Ray Company provided the following excerpts from its Production Department\'s fl

Question

Ray Company provided the following excerpts from its Production Department's flexible budget performance report (Round "rate hour" answers to 2 decimal places. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, end "None" for no effect (i.e., zero variance). Input all amounts as positive values.) Ray Company Production Department Flexible Budget Performance Report For the Month Ended August 31 Flexible Activity Variances Budg Actual Planning Spending Variances Labor-hours (q) 9,490 9,010 S 140,625 Direct labor Indirect labor Utilities Supplies Equipment depreciation Factory administration Total expense q) S 137,605 s 16,920 q) q) q) 4.95 S 3,670 F S384 U S 1 $ 13,808 4,310 S 6,600 78 650a) 18,720 S 1,460U S 4,454 S 144 0 None 01 None 78,650 +1.00 q) $ 280,191

Explanation / Answer

Solution:

Computation of Activty and Spending variance For the month ended June 30 Particulars Actual results Spending Variances Flexible Budget Activity Variances Planning Budget Labor hours (q) 9490 9490 9010 Direct labor ( $14.50 q) $140,625.00 $3,020.00 U $137,605.00 $6,960.00 U $130,645.00 Indirect labor ( $7,430.00 + $1.00 q) $13,250.00 $3,670.00 F $16,920.00 $480.00 U $16,440.00 Utilities ( $6,600.00 + $0.80 q) $15,652.00 $1,460.00 U $14,192.00 $384.00 U $13,808.00 Supplies ( $1,607.00 + $0.30 q) $4,954.00 $500.00 U $4,454.00 $144.00 U $4,310.00 Equipment Depreciation ( $78,650.00 ) $78,650.00 $0.00 None $78,650.00 $0.00 None $78,650.00 Factory Administration ( $18,720.00 + $1.00 q) $27,060.00 $1,150.00 F $28,210.00 $480.00 U $27,730.00 Total Expense $280,191.00 $160.00 U $280,031.00 $8,448.00 U $271,583.00

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