MANAG.ACCOUNTING-CONNECT ACCESS >CUSTOM<
17th Edition
ISBN: 9781266862434
Author: Garrison
Publisher: MCG CUSTOM
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Question
Chapter 9, Problem 16E
To determine
Concept Introduction:
Flexible budget performance report: This is a report that compares actual outcomes for a period to budgeted results produced by a flexible budget. This report differs from a traditional budget. This method yields budgeted expenses that are significantly more relevant to an organization's actual performance.
To prepare: A flexible budget performance report.
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Students have asked these similar questions
Scenario
The Francis Corporation operates two service and two producing departments in its production of go carts. The budgeted overhead
costs directly associated with the departments and other pertinent data for an upcoming month are as follows:
Overhead Costs
Machine Hours
Number of Employees
19.67 (rounded)
16.67 (rounded)
3.00
14.74 (rounded)
Service & Production Departments Data
Service Departments
Maintenance
$144,000
20
O 15.87
Personnel
$80,000
16
Personnel costs are allocated based on the number of employees, and maintenance costs are allocated based on machine hours.
Assume the Assembly department uses direct labor hours to allocate its cost is overhead costs. For the upcoming month, the
estimated direct labor hours is estimated is 19,200 hours.
Question
What will be the predetermined overhead rate for the Assembly department for the upcoming month?
Production Departments
Tooling
$280,000
30,000
60
Assembly
$320,000
20,000
100
Cost Estimation & CVP
It is budget season and Margo, Inc is planning for next year and requires a
breakdown of the factory overhead cost into the fixed and variable
elements. The following data on the OH cost and machine hours are
available for the past six months:
OH Cost Machine Hours
$ 23,910
$ 23,397
$24,153
$23,964
$ 23,732
$ 23,559
$ 142,715
Month
January
February
March
April
May
June
Total
1,800
1,230
2,070
1,860
1,602
1,410
9,972
Required:
1. Assume that Mago uses the high-low method of analysis, determine the
variable OH cost per machine hour and monthly fixed cost
Additional Sales & Cost information for Margo's
Sales Price
Machine Hours Per unit
Direct Labor Hours Per Unit
Direct labor cost per unit
Direct Material cost per unit
2$
75.30
2
2.5
2$
$
40.00
18.50
2. How many units do they need to sell to breakeven in one month
3. How many units do they need to sell to earn a pre-tax profit of $52,410 in one month
4. Create a contribution margin income statement for the pre-tax…
Flexible Budget Performance Report
AirQual Test Corporation provides on-site air quality testing services. The company has provided the following cost formulas and actual results for the month of February:
The company uses the number of jobs as its measure of activity. For example, mobile lab operating expenses should be $2,900 plus $35 per job, and the actual mobile lab operating expenses for February were $4,530. The company expected to work 50 jobs in February, but actually worked 52 jobs.
Required:
Using Exhibit 9–8 as your guide, prepare a flexible budget performance report showing AirQual Test corporation’s revenue and spending variances and activity variances for February.
Exhibit 9–8 Performance Report Combining Activity Variances with Revenue and Spending Variances
Chapter 9 Solutions
MANAG.ACCOUNTING-CONNECT ACCESS >CUSTOM<
Ch. 9 - Prob. 1QCh. 9 - What is a flexible budget and how does it differ...Ch. 9 - Prob. 3QCh. 9 - Why is it difficult to interpret a difference...Ch. 9 - What is an activity variance and what does it...Ch. 9 - Prob. 6QCh. 9 - Prob. 7QCh. 9 - Prob. 8QCh. 9 - Prob. 9QCh. 9 - Prob. 10Q
Ch. 9 - The Excel worksheet form that appears below is to...Ch. 9 - The Excel worksheet form that appears below is to...Ch. 9 - Adger Corporation is a service company that...Ch. 9 - Prob. 2F15Ch. 9 - Prob. 3F15Ch. 9 - Adger Corporation is a service company that...Ch. 9 - Adger Corporation is a service company that...Ch. 9 - Adger Corporation is a service company that...Ch. 9 -
L09-1, LO9-2, LO9-3
Adger Corporation is a...Ch. 9 - Prob. 8F15Ch. 9 - Adger Corporation is a service company that...Ch. 9 - Prob. 10F15Ch. 9 - Prob. 11F15Ch. 9 - Prob. 12F15Ch. 9 - Prob. 13F15Ch. 9 - Prob. 14F15Ch. 9 - Prob. 15F15Ch. 9 - Prob. 1ECh. 9 - Prob. 2ECh. 9 -
EXERCISE 9-3 Revenue and Spending Variances...Ch. 9 - Prob. 4ECh. 9 - Prob. 5ECh. 9 - Prob. 6ECh. 9 - Prob. 7ECh. 9 - Prob. 8ECh. 9 - Prob. 9ECh. 9 - Prob. 10ECh. 9 - Prob. 11ECh. 9 - Prob. 12ECh. 9 - Prob. 13ECh. 9 - Prob. 14ECh. 9 - Prob. 15ECh. 9 - Prob. 16ECh. 9 - Prob. 17PCh. 9 - Prob. 18PCh. 9 - Prob. 19PCh. 9 - Prob. 20PCh. 9 - Prob. 21PCh. 9 - Prob. 22PCh. 9 - Prob. 23PCh. 9 - Prob. 24CCh. 9 - Prob. 25CCh. 9 - Prob. 26C
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