatio...

Q: Identify Cost Graphs The following cost graphs illustrate various types of cost behavior: Cost Graph...

A:  a. Total direct material cost- It will be Cost graph four as per the question, because with each ad...

Q: Prepare a statement of cash flows for 2012 for Garcia Corporation   Presented below is a condense...

A: Hi, in this problem, current liablilities amount would be same for the year 2014 and 2013. This one ...

Q: Break-Even Sales Currently, the unit selling price of a product is $390, the unit variable cost is $...

A: Break-even sales are the dollar measure of income at which a business procures a benefit of zero. Th...

Q: Dividing LLC IncomeMartin Farley and Ashley Clark formed a limited liability company with an operati...

A: a. Determine the division of $148,000 net income for the year.

Q: 3. Homework Chapter 10

A: Stockholders’ equity is the measure of assets staying in a business after the sum total of the liabi...

Q: Kingbird Company uses a periodic inventory system. For April, when the company sold 470 units, the f...

A: Inventory Valuation:"LIFO" stands for last-in, first-out, meaning that the recently purchased invent...

Q: how do you determine when goodwill will be written off under the impairment rules

A: Goodwill:Goodwill is the good reputation developed by a company over years. This is recorded as an i...

Q: High-Low Method for a Service Company Continental Railroad decided to use the high-low method and op...

A: Click to see the answer

Q: How to prepare a classified balance sheet?               Adjusted Trial Balance     December ...

A: Classified balance sheet: The main elements of balance sheet assets, liabilities, and stockholders’ ...

Q: What statement(s) do the following go on? Please verify if they will show on more than one statement...

A: State the statements where line items go into as shown below:Net income – Net income is shown in the...

Q: Skylar is single and earns $410,000 in salary during 2018. What is the amount of 0.9 percent Medicar...

A: Employers are required to withhold additional Medicare tax, above the 1.45% Medicare tax rate, at a ...

Q: Financial statement data for years ending December 31, 2019 and 2018, for Edison Company follow: ...

A: Hence, 1.8 times is the sales to assets ratio for 2019. It is obtained by the division of sales and ...

Q: Journal Entries for Payment of Employer Payroll Taxes Jason Chen owns a business called Chen Home Bu...

A: Record journal entry for payment of employee federal income tax, social security and Medicare taxes ...

Q: Sophia & More Company sells clothing, shoes and accessories at a city location near you. Informa...

A: Income Statement as per Variable Costing

Q: Cornerstone Exercise 9-46 (Appendix 9A) Bond Issue Price On December 31, 2014, Callahan Auto issued ...

A: Click to see the answer

Q: Inventory prior year 12/31 1940 units at 5 current year purchases 3/21 5140 units at 7 8/1 2840 unit...

A: First-in-First-Out (FIFO): In First-in-First-Out method, the costs of the initially purchased items ...

Q: Marigold Company has used the dollar-value LIFO method for inventory cost determination for many yea...

A: Determine the amount of change in base price.

Q: The following information relates to Pharoah Company for the year 2022. Retained earnings, Janu...

A: Calculate the amount of net income.

Q: conduct horizontal and vertical analyses for the balance sheet and income statement accounts and rep...

A: 1) Prepare the horizontal analysis to analyze the changes in Starbucks’ fixed assets, intangible ass...

Q: Only need to do part B of the question

A: Required journal entries:

Q: Bonds Payable has a balance of $1,000,000, and Discount on Bonds Payable has a balance of $15,500. I...

A: Bonds payable are kind of long term debt generally issued by governments and corporations. The issue...

Q: My text book is  Hospitality Industry Financial Accounting (4th edition). I am in chapter 12 -- CURR...

A: Payroll: Payroll refers to the total amount that is required to be paid by the company to its employ...

Q: Your company manufactures bikes that sell for $10,000. Unit variable costs are $6,000 and totalmonth...

A: Target profit: It refers to the desired amount of profit that a company expects to achieve by the en...

Q: At the end of the year, a company reports a balance in its Allowance for Uncollectible Accounts of $...

A: Allowance for Doubtful Accounts: This is a contra asset account to the Accounts Receivables account ...

Q: Kimberly Payne and Arionna Maples decide to form a partnership by combining the assets of their sepa...

A: PartnershipIt is that form of organization which is owned and managed by two or more persons who inv...

Q: Support Department Cost Allocation—Direct Method Christmas Timber, Inc., produces Christmas trees. T...

A: Cost allocation:Cost allocation refers to the process of allocating the cost associated with the pro...

Q: How do you find the amount of payment to be credited and the balance outstanding when you know the a...

A: Calculate the amount to be credited. The buyer gets a discount of 4%, if the bill is paid within 10 ...

Q: Irons Delivery Inc. purchased a new delivery truck for $45,000 on January 1, 2013. The truck is expe...

A: Determine depreciation expense for each mile driven.

Q: James did not have minimum essential coverage for any part of 2017. If James is single and has 2017 ...

A: Formula to calculate individual responsibility payment for the year 2018, is the greater amount ofFl...

Q: Concord Corporation has a weighted-average unit contribution margin of $30 for its two products, Sta...

A: The break-even point sales in units has been calculated by dividing fixed cost with weighted average...

Q: Contribution Margin Sally Company sells 24,000 units at $28 per unit. Variable costs are $19.60 per ...

A: a. Compute contribution margin ratio.

Q: PART 1 G-Force Woodcraft manufactures customized household furnishings. The company uses a perpetual...

A: Hey, since there are multiple questions posted, we will answer first three subparts. If you want any...

Q: Exercise 8-07 On December 31, 2021, when its Allowance for Doubtful Accounts had a debit balance of...

A: Click to see the answer

Q: Current Attempt in Progress Swifty Corporation sells its product for $50 per unit. During 2019, it p...

A: Definition of Variable Costing:Variable Costing is used in cost and managerial accounting. Under var...

Q: Describe two ways in which the concept of materiality may save accountants' time and effort in makin...

A: Materiality concept: The accounting concept which focusses that all the financial items and figures ...

Q: Current Attempt in Progress Sunland Company sells its product for $90 per unit. During 2019, it prod...

A: In the above equation, ending inventory under variable costing is calculated by taking the differenc...

Q: Accounting Question

A: Calculate contribution margin ratio.

Q: Financial statement data for years ending December 31, 2019 and 2018, for Edison Company follow: ...

A: Asset turnover ratio is used to determine the efficiency of the company towards the use of asset tow...

Q: How do you find the cash discount and the net amount paid when you know the gross amount of invoice ...

A: Cash discount is a rebate permitted by certain vendors of merchandise or by certain service provider...