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Variable Costs Fixed Costs Warning Don\'t show me this message again for the ass

ID: 2425371 • Letter: V

Question

Variable Costs

Fixed Costs

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(a)

LOWELL COMPANY
Manufacturing Overhead Flexible Budget Report
For the Quarter Ended March 31, 2014

Difference


Budget


Actual

Favorable (F)
Unfavorable (U)

Neither Favorable
nor Unfavorable (N)

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(b)

LOWELL COMPANY
Manufacturing Overhead Responsibility Report
For the Quarter Ended March 31, 2014

Difference


Controllable Costs


Budget


Actual

Favorable (F)
Unfavorable (U)

Neither Favorable
nor Unfavorable (N)

Lowell Company’s manufacturing overhead budget for the first quarter of 2014 contained the following data.

Variable Costs

Fixed Costs

Indirect materials $11,796 Supervisory salaries $35,239 Indirect labor 10,365 Depreciation 6,788 Utilities 7,320 Property taxes and insurance 7,525 Maintenance 5,522 Maintenance 5,091
Actual variable costs were indirect materials $14,742, indirect labor $9,246, utilities $9,505, and maintenance $4,898. Actual fixed costs equaled budgeted costs except for property taxes and insurance, which were $9,008. The actual activity level equaled the budgeted level.

All costs are considered controllable by the production department manager except for depreciation, and property taxes and insurance.

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Explanation / Answer

Lowell Company

Manufacturing overhead performance report for the quater ended March 31 2014

Since depreciation and property taxes and insurance are not controllable by the production department manager, these costs have not been included in the performance report generated by the production department manager.

Budget Actual Variance Indirect materials 11,796 14,742 2,946 U Indirect labor 10,365 9,246 1,119 F Utilities 7,320 9,505 2,185 U Maintenance ( Variable) 5,522 4,898 624 F Supervisory salaries 35,239 35,239 N Maintenance (Fixed) 5,091 5,091 N Total manufacturing overhead cost 75,333 78,721 3,388U