Mussatto Company expects to produce 43,440 units of product IOA during the curre

Question

Mussatto Company expects to produce 43,440 units of product IOA during the current year. Budgeted variable manufacturing costs per unit are direct materials $5, direct labor $13, and overhead $17. Annual budgeted fixed manufacturing overhead costs are $91,452 for depreciation and $42,264 for supervision. In the current month, Mussatto produced 5,540 units and incurred the following costs: direct materials $25,072, direct labor $70,101, variable overhead $102,756, depreciation $7,621, and supervision $3,788. Prepare a flexible budget report.

Explanation / Answer

item budget actual difference units 5540 5540 variable cost direct material 27700 25072 2628 F direct labor 72020 70101 1919 F variable overhead 94180 102756 -8576 U total 193900 197929 -4029 U fixed cost depreciation 7621 7621 0 supervision 3522 3788 -266 U total 11143 11409 -266 U net total 205043 209338 -4295 U

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