Preparing a Flexible Budget for Performance Reporting Suppose you receive the following performance report from the accounting department for your first month as plant manager for a new company. Your supervisor, the vic performance in the area of cost control. Units Actual 10,000 Budgeted Variance 12,000 2,000 U Costs: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Total costs $717,600 $864,000 $146,400 F $829,200 $1,036,800 $207,600 F $432,000 $518,400 $86,400 F $900,000 $864,000 $36,000 U $2,878,800 $3,283,200 $404,400 F REQUIRED Prepare a variance analysis Note: Do not use negative signs with your answers. Units (in cases) Costs: Static Budget Activity Variance 12,000 Flexible Budget Flexible Budget Variance 10,000 Actual 2,000 x Static (Total) Variance Direct materials $ 864,000 Direct labor $ 1,036,800 $ $ 146,400 x F 207,600 x F 864,000 x $ 146,400 x F ÷ 1,036,800 * $ 207,600 x F ÷ Variable overhead $ 518,400 $ 86,400 F ÷ 518,400 x $ 86,400 x $ Fixed overhead $ 864,000 $ 36,000 x $ 864,000 $ 36,000 U ÷ Total costs $ 3283200 $ 476400 F 3283200 $ 404400 F 717,600 $ 829,200 $ 432,000 900,000 2878800 $ 146,400 F 207,600 F ÷ ÷ 86,400 F $ 36,000 U 404400 F ÷
Preparing a Flexible Budget for Performance Reporting Suppose you receive the following performance report from the accounting department for your first month as plant manager for a new company. Your supervisor, the vic performance in the area of cost control. Units Actual 10,000 Budgeted Variance 12,000 2,000 U Costs: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Total costs $717,600 $864,000 $146,400 F $829,200 $1,036,800 $207,600 F $432,000 $518,400 $86,400 F $900,000 $864,000 $36,000 U $2,878,800 $3,283,200 $404,400 F REQUIRED Prepare a variance analysis Note: Do not use negative signs with your answers. Units (in cases) Costs: Static Budget Activity Variance 12,000 Flexible Budget Flexible Budget Variance 10,000 Actual 2,000 x Static (Total) Variance Direct materials $ 864,000 Direct labor $ 1,036,800 $ $ 146,400 x F 207,600 x F 864,000 x $ 146,400 x F ÷ 1,036,800 * $ 207,600 x F ÷ Variable overhead $ 518,400 $ 86,400 F ÷ 518,400 x $ 86,400 x $ Fixed overhead $ 864,000 $ 36,000 x $ 864,000 $ 36,000 U ÷ Total costs $ 3283200 $ 476400 F 3283200 $ 404400 F 717,600 $ 829,200 $ 432,000 900,000 2878800 $ 146,400 F 207,600 F ÷ ÷ 86,400 F $ 36,000 U 404400 F ÷
Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter7: The Master Budget And Flexible Budgeting
Section: Chapter Questions
Problem 7P: Preparing a performance report Use the flexible budget prepared in P7-6 for the 31,000-unit level...
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Preparing a Flexible Budget for Performance Reporting
Suppose you receive the following performance report from the accounting department for your first month as plant manager for a new company. Your supervisor, the vice president of manufacturing, has concerns that the report does not provide an accurate picture of your performance in the area of cost control.
Transcribed Image Text:Preparing a Flexible Budget for Performance Reporting
Suppose you receive the following performance report from the accounting department for your first month as plant manager for a new company. Your supervisor, the vic
performance in the area of cost control.
Units
Actual
10,000
Budgeted Variance
12,000
2,000 U
Costs:
Direct materials
Direct labor
Variable manufacturing overhead
Fixed manufacturing overhead
Total costs
$717,600 $864,000 $146,400 F
$829,200 $1,036,800 $207,600 F
$432,000 $518,400 $86,400 F
$900,000 $864,000 $36,000 U
$2,878,800 $3,283,200 $404,400 F
REQUIRED
Prepare a variance analysis
Note: Do not use negative signs with your answers.
Units (in cases)
Costs:
Static Budget Activity Variance
12,000
Flexible Budget Flexible Budget Variance
10,000
Actual
2,000 x
Static (Total) Variance
Direct materials $ 864,000
Direct labor
$ 1,036,800 $
$
146,400 x F
207,600 x F
864,000 x $
146,400 x F
÷
1,036,800 * $
207,600 x F
÷
Variable overhead $ 518,400 $
86,400
F
÷
518,400 x $
86,400 x
$
Fixed overhead
$
864,000 $
36,000 x
$
864,000 $
36,000
U
÷
Total costs
$
3283200 $
476400 F
3283200 $
404400 F
717,600 $
829,200 $
432,000
900,000
2878800 $
146,400 F
207,600 F
÷
÷
86,400 F
$
36,000
U
404400 F
÷
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