B&L; Landscapes, Inc. Mini Practice Part 5 BilGraham ond Larry Mier incorporated

Question

B&L; Landscapes, Inc. Mini Practice Part 5 BilGraham ond Larry Mier incorporated B&L; Lard cog es, Inc. on Jhy 1,2016. The busness consists of lawn care and sprinider system installations. In addition, they aso sell two types of fertiizer During 2017. B&L; Londscopes, Inc. ocored a 30% interest in este pe. The president of Crestine wants to develop a management report to evaluate Manufacturing Overhead costs Bil and Larry want to heip and have volunteered your services to provide some managerio reporting for Crestine Crestine Pipe distributes high-quality PVC pipe and has the following information for the month of March, 2018 Crestline Pipe Manufocturing Overhead Budget (Slatic) For the Month o March. 2018 in LF 117.500 Budgeted costs Indirect materials ($0 30DLH) 7050 Indirect labor $O.SO/DLH) 11750 Maintenance 1$0.25/DLH 5.875 42.000 16.800 2.500 1,200 1.300 99050 Property taxes Tolal budgeted costs Crestine Pipe Manufocturing Overhead Costs (Actua For the Month of March, 2018 Actual production in LF Actual costs 7.100 11825 10.700 5.900 42.000 16.800 2.500 1.200 Indrect materials Indrect labor Utates Property faxes Total budgeted costs 199 325 Crestline Pipe had the following static budget and overhead costs for March Manufacturing overhead is budgeted based on direct labor hours (DLH). Direct labor is budgeted at 12 minutes per inear foot (LF). 1. Prepare a flexible manulacturing overhead budget based on the following amounts a) 115.500 LF b) 116,500 LF c) 117.500LF d) 118.500 LF e) 119,500 LF 2. Prepare a flexible budget report showing the differences (favorable and unfavarable) in manufacturing overhead costs for the month of March. Include your andlysis of what variances should be investigated further 3. Prepare a responsiblity report for the manufacturing overhead for March assuming only variable costs are controlable. Provide a brief evaluation of how this information could be used to measure the manufacturing managers performance.

Explanation / Answer

1. Manufacturing overhead flexible budget

6930

(23100*0.30)

6990

(23300*0.30)

7050

(23500*0.30)

7110

(23700*0.30)

7170

(23900*0.30)

11550

(23100*0.50)

11650

(23300*0.50)

11750

(23500*0.50)

11850

(23700*0.50)

11950

(23900*0.50)

10395

(23100*0.45)

10485

(23300*0.45)

10575

(23500*0.45)

10665

(23700*0.45)

10755

(23900*0.45)

5775

(23100*0.25)

5825

(23300*0.25)

5875

(23500*0.25)

5925

(23700*0.25)

5975

(23900*0.25)

Calculation of Direct labpour hours

115500 = 115500*12/60 = 23100

116500 = 116500*12/60 = 23300

117500 = 117500*12/60 = 23500

118500 = 118500*12/60 = 23700

119500 = 119500*12/60 = 23900

Manufacturing Overhead Flexible Budget Report

Thank you

Production in LLF 115500 116500 117500 118500 119500 Variable costs Indirect material (0.30/DLH)

6930

(23100*0.30)

6990

(23300*0.30)

7050

(23500*0.30)

7110

(23700*0.30)

7170

(23900*0.30)

Indirect labour (0.50/DLH)

11550

(23100*0.50)

11650

(23300*0.50)

11750

(23500*0.50)

11850

(23700*0.50)

11950

(23900*0.50)

Utilities(0.45/DLH)

10395

(23100*0.45)

10485

(23300*0.45)

10575

(23500*0.45)

10665

(23700*0.45)

10755

(23900*0.45)

Maintenance(0.25/DLH)

5775

(23100*0.25)

5825

(23300*0.25)

5875

(23500*0.25)

5925

(23700*0.25)

5975

(23900*0.25)

Total Variable costs 34650 34950 35250 35550 35850 Fixed Costs Salaries 42000 42000 42000 42000 42000 Depreciation 16800 16800 16800 16800 16800 Property taxes 2500 2500 2500 2500 2500 Insurance 1200 1200 1200 1200 1200 Janitorial 1300 1300 1300 1300 1300 Total Fixed costs 63800 63800 63800 63800 63800 Total Budgeted costs 98450 98750 99050 99350 99650

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