I need the formula for finding the activity cost of the flexible budget from the

Question

I need the formula for finding the activity cost of the flexible budget from the example below. I know to divide 43160/33200 which gives me 1.30. Then I multiply that to the actual result of 36900...what do I do next?

Freemont Corporation-Machining Department
Cost Control Report
For the Month Ended June 30

/////////////////////Planning//////Actual
/////////////////////Budget //////Results/////////Variances
Machine-hours//// ///33,200/////////36,900///////////////////
Direct labor wages////$43,160///////$87,000 $///////43,840 U
Supplies ////////////19,920 ////////25,100///////// 5,180 U
Maintenance//////// 117,200///////137,500///////// 20,300 U
Utilities ////////////14,020 ////////17,600 //////////3,580 U
Supervision /////////38,000 /////////38,0000//////////0
Depreciation ////////80,000 /////////80,0000 /////////0
Total //////////////$312,300/////// $385,200 ////////$72,900 U

Direct labor wages and supplies are variable costs; supervision and depreciation are fixed costs; and maintenance and utilities are mixed costs. The fixed component of the budgeted maintenance cost is $84,000; the fixed component of the budgeted utilities cost is $10,700.

Need to find the flexible activity and variance. Also revenue and spending amt and variance. Formula and examples will be fine. Please advise how to calculate the utilities mix cost…

Explanation / Answer

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Freemont Corporation-Machining Department Cost Control Report For the Month Ended June 30 Planning Actual Revenue and Budget Results Spending variances Machine-hours 33,200 36,900 Variable costs: Direct labor wages 43,160 87,000 43,840U Supplies 19,920 25,100 5,180U Maintenance(117,200-84,000) 33,200 53,500 20,300U (137,500-84,000) Utilities(14,020-10,700) 3,320 6,900 3,580U (17,600-10,700) Total variable costs 99,600 172,500 72,900U Fixed costs: Supervision 38,000 38,000 0 Depreciation 80,000 80,000 0 Maintenance (Fixed) 84,000 84,000 0 Utilities(Fixed) 10,700 10,700 0 Total fixed costs 212,700 212,700 0 Total costs 312,300 385,200 72,900U Cost per machine hour= 312,300/33,200 = 9 385,200/36,900=

10

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